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First Order Change In Organizational System

This study discusses the impact of change in the business towards management and the obstacles that the company have to face. This review used two main methodologies, namely: case study and interviews. A case study was used to review on the change of the business which is based on first-order change. In addition, an interview was used to study the notion of the management towards decision making on changing. In order to achieve this purpose, in-depth interviews were conducted with Helper General Director and the Marketing Exec of the business. The change of firm can be seen through changing system in multi-level marketing to single-level marketing. The effect from this study has been examined using observational method, organised interviews, and analysis of documents, to be able to identify the impact from change system. It is expected that the studies of this research will give a understanding and knowing of the various troubles in taking care of effective management towards change system.

Keywords: First-order Change, Problems In Changing

Introduction

This research project was conducted at Period Edar Marketing Sdn. Bhd. (EEMSB), a Bumiputera had company that marketplaces health products made by a network company named as "Kumpulan Syarikat Doktor Azizan" (KUSDA) located in Jitra, Kedah. EEMSB is also one of any company under KUSDA apart from other support companies such as Homeopathic Laboratories (M) Sdn. Bhd. (HOMEOLAB), also the designer of the majority of the merchandise of EEMSB, KUSKAMEI the developer of spices, Printing Time PDA (PEPDA) producing printed materials, Centre for Homeopathic Medicine & Biochemistry PDA (PPHB) which is based on the natural treatment clinic and biochemistry, School of Homeopathy Chamber of establishments in the field of alternative remedies and homeopathy and biochemical UNA Beauty House of Beauty & Care and attention Centers Face.

Found by the overdue Prof Dr Azizan Bin Ismail, mainly centered to advertise health products produced by him which based on homeopathic medicine known as Biochemistry Schuessler, Herbalisme and Aromatherapy. Products sold by EEMSB are based on the idea of "Halalan Toyyiba" which really is a part of Islamic "halal" products and good for health. They have received many compliments due to its effectiveness is being proven successful.

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By using the image of Prof. Dr Azizan as a trade symbol and immortalize him on the products logo, EEMSB is now well known throughout Malaysia, Singapore and Brunei Darussalam. Even though the business was established in 2001 but actually the business enterprise had started out since 30 years ago when the creator has marketed the products through his clinic which was controlled in Jitra, Kedah.

Later in 1985, he had made a stepping rock to appoint one of the company's based in Kuala Lumpur to be his distributor. This joint-venture business has carried out until 1989, when the past due Prof. Dr Azizan had set up "Sistem Era Edar Sdn. Bhd. " known as SEE on a single year. In those days SEE was the business which deal the business enterprise located at Bandar Darul Aman that was known as Tanah Merah, Jitra. The business was conducted in conventional method and the distributor was appointed to spread the merchandise to certain specific areas or locations.

This direct selling business has started out when SEE is produced only on July 18th in 1991. In 1998, during the economic crisis, the company had no revenue and faced loss as a result of situation, which lead to retrenchment of a few of the staff. Nevertheless, with the remain workers, the business continues to be productive whereby, Prof. Dr Azizan, has made a business name as Period Edar Marketing Sdn. Bhd. (EEMSB) on the Apr 1st in 2001. EEMSB is put as the head office for the Group Companies of Dr Azizan (KUSDA), now involves 125 employees from the KUSDA and from the nine service centres in Malaysia by the concepts of multi level marketing.

Literature review

Change defined as an attempt that includes actual physical changes to operations and different mental stimulation (Bernerth, 2004) is agonizing in the workplace, going from what is certain and known to the in any other case. So, organizational change is normally conceptualized as moving from the status quo to a new, desired, configuration to raised match the surroundings. Change therefore is seen as a departure from the norm or alternatively as normal and a natural response to environmental and inner conditions (Bernerth, 2004).

Change is approximately adaptation and resiliency while maintenance is about continuing activities, composition and function. Nevertheless the change of the organization might be first-order change or second-order change which paper makes an attempt to reveal the change of organizational is based on first-order change. First-order incremental change may involve modification in system, processes or buildings but it generally does not involve fundamental change in strategy, central values or commercial individuality (Palmer, 2009). Contrasting with second-order change that is more radically enhance. For Period Edar Marketing Sdn. Bhd. the first-order change that they have being made is dependant on a few factors that we will be discovered.

3. 0 Research Methodology

Data collection involved interviewing with General Assistant Manager, Dr. (H) Mazelan Bin Ismail and Marketing Executive by Dr. (H) Che Normawan Bt Idris. Each one of these data collection techniques have used observational methods, organised interviews, and evaluation of documents. A qualitative design and "Open Question" was found in the interview. The research question was: why company makes a decision to change their system and exactly how they deal with the obstacles that came from company itself, people and vendors.

