Contemporary Management Issues: A Case Study of Honda's Swindon Car Plant Closure

Contemporary Management Issues

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Introduction

Changes are the inevitable force that influences the business growth of the business organisations. The business organisations are vastly influenced by the external changes in the country. The study focuses on the determination of the types of drivers of change in the business organisations. According to the case scenario, the drivers of changes that are predominant in the organisation Honda has influenced the strategic management and decision making. The study sheds light on the impact of the drivers of change in the decision making process of the organisation. The country economy has been affected by the changes in the organisation. The changes that have mostly influenced the development of the organisation have been the aspects of discussion in the study. The study will include suitable recommendation for the better management of the employees of the organisation. With the help of the recommendations of the study, the organisation will be able to forward to a positive process of decision making. The flexibility of the business organisation is also an aspect of discussion in the determination of the outcome of the study.

Company Background

The Honda Motor Company, famous as Honda is the largest motor cycle producing company of the United Kingdom. The organisation has its headquarters in Minato City, Japan. The market of the UK has been crowded with the products of Honda since 1959. The Honda products have been preferred by a large number of people in the United Kingdom and the countries overseas. The organisation has been able to gather the growth because of the quality of the products that it produces. The organisations have been able to gather revenue of nearly 15 trillion Japanese yen in the fiscal year of 2020 (Statista.com, 2020). The development of the organisation has been able because of the implementation of proper strategies in the operating markets.

Figure 1: Worldwide sales of Honda

(Source: Influenced by Statista.com, 2020)

The figure above is the statistical depiction of the worldwide sales of the organisation Honda. The organisation will be able to gather better growth with the implementation of the changes in the country.

Selection of Drivers of change based on case study

The drivers of change are the constant aspect that is implemented by the business organisations are the time of operations. As opined by Agyemang et al. (2019), the operational methods of the business organisations are greatly influenced by the drivers of changes. The case study has provided the discussion on the changes that influenced the operational changes in the organisation Honda. The organisation has lost a significant amount of employees because of the implementation of the government enforced laws in the operations. The study discusses on the main drivers of changes that has influenced the business growth of Honda. As per the case scenario, the organisation has to shut down their Swindon factory because of the political and socio-environmental decisions and trends. The organisation has not been able to implement the changes that could provide sustainability in the economy of the country. Moreover, the decision of Brexit has caused a huge loss of revenue to the company because of the hike in the important and export cost.

The country, moreover the citizens of the country have to observe the adversities that are caused by the implementation of new political decision in the operations of the business organisations. Based on the study of Pillai et al. (2020), it can be stated that the implementation of changes in the business organisations has been intrigued by the political decisions of the country. The case scenario clearly stated that the closure of the organisation has been influenced by the decision of Brexit. The organisation has been facing the adversities invoked by the increase in the import and export costs of the country. The introduction of the electric cars under the brand name will change the mode of operations of the organisation. The organisation will have to face a huge cost for the changing of the equipment which makes the internal parts of the cars. The study basically discusses the impact of the political drivers of change in the country that caused the closure of the Swindon Car Plant.

Predominant drivers of change in Honda, UK

The UK market has observed a downfall in the economy of the country because of the implementation of Brexit. As observed in a study by Theguardian.com (2019), Honda has ushered the closing of the car plant because of the implementation of the new technological aspect in the automobile market. The government of the country has supported the migration to the electric vehicles of the citizen. Though the environmental aspect has been in a hike because of the same, however the organisations like Honda are finding it difficult to implement the changes in the operations of the company. Honda has been providing motor cycles in the global market for a long time. The closure of the car plant in Swindon has been influenced b several aspects in the external business environment. As opined by Pelegov and Pontes (2018), the social aspect plays a small part in the migration of the organisation from the country. The technological and political part is the main aspects of the organisation leaving the market of The United Kingdom. The development of the drivers of changes is based in the determination of the changes in the trends and consumer needs in the country. According to the case study, it can be stated that the organisation has to close the car plant because of the increase in the imorta and export taxes of the organisation because of the Brexit.

