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Organization Change of Aeon Co. Malaysia Bhd Essay

AEON Co. (M) Bhd. is principally engaged in the operations of a chain of superstores selling a broad range of goods ranging from clothing, food, household goods, other merchandise and shopping centre operation. AEON Co. (M) Bhd. was started from Jaya Jusco Store Sdn. Bhd. In 15 September 1984, the first JUSCO store was established in Malaysia. In 1983, our Malaysian Prime Minister Dato’ Seri Dr. Mahathir (Now known as Tun Dr. Mahathir) visited Tokyo and then met the JUSCO Co. Ltd. President, Mr. Takuya Okada to discuss the proposition of bringing JUSCO to our country. This is because he believes that it was a need for our country economic growth on that time. AEON Co. (M) Bhd. aim to be a global company, meaning that management must both meet global quality standards and at the same time remain rooted in local communities. On the basis of this code, Aeon is striving to achieve long-term prosperity and growth by building excellent relationships with its customers, shareholders, business partners, local communities, and employees, while continuing to offer products and services that satisfy customers.

For example, AEON Co. (M) Bhd. provided cardholders with numerous incentives, ranging from discounts to an enhanced point system such as AEON Gold Card, the first gold card in Japan without an annual fee, and their electric toll collection (ETC) cards which offers cardholders bonus points when customers shop, have gone to great lengths to raise the number of affiliated merchants. JUSCO’s vision is to establish AEON as a leading retailer brand in consumer finance and service industry by providing excellent customer service. Its mission is to provide a wide range of consumer financial services that best meet their customer needs and they are committed to serve their customers to improve their lifestyle through AEON products and services. AEON insist to a strict code of corporate ethics and at the same time, engage in activities which contribute to society. Lastly, AEON Co. (M) Bhd. is listed in Bursa Malaysia as a trust company under the Trust Companies Act 1949 and Registration of Businesses Act 1956. AEON was awarded the Green Leadership Award and Prime Minister CSR Award for Community and Social Welfare. CONTENT

To analyze the company’s practices/operations in AEON Co.(M) Bhd. Change is an organizational reality. Most managers will have to change some things in their workplace. It can classify these changes as organizational change which is alteration of an organization’s people, structure, and technology. Firstly, changing structure includes any alteration in authority relationships, coordination mechanisms, degree of centralization, job design, or similar organization structure variables. AEON Co. (M) Bhd. control the work process engineering, restructuring, and empowering result in decentralization, wider spans of control, reduced work specialization, and work teams. These structural components give employees the authority and means to implement process improvements. For instance, the creation of work teams that cut across departmental lines allows those people who understand a problem best to solve that problem. It can help cross-functional work teams encourage cooperative problem solving rather than “us versus them” situations.

Besides that, changing technology encompasses modifications in the way works is done or the methods and equipment used. Most of the managers in AEON Co. (M) Bhd. deal with changing technology are continuous improvement initiatives on their products and services, which are directed at developing flexible processes to support better quality operations and also their employees committed to continuous improvements are constantly looking for things to fix. Thus, work processes adaptable to continual change and fine tuning, it requires an extensive commitment to educating and training workers. AEON Co. (M) Bhd. provided training to employees which are need in new technology and new methods. Lastly, changes in people refer to changes in employee attitudes, expectations, perceptions, or behaviors. The human dimension of change requires a workforce that is committed to quality and continuous improvement. Again, AEON Co. (M) Bhd. provided proper employee education and training is needed, which are need in problem solving, decision making, negotiation, statistical analysis, and team-building, and they can able to analyze and act on data. As is a performance evaluation and reward system that supports and encourages those improvements.

Conclude, employees training to maintain its market leading position in their business. The main practices for AEON Co. (M) Bhd. is align the goals of a change effort with organizational strategy. This is because of organization‘s strategic plan identify the products and services and the core business, and it can help organization supporting processes that help deliver these products and services. Furthermore, it also identifies the organization’s special competencies and help organizational enhance the core and key supporting organizational processes. For example, the goals of AEON Co. (M) Bhd. changed effort do not support the organizational strategy then the change effort will not yield significant value to the organization. Therefore, by aligning the goals of a change effort with their business strategy, the change effort will have a greater chance of succeeding because the change effort will receive greater executive commitment than if the goals were not aligned. To accomplish this, Aeon clearly define its structures, management systems, and guiding principles, policies, and procedures.