Based on the questions, objective for the research was developed to make a clear understanding towards this research. It really is related to three parts: conception from the business change, impact from the business change, execution of organizational change.

Objective 1: why they choose the machine (Single Level Marketing) and how the members perception from the change?

Objective 2: directed to enquire to what scope the impact of the organization change and how the member and distributor accept the change?

Objective 3: what's the strategy they used to execute the organization change?

During interview, we conducted semi set up and audio-taped interviews with the average duration of 60 minutes. Two different interview questionnaires were used - one interview questionnaire for Basic Assistant Administrator that is more to the managerial question, the other one was for Executive marketing which is more to outside the house challenges. Topics protected in both interview questionnaires were the same with few different questions for every single band of interviewees.

Open-ended questions were carefully worded to be as natural as it can be without creating uncomfortable situation or offending interviewees. Interview questionnaires for both interviewees were pilot analyzed to check on whether there may be any ambiguity or bafflement of questions.

4. 0 Research Findings

4. 1 Multi level marketing concepts

Prior to the, when Period Edar Marketing Sdn. Bhd. (EEMSB) used multi level marketing as their operation system, it is more to the top hunting principles which is finding the person or agent or organization people to expand the business. If there is no one be a part of, the company cannot growth well as a result of strength of this program lies in the amount of new people who interact rather than totally depends on the product itself. However, repeat purchase will happen if the included products have an excellent and useful towards customers.

The principles of multi level marketing is seen as:Read phonetically Dictionary - View complete dictionaryRead phonetically Dictionary - View detailed dictionar

The Company will need or appoint a person as a member of the business or being as distributor to disperse the products.

Member or distributor concerned will appoint another individual (organization) to create their own network to sell a company products. Recruitment of new people or new marketers can be prolonged until its reach a certain level.

Each member or distributors are certain to get commissions / bonuses / incentives from private sales and the sales or vendors in the network (over-riding bonus).

Figure 1: Multi Level Marketing

Member

1

COMPANY

Era Edar Marketing Sdn. Bhd

Supplier / Distributor

Member

2

Member

3

Member

1

Member

2

Member

3

Supplier / Distributor

Multi Level Marketing - In this strategy, the seller recruits other distributors or sales representatives, and also receives commissions and bonus products on the sales they make. Down liners are essential to increase the sales force, and thus generate a wide array of sales.

4. 2 Single-level marketing concepts

For the new system that EEMSB employing now could be known as solitary level marketing. Solitary Level Marketing (SLM) is a settlement plan for immediate selling in which sales associates are paid limited to their own personal sales activity. They don't recruit other sales agent and derive income from them as with a multi-level marketing (MLM) group.

The concepts of sole level marketing is seen as:Read phonetically Dictionary - View detailed dictionaryRead phonetically Dictionary - View complete dictionar

The company will appoint a sales consultant or the sales agent and pay salaries or commissions or by the combination of salary and commission payment from the sale made.

Sales reps / sales people were not permitted to nominate or sponsor sales agent and agent of the other sales.

Figure 2: One Level Marketing

COMPANY

Era Edar Marketing Sdn. Bhd

Supplier / Distributor

member

Retailer

Single level marketing- rewards the retailers for their personal sales activity. They do not sponsor another member or distributorship or sales personal. Income from the business based on fee or extra after sale of the merchandise.

4. 3 Change system and challenges

Various aspects needs to be taken into consideration in assuming that types of organizational changes can be neatly grouped as small, adaptive, and incremental compared to the ones that are large and transformational. Mental frameworks, individual perspectives, the extent to which an alteration is directly relevant to a person and his or her activities, and the degree to which he or she accepts the necessity for change will all affect the way the change is looked at. Here we choose to see from the management and participants of the business.

In view of the changes made by the company of Age Edar Marketing Sdn. Bhd. , MLM (MLM) improved to Sole Level Marketing (SLM), an aspect of similarity by both are subject to the same Direct Sales Act 1993 in which this Take action is to make provision for the licensing of these who carry out direct advertising business, the regulation of direct selling and for other matters connected therewith.

The concept of direct selling is where individuals were trained to understand their role not only on sales or sponsorship, but and yes it provides a unique route to customers and consumers in accordance with the requirements at that time. Therefore, sellers tend to be more alert and targeted to meet the needs of users in the process of purchasing and selecting products.