Political changes

The changes that are caused in the organisation Honda is mostly because of the political changes in the United Kingdom. As stated by Kumar et al. (2020), the business organisations have to abide by the government enforced laws and political decisions to carry forward their operations in the country. The development of the organisational growth is dependent on the implementation of the government laws in the employee management. The management of the organisations determine the organisational strategies to maintain a comfortable atmosphere in the organisation keeping the laws in mind. For instance, Honda has to close down their car plant at Swindon. The main reason of the closure, as observed by the experts is the decision of Brexit. As mentioned by Gudgin et al. (2018), the Brexit has brought forth several economic adversities in the country. The whole business market of the country is facing uncertainty because of the Brexit. The outbreak of the COVID 19 in the country has produced a severe downfall in the economy of the country as well. The country has been produced new laws to deal with the sudden pandemic situation. The break out has caused a huge downfall in the GDP of the country, and Honda alike the other organisations has been faced the adversities of the same in the market of the country.

Technological change

It can be stated from the observation of the market. The implementation of the technological changes can be able to provide the business organisations with a significant amount of competitive advantage in the market. As opined by Park et al. (2018), the automobile industry is facing changes regarding the implementation of electric cars in the market. The introduction of electric cars has an innovative as well as an environment friendly approach in the market. The citizens of the country are intrigued with the idea of environmental sustainability with the introduction of electric cars in the market. As observed in an article by Theguardian.com (2019), the organisation Honda has not been able to continue their business in the market of UK because of the introduction of electric cars in the market. The organisations that are producing electric cars in the market have been able to gather better growth than the organisations that does not. As stated by Stolfa et al. (2020), the automobile organisation has been able to gather better growth with the implementation of the environment friendly approach in the operations. The closure of the car plant in Swindon has been a strategic decision for Honda.

The management of the organisation gathered the understanding from the evaluation of the relevant market. The organisation will not be able to gather sustainability in the growth without the implementation of the electric cars in the service provision of the same. It seems that the Swindon Car plan was unable to carry forward the changes regarding the technological aspects. As opined by Lee et al. (2018), the organisations in the market have to implement the current trends in the operations to gather competitive advantage. Honda has been able to give hardcore competition to the other organisations operating in the same market. However it can be said that the loss of prospect in the relevant market has compelled the closure of the Swindon car plant of Honda.

Pressures of changes

It can be stated that the implementation of the technological and political aspects has been able to negatively influence the operations of the organisation Honda. As observed in a study by Liu et al. (2019), the political changes of the country have evidently influencing the business growth of the country.

Pressure of political drivers of change

The power of the government has been able to change the operational methods of the business organisations. The political change has been the main and successful reason of the closure of the Swindon Car plant of the organisation Honda. On the other hand, McCombie and Spreafico (2018) stated that the implementation of Brexit will be beneficial for the business organisations that were operating in the market of the United Kingdom. The implementation of the technological aspects has been able to provide the organisations with a competitive advantage as well. It can be said that the closure of the Swindon Car plant of Honda will supposedly increase the number of jobless mass in the economy of the country. The suppliers of the organisation who were providing raw materials will lose a huge amount of business because of the closure.

Pressure of technological drivers of change

The implementation of the technological changes in the business organisation will be able to help gathering better growth in the market of operation. As stated by Kosaka et al. (2020), the business organisations can reduce the chance of being technologically obsolete in the market of the country. Based on the case study, it can be stated that the loss of flexibility in the organisation and unable to implement the technological trends in the operations or the service. The closure of the car plant in Swindon is the implication of the loss of market grip of the organisation because of the unapplied technological aspect in the service. The organisation Honda has been able to face the adversities regarding the implementation of the changes in service from the technological perspective. The observation of the case study helps gathering the understanding of the importance of implementing technological changes in the organisations.

The economy of the country will be harmed in dual ways because of the closure of the organisation. The suppliers who are contributing in the country economy will be providing smaller amount of taxes. The organisation itself was providing a significant amount of growth in the market. With the closure of the Swindon car plant the country will be gathering lesser taxes from Honda as well. The country has been already facing economic stagnancy because of the outbreak of the COVID 19 in the world. The government has implemented laws regarding the stoppage of the spread of the virus. As stated by Kooistra et al. (2020), the development of the business organisations has been in a stagnant position because of the government enforced law to work with minimum employees of the organisation.

