The uk housing sector

The uk housing sectorIntroductionThe UK housing sector has been under the shadow of Credit Crunch since June 2007, which initiated from coupled States and began to cover the globe. Not sole(prenominal) the body structure industry, but any the other industries including textiles etc. were affected due to this. The housing sector was flourishing day by day as more vagabonds where introduced and the log books were filled till next couple of month, until June 2007, the credit crunch began to expand its feathers, after which the whole streamlines began to draw shore. The undesirable result for UK housing sector appe ard in the form of 20 30 % of house sets fell from its maximum direct, from 2007 onwards Mortgages atomic number 18 not approved as oft as it was done before and only 50% atomic number 18 approved and overbold home are not built as frequently as were done before 2007.Goodhart and Hofmann (2008) explain that the mortgage rates are directly dependant on the banks which has a toilsome impact on the bell of the houses. Due to Financial Recession an alarming situation arose resulting in adjustment of different policies within an institution in put to survive. The jumbo kinfolk Builder, plc is a whacking UK national house builder which has interpreted necessary steps to counteract the Credit Crunch by maintaining a balance betwixt its appeal and its expenditure. This it has done by cutting down its costs, selling the portion of land which it purchased so that it could be sold at a reason able price when required and by repositioning it egotism into social housing sector.Appleyard (2006) states that the UKs housing sector is going through a depart. The current recession has enabled the housing sector to change. This change is usually in the form of merging one watertight into another so that both benefit from all(prenominal) others experience and expertise. The company be on of giant House Builders, plc has in that locationfore decided to attain the services of Small Firm Ltd which is a small, regional housing developer in the S appearh East of England. This report depart address the key change wariness issues which would take place when there is mergence of Small Housing Builders Ltd into Large Housing Builders plc in regard to its organizational organise and culture. The second part go forth be the further analysis of this mergence in the form of preparation of a change instruction plan for the scratch cardinal years. LARGE HOUSE BUILDER plcThe UK national house builder or the Large Housing Builder (LHB) plc has major contribution in UK for the last ten (Appleyard, 2006). The company has a regional bodily structure with offices throughout different locations of the land. This regional structure is managed by a regional manager who is responsible to break up to the rudimentary management board concerning his tasks which mainly include the profit /loss, purchasing of land and all the procedures involved in achieving it and the development and marketing of the site.A recent interrogation done by The Future Shape of the Sector Commission (2006) indicates that in 2006, Large House Builders were successful to build 25,000 houses. notwithstanding due to the recession in 2007, this figure is said to decrease drastically. The research further suggests that to safeguard the market from adverse effects of credit crunch, Large firms started to merge with Small firms in shape to benefit itself along with the other firm.The Large House builder plc, existence a big organization has the capability to stabilize it in a total of vogues. The current Recession has limited the space for the large housing builders to expand further. The only way suggested is by mergence, which can be done by having cockeyed internal and external relationships within and outside the company. This will result in maximum output and the number one priority to satisfy the customer is consequently achieved (The Future Shape of the Sector Commission, 2006)ORGANIZATIONAL STRUCTUREGreenberg (1996) expresss that organization structure should be much(prenominal) that it should clearly elaborate the investment between the single and assemblage of people corresponding to the assigned duties, abilities and power with a certain organization.Although it is not possible to see the organizational structure physically but it can be presented in the form of a chart known as organization chart which elaborates the layout of the parties involved in the organization. Such organization chart can be seen for Large House Builders (Appendix B).The organization structure of Large Housing Builders is a complex one as many parties are involved in this firm. In item there are as many as 20 sub-parties growing at a time for a single project. They can be from designing team to finished project, transportation and logistics of construction materials to finance department, from IT department to Estimation works etc. From this fact it can be seen that it is quite rocky to structure the organization on one single page.In order to define the goals, the relevant part of the organization is magnified only there is a deep inter-relation between different parties of the company which hurdles the way. As stated earlier, the firm is fashioning its best for the natural selection in the current Credit Crunch. Although the pennant management is giving more importance to work hard in order to achieve prosperity which it has seen in the form of positive development yet the entire struggle