Spar Applied Systems (A): Organizational Change and Team Management

Everybody is familiar with the cliche that the only constant in this world is change. In today’s fast-evolving environment, people attempt to manage change in their everyday lives, seeing its potential and enormous benefits. For business organizations managing change has become an important strategy to achieve competitive advantage and to position oneself on top of the competition. One of the critical success factors in managing organizational change is teambuilding.

In the case study “Spar Applied Systems (A)”, Laura Erskine covers the issue of teambuilding, employee participation, organizational change and change management. Specifically, Erskine presents the dilemma of Stephen Miller, Spar Applied Systems General Manager, who is confronting a major project overrun. The team began working on their project in 1994. After two years, however, in their presentation of the projected budget and schedule to the executives, Miller was amazed to know that there was a potential $1 million overspend in order to satisfy their contract.

Originally, the budget was $3. 5 million, $2. 5 million of which was shouldered by the company. When Miller questioned the team members during the presentation about the overrun and overspend, he was surprised that the team could not respond. The case study first tackles the organizational change initiatives and management at Spar Applied Systems. In 1992, Jason Rigney led the successful merging of Spar Defense and Leigh Instruments. Through his leadership, contracts were stabilized and Applied Systems was founded.
However, the environment was beginning to become more and more competitive, and the competition came from large-scale, highly flexible, and vertical integrated firms who had gone global. When Miller joined the Applied Systems Groups, he was greeted by a hierarchical organization, people with precise position descriptions, and activities directed at completing programs on a “cost-plus” basis. As a change facilitator, Miller wanted to: (1) dramatically change ASG culture, (2) facilitate the division to make money for more than six consecutive months, and (3) design and implement a global long-term strategy.
Miller clearly approached his strategies using the transformational change framework. Basically, transformational change occurs unambiguously at the level of the organization. Transformational change is usually considered as a subset of strategic change. It can be argued that transformational change is a particular form of strategic change and radical in its impact. It involves a complete rethinking of how the organization is structured and managed, and a rejection of the norms and practices of the larger environment in which the organization operates.
In such change, instead of conforming to procedures practices defined by prevailing rationalized concepts of organizational work and institutionalized in society, the organization redefines itself independently of those policies and procedures. However, while Miller’s management of the organizational change had provided enormous benefits to Applied Systems, many employees left the organization; and those who stayed did not fully endorse the new structures and systems. The new organization is also characterized partly by resistance.
This failure is reflected in the relationships within the Avionics 2000 Integrated Program Team (IPT). For example, IPT members had difficulty going along with their leader, Mike Ellis. Team members were also having problems in participating in team skills training sessions. Many of them preferred the old system.
In addition, they found planning and scheduling activities very challenging. In general, the case study suggests that the organizational change at Applied Systems failed to transform the organizational culture, as evidenced by people who do not fully support (some others resist) the new system and structure.
The case study provides important insights how to effectively manage change, engage people, build a team, and carry out a project. In the end, Miller might want to change the IPT leadership. What the team needs to complete the project is a competent, transparent, and prepared leadership Reference Erskine, L. (2002). “Spar Applied Systems (A)”. In G. H. Seijts (ed. ), Cases in Organizational Behavior, pp. 132-142. New York: Sage.