STRATEGIC MANAGEMENT

Strategic Management

Strategic Management

Introduction

Strategic management is a powerful tool for change management, as strategic management pays meticulous attention to the implementation of strategies (Olsen and Eadie, 1982). This article describes how change was implemented successfully in a large public transit system in Australia using a combination of general management and human resource management strategies.

The article describes how the transit system changed from a cumbersome, bureaucratic organization incurring high levels of operational losses to an accountable and commercially focused organization with a clear vision of the future. The changes were achieved by a combination of factors including organizational restructure, modernization of the bus and ferry fleets, reform of work practices in line with the structural efficiency principle, a focus on customer service, emphasis on staff training, enhancement of career opportunities and the harnessing of new technology.

Initial steps in the change process

A State Transit Authority board was established, consisting of highly successful proactive private sector managers and representatives of the union movement. The first initiative of the incoming board and new management teams was to develop a corporate plan for the future direction of State Transit. It provided for a break-even on operating costs for the 1991/92 financial year, that is a $70 million turn around in operating losses in the space of only three years. The board also recognized that for too long attention had been directed to the “people” in the organization when examining inefficiencies and the need to reduce costs and increase productivity. Huge resources had been spent attempting to change the workforce to adapt to organizational structures containing outdated systems and processes rather than directing attention to the organization and reshaping aspects of the work function. State Transit management's vision for the future of the organization was articulated in business plans and service goals, with efficiency and effectiveness as keynote principles. State Transit, in developing its vision, examined key questions including such issues as: Which business should they be in? Which activities should be discarded? Which activities could be contracted out? Which activities are not performed currently but should be performed? What are the business goals including market share expansion to be gained each year? How will the goals be achieved? What is the time frame for achievement? and Who is accountable for the change process?

In the process of examining and analysing all the issues, State Transit established another essential element of its corporate philosophy, i.e. job security within State Transit would depend on how much its customers sought the services of State Transit, and could no longer rely on government subsidy or the use of industrial muscle. In order to promulgate this element of philosophy, management decided to take the radical step of talking directly to the employees rather than talking to them through the unions. State Transit recognized the formal role the trade union movement plays in industry. However, State Transit insisted that it was essential for the progression of its mission that it talk directly to its ...