Drivers currently impacting upon strategic decision-making and other activities

The political and the technological factors that are predominant in the economy of the United Kingdom have been able to impact the growth of the organisation Honda. As opined by Imran et al. (2018), the development of the business organisation is the aspect of evaluation of the external factors of the country. It plays a vital role in the determination of the business strategies of the organisation. The organisation determines the operational method based on the external factors of the country. It can be stated that the external business environment is able to drive the changes that the business organisations should evaluate before deciding the strategies of the operations. Honda will have to alter the organisational structure to abide by the government enforced laws in the company. While implementing the same the employee satisfaction is also an aspect of evaluation to carry forward the process of operations in the organisation.

Impact of drivers of change in the organisational decision making

It can be observed as a great strategic decision for the organisation to move out from the market of the United Kingdom. On the other hand Govindan and Bouzon (2018) stated that the organisation have been evaluated the adversities that will be caused by the decision of Brexit and the introduction of electric cars. Many organisations operating in the automobile industry of the country will be facing the same kind of issues because of the reduction of fuel based cars from the market of UK. The governments of the countries have supported the organisations to produce electric cars to reduce the use of the fuelled cars. The environmental sustainability is the key to develop the economy of the country. The development of the idea of electric cars has been the fruit of the urge to sustain the environment. The organisations which are looking forward to introduce the environmental approach will be able to gather the attention of the investors who are looking forward to invest in a philanthropic project.

Impact of drivers of change in the other activities of Honda

The people of the country have been attracted to the products of the organisation that has a sustainable environment friendly approach in it. As opined by Dhull and Narwal (2018), the business organisations have been implementing different aspects of the sustainability of the environment in the service provision and the marketing of the products. The development of the country is done on the basis of the adaptability of the organisations to the changes kin the society. The basic reason for the closure for the Swindon car plant may be the Brexit; however it is also true that the organisation has not been able to gather skilled employees that have the capability of adapting the changes in the organisation. The market of the United Kingdom could have been the best for the gathering of growth for the organisation with the introduction of the electric cars in the organisation. It can be stated that the development of the concepts of introducing electricity as fuel would increase the product costs of Honda.

With suitable sources of information, how the organisation has strategically responded to these drivers of change with consideration for the nature of the pressures for change

Discussion on the strategic response to the drivers of changes

The business organisation of the United Kingdom has been able to gather better growth with the help of the adaptation of changes in the organisational operations. As opined by Chaubey and Sahoo (2019), the implementation of changes will be able to help the organisations obtain betterment in the gathering of growth. Honda will be able to gather better growth in the market of the Unite Kingdom with implementation of different changes. The organisation may have to reduce the amount of earned revenues at first, however in future it will be able to gather betterment in the operational flow. The organisation has to be able to implement the strategies regarding technological changes in the operations. As stated by Vazquez et al. (2018), the organisations will be in need professional and skilled employees to carry forward the process of introducing electric cars under the brand name Honda. The development of the organisation will be able done on the basis of the proficient recruitment process of the HR department of Honda. The patent of the electric cars can be bought from the companies which first started to produce them. Or the organisation itself has to produce the mechanism for the development of the concept of electric cars.

Evaluation of the impact of changes in the organisation

The development of an organisation is relied on the flexibility in the adaptation of the changes in the market. The market of the countries will change according to the current trends in the social, political and cultural field of the society. The employee management of the organisations also has to be done after the evaluation of the same in an organisation. In one way or another, the organisation will be able to gather better growth in the market of the United Kingdom. However, the closure of the Swindon car plant will be a negative impact on the market of the country. The organisation will find it difficult to capture the market of the United Kingdom because of the sudden closure of the plant.

Skilled employees of the country will not be willing to work in the organisation because of the loss of accountability of the organisation in the market of the United Kingdom. The Human resource department of the organisations would have been able to employee skilled professional for the deployment of the concept of electric cars in the market. The organisation did not see fit the need for the structural change to implement the changes in the operations of the company. However, it can be stated that the organisation is able to lose the vast market of the United Kingdom for not being able to go out of the comfort zone and adapt the changes in the operational method.