Instant, executives take the time to communicate the vision to all of the organization’s employees in small groups of people. Besides that, AEON Co. (M) Bhd. created and maintained a superior change team. This is because a charter that identifies a task that is narrower in scope than the organization’s strategy statement and states the expectations of management in terms of goals and metrics. These goals and their descriptions did not change during the change effort, because should only be a few of them. However, the change team has control the goals, which able to measurable, and also define its purpose, the methods, procedures it will use, and the acceptable team behavior, because it will help to resolve conflict and define team roles. For example, AEON Co. (M) Bhd. creating a superior change team with several of good planning, it also requires good people to enact the change, change team members are experts and have positions of authority, possess good management and communication skills, and the ability to focus on the change vision and objectives. In closing, a superior change team will effectively create a plan for change, identify the processes to change, and acquire support for the change effort of organization at all the levels. Thus, the quality of such verification is highly suspect. On the others hand, AEON Co. (M) Bhd. plans for continuous improvement.

This is because of continuous process improvement will cause an organization to produce better products or goods more reliably and efficiently to enhance customer satisfaction and value. For example, to achieve continuous improvement of organization, AEON Co. (M) Bhd. uses good performance measures and management monitor their employees as necessary. In addition, managers should verify that the selected metrics are accurate measures of business goals in managing organizational changed. To identify and explain the relevant principles and concepts of management in AEON Co. (M) Bhd. those are being applied in the company. The principles and concepts of AEON Co. (M) Bhd. is Customer Centre Approach. AEON’s mission is always to be contributed to the customers. The goal of AEON Co. (M) Bhd. is to operate as an “international-scale retailing group” which focused on the quality management to enhance their capabilities. The increasing in the Malaysia population shows that there is a probability that the target customers for the retailing industry have grown. A wide range of customers involves in the market mostly tend to purchase household products which is suits for family members, children and adult.

This is an opportunity for AEON to achieve the mission of company for contribute to their customers. With the changes in the customers’ lifestyle, that is means that the trends would also changes. AEON Co. (M) Bhd. will provided with higher quality products, so that the customers will aware that the AEON’s goal of quality management is exactly aligned with their demand and needs. In addition, this will also give impact on the company’s goal to satisfy their customers. To designed an image to satisfy the ever changing needs and desires of consumers, AEON’s constant interior refurbishment of stores. The management’s acute understanding of target market needs and the provision of an optimal product-mix enhanced the company’s performance. In Malaysia for 28 years, Aeon has been successfully to positioned itself as a benchmark in excellent customer service, such as high worker’s discipline and maintain high standard level of their food as well environment. AEON Co. (M) Bhd. provided variety of products for their customers.

On the others hand, the principles and concepts of management of AEON Co. (M) Bhd. is division of work. This principle tells us that as far as possible the whole work should be divided into different parts and each individual should be assigned only one part of the work according to his ability and taste rather than giving the whole work to one person. AEON Co. (M) Bhd. applied this principle to manage organizational change from Jusco Shopping Centre to AEON Co. (M) Bhd. where all department need to change since Aeon Credit Service combined together with Jusco Shopping Centre on 12 January 2012. When a particular worker in AEON Co. (M) Bhd. performs the same job repeatedly such as in marketing department, financial department, leadership department and so on will make the job an expert in doing that particular part of the whole job for them. Consequently, the benefits of specialization will become available in AEON Co. (M) Bhd. For example, AEON Co. (M) Bhd. gets an order for promotion. They have five to six departments who will do their own job for the promotion.

Everyone will do the job in short time and come out with the successful promotion. The principle of division of department applies not only to the workers but also equally to the managers and leader. For example, if a manager is tuned to work on the same kind of activities for a long period of time, he will certainly be an expert in his particular job. Consequently, more and beneficial decisions can be taken in a comparatively less time by him. Business processes must support business needs is the one of the principle and concepts of management. Every process will be increase organizational value by supporting the business vision and supporting strategies. AEON Co. (M) Bhd. created a vision for each process to be changes and also develop a new vision for each process it expects to change. The process of vision described the new capabilities of the process and the expected performance improvements. Furthermore, it identify how the AEON Co. (M) Bhd. will support the strategy, respond to customer needs, and respond to competition. This will lower the utility of a change effort and would place it at risk because it probably would not gain the necessary organizational support to make it successful.