Advantages to participants or distributors in direct offering activities are that they can become leaders to themselves, deal with their own time, getting paid or the income of their own attempts, close ties and increase the amount of their contacts.

For the idea of MLM, the actions carried out need a lot of records. The three main purposes in this idea are to use, sell and sponsor. The management is only required to provide information and guidance to the major distributors to market the product. Vendors need to find and appoint down liners to market the product. This method not only stimulates the development of the business to develop in terms of regular membership but also users of the merchandise.

In MLM system, the extra is dependant on sales made anticipated and payable every month. It is by means of incentives on sales made by down liners. For this method, the dealer doesn't have to work hard to get rewards. In cases like this the product will not change.

Compared with SLM system, it includes three levels, using, retailing and sponsoring. For SLM method, all levels, whether distributors or down liners should make one for the benefits and returns that can be redeemed immediately. Returns or benefits provided by means of discounts or factors. Because of this method, the distributor or down liners are equal. Business through the SLM method is very simple, easier, and does not require down liners. It induces more people to trade and indirectly over the firms and product result. ListenRead phoneticall

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4. 4 Management Implementation

In causeing this to be change, the management has established a strategy of steady and prudent so as not to considerably affect the distributor, down liners, employees and goods sold.

The management provides a period of twelve months to sellers to make changes in conditions of bonuses and the income derived from the proceeds of the deal. Typically, the bonus will be paid monthly but the new system, add-ons and incentives receive immediately.

The main purpose of the changes made was to help make the business continued is dependant on the characteristics of Islamic business and non-conventional. Revenue earned income is more beneficial and everything parties share profits and earn rewards and benefits similarly.

An important aspect of the analysts' model is the idea of the "order" or magnitude of change. "First-order" change is change that is regular with prevailing values and norms, fits with general contract, and can be implemented using people's existing knowledge and skills. A big change becomes "second-order" when it's not obvious how it will make things better, it needs visitors to learn new methods, or it issues with prevailing ideals and norms. Second-order changes require market leaders to work a lot more deeply with staff and the business community. They can disrupt people's sense of well-being and the co-operation and cohesion of the business community. They could confront and task know-how and competencies and chuck people into areas of "conscious incompetence".

Different perceptions about the implications of change imply that a change that are a solution to 1 person can appear to be issues for another. To the degree that folks and/or stakeholder organizations in the company or company system hold conflicting ideals, seek different norms, have different knowledge, or operate with differing mental types of business strategy, a suggested change might represent a first-order change for some and a second-order change for others (Waters, Marzano, and McNulty, 2003).

Change and improvement of the sort takes conscious effort that is focused on clear outcomes, it takes the right group of conditions in the professional learning context, and it takes time. We cannot assume that because people may actually have discovered, it follows that they can change their practice or that because they may have altered their practice, it practices that every outcomes will improve.

The company faces challenges in which not all vendors who received the positive changes made. Some of them have ceased to be always a distributor because the feel there can be an injustice towards those people who have been longer available. The new system requires them to interact with down liners and equally be compensated, where else the distributor feels they are really pioneer and are entitled to more attention and privileges.

In applying the SLM system, the management should augment its initiatives to educate and provide home elevators all targets for this system is accepted and fully utilized. Aims are to provide convenience to all or any parties. While, the use of the old system, the business need to only provide training and information to the distributor against the new system whatsoever levels who are participating. Accordingly, companies should be more effective and require more extreme actions to be able to provide training strategies and be more thorough in explanations pertaining to systems and effective use of skills through wider multimedia.

Educators by any means levels of the system need to test the impact of transformed procedures on the diverse learners for whom they are accountable, using inquiry skills to guage when their practice offers the desired effects and when it isn't necessary and have to be modified. When such evidence-based tactics are firmly inserted, they can generate their own momentum.

Each view of change defined above reflects the actual fact that "changes in values and understanding will be the foundation of attaining enduring reform" (Fullan, 2007). However, "Understanding can follow action" (Spillane et al. , 2002). Learning may be deeper when it comes after attempts to try out new practices, and so both tactics and beliefs need to be addressed through a continuous routine of inquiry within and between educators' communities of practice.

In our cognitive platform, the nature of the changes sought by policy manufacturers is also important because some changes entail more technical cognitive transformations for applying agencies than others. Focusing on the total amount between continuity, growth, and loss, Marris (1975) identifies three levels of interpersonal change.