Elaboration on how the nature of pressure for change impact on organisation performance

Organisational change refers to the entire structural alteration within the business functioning of the company. It is the most important aspects of every business to develop and adopt the changes to have dynamic effects within the functioning of the organisation. An industry can change in many different ways; the management can bring a change in the system. There can be new technology coming in the market or an alternation within the organisation regarding the rules and regulations of the organisation (Daddi et al., 2020). In order to survive in the market, the organisation needs to grow their business functioning so that they can structure their company in a new way. Considering the case study, it can be said that the management team of Honda Motors tried to bring continuous change in within the functioning of the organisation such as:

• Technology related changes: It refers to the up-gradation of the technology and the way it provides the things. In recent days, many technologies are being invented because of which it makes the organisation more efficient in their functioning. The management team of Honda Motors are planning to develop their system even more in the coming years (Durand et al., 2019). The company will only focus on the electrified mobility of their cars and all different sorts of hybrid and eco-friendly power-driven vehicles.

• Task-related changes: It is defined as that changes within the organisation that helps in maintaining the proper hierarchy of work and this can only be achieved by bringing a change in the internal functioning of the company. The business executive of Honda Motors makes sure that they are providing their employees with timely solutions and giving them satisfaction in their works (Popovi? et al., 2018). This helps in providing high internal work motivation and to increase the productivity of the organisation

• Structure related changes: Bringing a new hierarchy within the organisation so that they can form a new form of management. Considering the example of Honda Motors, it can be said that their management team always try to change the functional authority so that they can every time brings alternation in their span of management.

Types of organisational change

An organisation must always try to alter their functioning so that they can advance the operation of the company. It is very essential for the smooth functioning of the organisation to restructure its system quarterly. Considering the scenario of Honda Motors it can be observed that there management team have differentiated the changes accordingly by segmenting it in two parts that is in an external way and internal way.

External pressure: It refers to the outer force that creates a change within the organisation, taking the example of Honda Motors their management team always checks the political changes and the market situation and the preferences of the customers (Day et al., 2017). The management team of this organisation checks the requirements of the customers and their demands related to cars. In modern times, the most of the customers want to use eco-friendly cars and more modernised cars so all these things need to be looked into by the management team of the organisation.

Internal pressures: It refers to the internal force of the organisation that is created by the employees. The managing team of Honda Motors makes sure that they keep their working associates well satisfied with their work (Jyoti et al., 2017). They alter the internal policies and regulations so that the employees can work with a satisfied mind.

Recommendation based on the issues

The Honda Motors has seen a downfall in the demands of their cars because of many reasons and the most important reason behind the closure of Honda Motors is because of the ‘BREXIT’. The managing team of Honda Motors has announced that soon they are closing their Swindon car plant in the market of United Kingdom. Some of the recommendations that are based on the functioning of the company are as follows:

• As most of the rival companies have started implementing innovation in their range of cars, it’s time that Honda Motors should come up with new and innovative cars that can attract the large number of customers.

• In modern days, most of the companies are coming up with electric cars so it can be recommended that they should also come up with electric cars and those cars that create less pollution.

• It can also be recommended that the Honda motors must strategise their budgeting and allot their resources more properly.

Strategic implementation of changes to overcome the issues

Every organisation must try to have a backup strategy that should be implemented in their business downfall in order to overcome their issues and maintain their position in the market (Monroe et al., 2019). The business executive of Honda Motors must check the recent changes that have taken place in the market they should try to cover their areas that are limiting their effectiveness. It is the responsibility of the business administrative of Honda Motors to ensure the entire planning of the organisation so that they can design both the long and the short term planning for the organisation.

Conclusion

From the above discussions, it can be concluded that it is very essential to bring the organisational change within the system so that they can embed new working culture within the company. Altering the system within the organisation so that they can involve their employees within the working it helps in maintaining the equilibrium of work. The duty of the management team is to look into the affected areas needs alteration whether it is related to the external pressure or the internal pressure within the organisation. Taking into the consideration of the case-study then it can be observed that the business administrative of Honda Motors is planning to update their system and make new strategies to tackle the changes. In order to survive in the market, every organisation must make specific planning so that they can save their company from its external threats. The background of the report also focuses on the strategic approaches that must be taken by Honda Motors so that they can again accelerate their business in the market.

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