is ending in vain as the current financial crisis is not permitting to prosper. The management of the firm feels like climbing a long mountain when it comes to paying the salaries to the supply in the current credit crunch. consort to Lu (2009, CL) the structure of the company is the correct usage of the potential facilities and the capacity that a company has. There can be three ways in which the project can be integrated into the firm useable StructureIn this type of structure, frequently emphasize is given to practicable part. hurtles are located in functional units such as human resources, finance and marketing where as the projects located in function which has dominant design with relevant staff being seconded from other functions for duration of the project. The disadvantage is this structure is that all groups are more focused towards functional manager. ground substance StructureThe ground substance structure is the one which has both the functional manager as well as the project manager. The members of the project do to report to both the functional as well as the project managers.There are three types of matrix structures fit to their strengthsa. Functional Matrix StructureIn this the functional managers are more dominant than the project managers. This type of matrix system is also called Weak Matrix system and is more often than not suitable for large Firms.b. B alanced Matrix StructureIn this type the project managers and the functional managers share equal power amongst them. This type of matrix structure is also called a Perfect Matrix.c. Project Matrix StructureIn this type of structure, project managers are more dominant over the functional managers. This type of matrix structure is also called Strong Matrix and is mostly suitable for small firms.Project StructureIn this type, the projects are self-contained geomorphological units with each unit having its own staff members and resources.From the above mentioned type of matrix structures, the Large House Builders is having the Functional Matrix Structure(Fig.1). The firm was having a nail down in construction as it get tod about 25,000 houses in 2006. With the initiation of Recession Period in 2007, the firm started to stabilize its self by cutting down its costs. The firms instruction execution was respectable when considering each project separately but on a broader perspective, there was little or poor coordination between different projects as the structure of the firm was seduce on some prototype or typical functions. Thus this structure permitted Large House Builders to enhance their accuracy take by keeping themselves gentle and adjustable with the members of the different projects.In the functional matrix structure, the staff members report to the functional manager as well as the project manager as stated by Lu (2009, CL). This sometimes took a shape of fry clashes between different parties and thus halting and making delay in the project.By analyzing the firm, it was seen that the structure of the company changes as the project progresses. These changes were not massive in nature in fact some minor changes were taking place. When the bidding phase starts, the firm was showing a firm functional type of structure. As the project initiated, the Functional Structure branched out into deuce parts. When talking about individual project, Project Struc ture was mostly dominant and the overall structure of the firm was found to be Matrix sort of than Functional. Finally at the completion of the project, Matrix Structure was found which influenced both the Projects as well as the firm itself. As stated earlier, that the company has regional managers which are controlled by the management board thus indicate that it is a divisionalized organization as whole of the structure of company is well organized. The characteristics of divisionalized organization are stated belowThe management board directs the divisional members who further authorize the regional members to take control of the profit/loss, land acquisition and marketing. This type of arrange corresponds to the middle line part of the organization. This can be considered as the backbone of an organization where key decisions are taken Lu (2009). The firm has limited vertical decentralization of authority as regional managers are in charge of their region and the company is genuinely a good deal dependant on them.The regional managers are in focus of their jobs perspective and have only one goal of Standardization of outputs and thus producing quality houses in favor of the customers.ORGANIZATIONAL stopping pointAccording to Schein (2004) culture is an in-depth knowledge of assumptions, faiths and values that the members of the organization take as granted. However, it is difficult to describe it and can simply be regarded as the charm or the identity operator of the organization. Organizational culture has got both the formal as well as the informal components (Lu, 2009cl). Formal elements like aims and objectives were apparent as all the necessary steps were taken to strengthen the firm not only in its own knowledge base but other forms of construction as well.Whereas the informal components such as racism, religious symbolism etc. some what were not in line with the latest policies of the company. The board management took a notice of these mora l values which were creating task and hindrance in the achievement of the firms goals.According to Handy (1993) there can be four types of cultures as stated