The first level is incremental change, which requires little or no alteration of the extant purposes or expectations of people commencing the change. Such change can be incorporated into existing schemas and frameworks alternatively than undermining them. The second level requires changes in the development of a few of the changes functioned, but still have goals and expects to stay intact the changes sought by an development, the greater the magnitude to which existing strategies must be restructured to form coherent understandings of the new ideas. (Spillane et al. , 2002). The third degree of change represents loss for the implementing agent, for the reason that it necessitates the discrediting of existing plans and frameworks. This level of social change is the most difficult to attain (Marris, 1975). For instance, change just how of incentives and bonuses predicated on any particular sales or points acquired through the period that is does not require changes in goals and anticipations of the company itself.

From the interviews conducted, we found that effective communication enjoyed a significant role in guaranteeing the system successfully operated. This, in turn impacted on the merchandise volume and the quantity increased of the marketers. Communication is important among management and employees or marketers, and also in sustaining romance among employees. Most of the interviewed employees concurred that tuning in skills, as part of effective communication, is one of the key competencies that the management ought to possess at all times. Before, after and during the implementation of change, management should pay attention to their employees and distributors thoughts and understand their point of view and emotions on the imposed changes. This might further help management to present future organizational change.

5. 0 suggestions

This research has disclosed suggestions for management in the immediate advertising industry - named volatile and susceptible businesses to external environment - concerning take what activities to be able to smoothly use organizational change. Emphasis on action orientated implications is to ensure that all issues and concerns are acted upon immediately without procrastination. When a decision to apply organizational change occurs in the direct selling industry, professionals as being responsible for the success of organizational change should focus on their communication procedure with employees or marketers, distributors' attitude, understanding of professionals' actions, vendors' inspiration and constant improvement of the working environment. Subsequently, the following activities are advised:

Action 1: Realize the value of effective employees' and distributors cooperation and cooperation, motivation at work. Before implementing an alteration in the system, managers should comprehend that different individuals keep dissimilar opinions about change. Also, not absolutely all employees, marketers and member are outspoken and inclined to be honest with their professionals or up line that is management. Therefore, professionals must have the initiative to connect to employees and keep them educated about any organizational change. By retaining communication and listening to employees, and distributor professionals can understand their unfulfilled needs and amount of resistance to change. That is where, in the unfreezing Lewin's level (Levasseur, 2001) the communication should be improved between professionals, employees and distributors.

Action 2: During the implementation of organizational change, which is the moving Lewin's level (Levasseur, 2001), managers should be able to understand employees' and marketers behaviour, but also they have to keep in head Conner's (1998) levels of human circuit of negative response in related industry, such as stability, immobilization and denial. As market leaders, professionals should guide and immediate employees across the organizational change process, be aware of need for employees' determination to carry on with change, and be receptive to new ideas that come from employees. Hearing and explaining to employees is a necessary process to influence them about the projected benefits that are anticipated from the introduced change.

Action 3: When the change is applied, which is the refreezing Lewin's level (Levasseur, 2001) professionals should continue to communicate with employees about the change executed. This will likely promote an open exchange of ideas and information among all parties. By being attentive, professionals can discover from what extent change affects employees especially distributors and take corrective activities immediately to support them. For instance, managers should be aware that although organizational change influences that bring excellent results into the related industry do definitely not bring positive result to their marketers. Change of an operating system especially in providing and marketing the merchandise may increase employees' income with extra workload creating tiredness and low spirits. To vendors this is such a problem to allow them to work hard than the old days just sponsoring the down liners to get benefits.

We can conclude that, before the change occurs it seems important for managers to have comprehensive research of the implementation of organizational change to allow to ascertain at amount the change is effective to both management performance and employees. Since the direct advertising industry takes a high labour input, management should focus on different sorts of impacts enforced on employees. They must, in particularly, keep in mind employees' motivation create an environment that encourages employees to simply accept change and preserve the business's product competitiveness.

6. 0 Summary

Research has been done in Age Edar Marketing Sdn. Bhd. , we recognized that observational method, set up interview and examination of document is used in research. We found the company is using first order change. Hence we recommend three action strategies should be implemented in order to improve the development of the business. Methods are as employees' desire, accept change and support product competitiveness.

As a realization, this study was done successfully and had achieved its goals to study about how SLM works in the company. We found that effective communication enjoyed a significant role in ensuring the system effectively controlled. Communication is important among management and employees or marketers, and also in sustaining marriage among employees. Understanding the people entail and communication are part of success of the implementation the machine.

7. Acknowledgements

We wish to thank Era Edar Marketing Sdn. Bhd. (EEMSB), because of their support and agreement in providing the study grant for us to review about the change in business in order to complete our research and achieve the aim of this course.

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