The issue of organization design would be solved because environment will be free from uncertainty and there no need to adapt. Besides that, the creation of work teams that cut across department lines allows those people who understand the problems and have the best solutions to solve the problems. Besides that, AEON Co. (M) Bhd. made a formal case. This is because individuals are inherently rational and will question to what extent change is needed, whether the company is headed in the right direction, and whether they want to commit personally to making change happen. AEON Co. (M) Bhd. looks to the leadership for answers it will due to the articulation of a formal case for change and the creation of a written vision statement are invaluable opportunities to create or compel leadership-team alignment. Firstly, AEON Co. (M) Bhd. confront reality and articulate a convincing need for change, then demonstrate faith of the company has a viable future and the leadership to get there and last provide a road map to guide behaviour and decision making.

Thus, leaders customize this message for various internal audiences, describing the pending change in terms that matter to the individuals. In a series of offsite meetings, the executive team built a brutally honest business case that downsizing was the only way to keep the business viable, and drew on the company’s proud heritage to craft a compelling vision to lead the company forward. By confronting reality and helping employees understand the necessity for change, leaders able to motivate the organization to follow the new direction in the midst of the largest downsizing in the company’s history. To identify and explain the pros and cons in the application of the relevant principles and concepts of management in order to find the problems that will be the encountered by the company. PROS

Build up the customer’s loyalty
By satisfy the customer’s need, AEON Co. (M) Bhd. able to keep their customer’s loyalty. Loyalty of customers is typically repeat customers. The customers will feel comfortable when shopping at AEON mall, which aligned with their needs and lifestyle. If a certain customer enjoys shopping at a particular business, it will return to shop again. The loyalty of customers may lead to stabilize the company’s income. Higher productivity

Division of work for AEON Co. (M) Bhd. is to achieve higher productivity in Aeon by using “practice makes perfect” slogan. AEON Co. (M) Bhd. concentrating on the repeating the same task again and again, a worker acquires dexterity, skill and speed, and more­over, division of works avoids waste time and effort caused by changes from one task to another. Specialization requires a simplification of tasks and facilitates for AEON Co. (M) Bhd. saving devices. Due to all these the quantity and quality of work increase tremendously. Lower cost

Division of work in AEON Co. (M) Bhd. increases the efficiency of workers, managers and leaders in each department. In addition, wasteful duplication of process and tools is avoided, it able gain good result and save cost. Large scale production offers several economies in the used of materials, machinery and skills. Therefore, costs of operations in AEON Co. (M) Bhd. are reduced to earn more profit. Trusted brand

AEON Co. (M) Bhd. operated in market more than 20 years. Nowdays, AEON Co. (M) Bhd. pay attention on differentiation of products and services, however when times pass by, due to many competitors, there are too many of new feature or increase of new offers in the market. It will cause Aeon pay attention on customers’ needs and wants and able to learn customers’ oriented strategy. Therefore when AEON Co. (M) Bhd. produce a product, AEON Co. (M) Bhd. makes sure the brand is clear, distinctive, easily understood and expresses a unique, compelling benefit that customers believe can see the value of. Diversification of brand

Product diversification strategies should aim at expanding markets either by brand extensions or new complementary products, but sometimes this is also achieved by creating new uses for the original products with a new twist. The strategy should avoid being too similar to current products and markets, but at the same time it should not be too different from current ones. AEON Co. (M) Bhd. practiced this so that they can offer new products to customers, it able to compete in the market. CONS

Higher cost burden
To fulfill the changing of the customer’s demand and needs, AEON Co. (M) Bhd. may face to higher cost burden. To improve the customer’s satisfaction for shopping at AEON mall, AEON have to keep on improvement on the shopping environment. This might lead to higher cost for renovation and decoration the shopping mall. In order to fulfill the changed in customer’s lifestyle, AEON Co. (M) Bhd. have to come out with higher quality product which may leads to higher cost of product. Lack of responsibility

Under division of work AEON Co. (M) Bhd. lack of responsibility in creating something new product. Such as, the final project is not the task of a single person but the creation of several workers, managers, and leaders. Therefore, no any individual can be held responsible if anything goes wrong in the project. Therefore, involvement of workers in their work is reduced. Too much interdependence

Division of work in AEON Co. (M) Bhd. leads to interdependence between individuals, firms, industries and countries. Failure of any one link due to strike, war, breakdown in transport and communication, depression and so on it may cause great harm for the company. Inferior output by one worker in AEON Co. (M) Bhd. may spoil the quality of the entire product. Specialists know only a single process of production. In case of unemployment, they find is difficult to get jobs. Poor advertising