below Power CultureIn power culture, whole of the control is concentrated to very few individuals. This usually have a family type culture and is suitable for small to medium surface firms where the reaction to the current market trend is very instant. percentage CultureIn role culture the roles are assigned on the basis of functions. These functions are allocated to different member to do the job. Such a setup is usually in large firms. Achievement CultureAchievement culture is very much based on results and outcomes. Examples can be such firms in with much research and development activities take place. Support CultureIn this type of culture, much importance is given to an individual person within the organization. Example can be such as within a design team only importance given to Architect.From the above discuss, Large House Builders plc were found to have ROLE culture because each member fully focused on the role given by the top management. The staff members with not encouraged to do such task which was not stated in their role statement.As all the managerial bodies were assigned their role statements, the junior managers tried to prove their mettle by giving more in the current credit crunch whereas the senior(a) management was try to stabilize the firm in its own way which resulted in some unsettlement between the organization.ORGANIZATIONAL STRETEGYHersey et.al (1969) defines a dodging as the panorama and arrangement of the tasks which an organization wants to achieve. There is a long debate as to whether the strategy is set first or the structure of the organization is set first. But for a successful completion of the desired aim, strategy and structure are always in line with each other Lu (2009,Cl). The high specimen of the firm was due to the fact that the management board was quite a ware of the strength and weaknesses of their company. Every step taken was towards the stabilization of the business. The management board of Large House Builders was seeing the current credit crunch but was unaware that this could give a real tough time to them. So a group meeting was called in which certain points were drawn down, the main theme was that the Banks were unable to give the money to the clients which in return resulted in a complete stop to construction of some time.According to Lu and Sexton (2006) the firm in the phase of innovation can be either explorative or exploitative which counts on the Structure capital, Human capital and relationship capital When seeing Large House Builder plc under the generic company level strategies illustrated by Miles and light speed (1978), the company was found to be ANALYZERS. The company was doing well and was very stable before the credit crunch in 2007. This can be judged by the performance of the company in 2006 as the compan y produced 25,000 houses indicating that it has very well organized structure and they are very bothered about their efficiency, performance and reputation. Thus they were having good expertise in their field of work with good amount of resources available for their expansion and establishment.Being analyzers, the company will expand their business in the uniform field i.e. construction of houses which may be on a larger or smaller scale but the basic aim will be stabilization, reputation and good performance.SMALL HOUSE BUILDERSThe Small Firm Ltd is a regional housing developer was has its operations in the South East of England. The firm is a family owned organization in which all the top management is from the same family indicating that the culture of the firm will be a family culture. The key members will have strong belief and good understanding between them. The Small Firm Ltd is completely customer oriented. High priority given to customers is very essential to pang forwar d in business. Customer satisfaction is the key to success for the firm.The Small Firm Ltd produced 1,000 social housing units in 2006 which is the clear indication of well set up link with public and private authorities. The close link between different authorities is very beneficial as such types of strategies are helpful when there is a limited space and time to stabilize. ORGANIZATIONAL STRUCTUREThe Small Firm Ltd has highly motivated and trustworthy top management whose total emphasize is on customer satisfaction. The firm has produced 1,000 housing units in 2006 for different housing associations and local authorities. This indicates that the firm has strong ties with its customers and all of them have good understanding amongst them.As previously stated, the organizational structures can be Functional, matrix or project structures Lu (2009). From them above discussion it is quite obvious that the firm has Project Matrix Structure which is also called strong matrix due to th e reason that in this matrix type, Project Manager has the authority to influence its staff and workers. The workers have to answer to the Project Manager for their work which is the case in Small Firm Ltd due to the strong tie between the Project Manager and the workers.The role of the Functional Manager in firm is independent to the Project Manager as the Functional manager focuses more on the technical side and the resources assignation. The resources and cost allocation is quite tough job when it comes to a complex project. According to Lu (2009), there may be a conflict developed between the Project Manager and the Functional Manager due to the resource allocation.The firm posses a machine organization