AEON Co. (M) Bhd. does not advertising due to the cost. The advertising activity only will take place during peak seasons like school holiday and festival season. AEON Co. (M) Bhd. mainly depends on word of mouth whereby, customers pass the news to other customers about promotion or new products. AEON Co. (M) Bhd. should aware this tactic may harm business if customers are not satifity with the products and they will start to complaint and others will get negative thinking about the company. In the end, AEON Co. (M) Bhd. may loss customers and it is not easy to pull back their attention. Thus, sales and profit of company will drop. Create rigidity

AEON Co. (M) Bhd. created rigidity in their operations. It can lock an organization into specific goals to be achieved within specific timetables. This is because the goals set under the assumption. Thus, when the environment is random and unpredictable can be recipe for disaster. It may cause AEON Co. (M) Bhd. not able to compete and survive in a rapidly changing environment.

AEON Co. (M) Bhd. should perform annual process assessments and benchmarks. This is because annual process assessments help to identify areas for process improvement, whereas benchmarks help to identify where an organization stands relative to an industry. Based on each assessment and benchmark provides a snapshot of an organization’s capabilities, which should be the basis for determining whether it needs to change and the value of such change. Furthermore, auditors can easily determine whether an organization performs assessments and benchmarks by verifying the existence of reports documenting their execution. Besides that, AEON Co. (M) Bhd. should analyze an organization’s software portfolio, which is the total number of applications it owns. A portfolio analysis include counting the number of copies of each application, it can examining the status of each application in terms of defect levels, and identifying the overall importance of each application.

Due to this, the highest level of importance indicates that an application is critical to the success of the enterprise’s missions. In addition, Aeon should know the role each application plays in the future of the enterprise. By understanding the software tools that an organization uses, it can identify those areas that have the greatest need for tool support, as well as where it can derive the greatest benefit tool use or change. Instant, such understanding will also influence the training activities of an organization. On the others hand, AEON Co. (M) Bhd. should listen to the customer. An organization must capture the needs and desires of its customers since their perceptions of its strengths and weaknesses are vital to its success. Wherefore, Aeon should ask its customers what it must do today to satisfy them two, three, and five years in the future. Since customer input helps to improve the products of organization develops and the most important is processes that address their concerns, auditors should examine that documentation exists that verifies that the organization obtains and uses customer feedback on a periodic basis.

Furthermore, AEON Co. (M) Bhd. should align the infrastructure. The successful change requires that Aeon align its human resource, information, financial, organizational, and other support systems around the core business processes. Organizational structure should be an operational response to an organization’s mission and strategy. Thus, the reporting relationships among an organization’s business units should represent its actual workflows, it should help them establish and develop the necessary competencies by providing appropriate training. If an organization does not do this, old practices will render new organizational changes meaningless and a business’s operating units will not function efficiently or effectively. Thus, it is vital that auditors identify the workflow between business units whether the organization’s infrastructure matches it, and also personnel within those business units have the skills to effectively and efficiently perform their work.

Lastly, AEON Co. (M) Bhd. should foster a creative and innovative environment. Aeon must be systematically and deliberately identify on new ideas and ways of doing things better. This requires organizations to challenge the basic assumptions on which its organization has been built. Due to this, Aeon change these assumptions requires creativity, which is the generation of ideas and alternatives and innovation, which is the transformation of those ideas and alternatives into useful applications that lead to change and improvement. In particular, an organization must always challenge assumptions, create solutions, and look at problems from different perspectives. . As a result, auditors should objectively assess how experimental an organization is when conducting their business.

In conclusion, from the AEON Co. (M) Bhd. we has identified four organization change management principles, which are vitally important to organizing change. Furthermore, we also have analyze the company’s practices and operations in managing organizational change. Consequently, organizations should adopt these change management principles and practices based on their business needs. To promote success, an organization should address the three identified critical processes which are achieving executive commitment, creating a vision of the future organization, and communicating that vision to the organization.

In addition, a select group of people, having the necessary skills and personal characteristics, should lead software process improvement efforts. Organizational changes because of uncertainty, habit, concern about personal loss, and the belief that a change is not in the organization’s best interests. There are needs many techniques for managing resistance to change included education and communication, participation, facilitation and support, negotiation, manipulation and co-optation, and coercion. Last, the important part which is human resource variables. It included high commitment to training and development, high job security, and encouraging individuals to be idea champions.

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