due to the following reasons as indicated by Lu (2009) The firm is much focused on technostructureso that it competes the market and its competent. The firm shows limited horizontal decentralization as the members of the board share more ideas with the project manager and less w ith functional managers although both manager types are strategic for its success. The labor of the firm is hard working and always motivated to do the tasks which contribute to the betterment of the country and the firm. There is a strong communication and co-ordination grip between the labor and the project manager and thus show standardization of work process.ORGANIZATIONAL CULTUREDeal and Kennedy (1982) explained that to check whether an organization is successful or not, study its culture. The Small Firm Ltd has a family culture which means that level of trust and motivation is very high. From the types of cultures explained by Handy (1993), the Small Firm Ltd is having a POWER culture (fig. 4), the reason of power that the total concentration of the power and authority will be on a single person who will be the leader. Small firm ltd is having an informal type of structure which indicated the strong influence of the leader (family member) the staff members including managers. The firm can easily trade with any external discrepancies that may arise during a tenure time of any project. Thus making it self stabilize creates less problems and such firm can easily cope with financial crunch.ORGANIZATIONAL STRATEGYStructure and Strategy should always be inline with each other (Lu, 2009). Thus this type of strategy can be found in Small Firm Ltd as the firm can easily cope with financial crisis. From the types of strategies stated by Miles Snow (1978) the Small Firm Ltd was found to have DEFENDER type of strategy. The Small Firm ltd is very market based firm, close study of market and new trends in market is very beneficial for the company as it helps to change the short comings and thus increase the profit. The strong relation between the top management and the departmental management is in strong observation between the leader which is very beneficial to enhance the chances of survival in the time of difficulty.CURRENT SITUATIONThe management board of Larg e House Builder plc has decided to merge with Small Firm Ltd in order to stabilize itself in the ongoing credit crunch finale (Appendix 1). This is not the only aim in fact other things are also taken into consideration like Large House Builder plc is trying to adopt the expertise of social housing as well so that if there is a slump in the construction of large houses, the company can mingle with the social housing sector. So there is a need of change between two companies which can easily be brought into practice by implementing a change management plan.CHANGE MANAGEMENT According to Lu (2009, LP2) change is an pregnant fact of life and the key success is to manage it successfully. A successful manager is the one who doesnt allow change to happen on its own, in fact he make proper plans and strategies to implement change. Change doesnt take place at once rather it can take place many months and purge years for the different parties involved in change to settle down and know eac h other.Such a situation of change management has go up up between the Large House Builders plc and the Small Firm plc. twain the companies are opposite to each other in the since that both have different organizational structures, cultures and strategies but the common thing between them is that the both are in the construction business and especially in house building. Both companies will have the following Organizational issuesStructural issuesThe large house builders have functional matrix structure and the small firm ltd has a project matrix structure. The small firm will have to work really hard to come with the structure of the large house builders. The large house builders have a very well organized formal structure where as the small firm has an informal structure.Cultural issuesThe Large house builder has a Role culture in which every manager has a certain role assigned on which he is only answerable for his work to the top management whereas the small firm has power cul ture in which whole power is concentrated on the leader or single person. Such issues may produce a clash between two parties.Strategic issuesThe Large House Builders have adopted the analyzers strategy where they are keen to expand their company according to given marketing conditions and respond to market changes. On the other hand, Small firm adopts defenders strategy in which they do the job in their own field of expertise saving themselves fro outside threats because of having family culture.Such issues may cause a hurdle towards success between the two companies. To cope up with such difficulties a two year change management plan will be setup so that the process of integrating two companies of different culture, structure and strategy can run smoothly.TWO YEARS CHANGE MANAGEMENT PLANTo bring about change in the organization, necessary two change management plan is to be setup for the proper implication of roles and jobs of the two different teams i.e. the Large House Builder plc and the Small Firm ltd. Lewins (1947) three stage change management plan for the individuals of the organization can be setup asUnfreeze Change Re-freezeKottars (1996) eight stages change management plan will be used to implement a successful change in the organization. The eight stage plan is Establishing a sense of urgency Creating the guiding coalition ontogeny a vision and strategy Communication the change vision Empowering broad-based action Generating short-term wins Consolidation gains and producing more change Anchoring new approaches in the cultureThe two change management approaches will be integrated in such a way that a proper setup over a period of two years will be established which will enhance the companys performance.FIRST YEARThe first year of the mergence of Small Firm ltd into the Large House Builders plc will be very crucial as many objections and discrepancies are likely to be encountered. Though the anticipated outcomes of the mergence is likely to genera te a fold of benefit to both the companies yet the initial few months are regarded as very sensitive for the Small Firm Ltd. The change management plan is embarrassed down in Quarters of a year and possible planned workout is analyzed as followsFIRST QUARTER (Q1)During the first quarter of the first year the Small Firm Ltd will be in the act stage and would be considering ways to overcome the barriers which would resist their way towards the change. According to Greenberg (1996), an organization can encounter with two different types of barriers in change. Organizational Barriers to Change Individual Barriers to Change1. ORGANIZATIONAL BARRIERS TO CHANGESometimes terms and conditions are such set in an organization which barriers a change to take place (Katz and Kahn, 1978). Following are the organizational barriers to change in the view of Greenberg (1996)a) Structural inertiaThe Small Firm Ltd and the Large House Builders plc significantly differ with respect to the organizat ion structure they have worked in before. The Small firm ltd will learn to adopt the divisional structure of the large house builders by mixing their manager with the divisional managers of large house builders.b) Work group inertiaThe large house builders and the small firm have their own ways to complete the assigned task. A task is not just completed as it a part of the job in fact, it is because the person learn from his social values to complete a certain task as assigned Greenberg (1996). So to assume the pressure of completion of task at both ends is different which needs to be considered when assigning tasks.c) Threats to existing balance of powerThis issue is very important when it comes to change within two organizations as the managing power of both firms is entirely different from each other. For example the Large builders have a management board and a CEO who is in charge of making key decisions whereas in Small firm there is a single power or a leader who takes key de cisions. After mergence, a conflict would be raised up during the designation and allotment of powers within the organization. d) Previously unsuccessful change efforts.Both the firms are quite familiar with the fact that change management theories recently adopted by firms havent proved to be successful yet both are willing to stabilize themselves with firm motivation and hard work.2. INDIVIDUAL BARRIERS TO CHANGEThe Small firm being in the initial stage of mergence will be facing great difficulty to cope with the individual barriers to change. According to a research done by Nadler (1987), there are many factors that hurdle the way of people towards a change. These factors area) Economic insecurityA very important point which comes into ones mind during a change at any level of work is that whether my job is secured? Am I getting the right salary? Such issues when taken into consideration during a change in such a time of Credit crunch may alter the minds of the employees of not o nly the Large builders but in fact the small firm ltd also. The reason being that both the firms are going to re-locate and re-assign the tasks to the individuals which my interrupt the desired performance of members. b) Fear of unknownWhile following the same routine of work as followed by the staff for quite a long time, the staff felt secured that they had a good level of understanding developed between other staff members and managers. meeting with someone you havent worked with before will set up a fear of unknown and everyone will be in a state that something can go wrong any time Greenberg (1996).c) Threats to social relationshipDue to a change the members of the firm feel un-relaxed and insecure as they had good relation ships with the members they were previously working with. Due to this a lack of communication would be developed which would resist the fluency of work.d) HabitBy doing a similar kind of work for past many years develops a natural phenomenon for an individu al and the person becomes habitual to it. Any alteration in form of a change/new job, can result in mental dissatisfaction resulting is low performance.e) Failure to recognize need for changeIn situations where the individuals of the organization are unable to understand the exigency of change can result in a complete disaster. To overcome this, necessary steps such as awareness campaigns are run to establish a level of understanding among the workers so that they are well aware of the advantages of change.During the First Quarter (Q1) of the first year, the Small firm Ltd will be coping up with the initial difficulties of settlement in the organization. With the further enhancement of the Two year change management plan, there would not be any dissimilitude left within both the organizations after mergence.