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Ajax Minerals and Perrier 6 pagesRead the Ajax Minerals exer

    Ajax Minerals and Perrier 6 pagesRead the Ajax Minerals exercise and theProblems at Perrier case study below:NO INTRODUCTION1.Identify two (2) sources of resistance tochange in the Ajax Minerals exercise and describe how the organization dealtwith each type of resistance. Answer 2.Identify two (2) sources of resistance tochange in the Perrier case study and describe how the organization dealt witheach type of resistance. Answer3.Compare and contrast how managementdiagnosed and approached change at the two (2) companies and indicate whichcompany dealt with resistance to change in a more effective manner. Justify thereasoning.  Answer4.Consider a situation as a consultant withAjax Management. Propose two (2) adjustments that should be made to improve itschange strategy and provide a justification as to why those adjustments wouldimprove the effectiveness of the strategy.Answer5.Consider a situation as a consultant withPerrier. Propose at least two (2) adjustments that should be made to improve itschange strategy and provide a justification as to why those adjustments wouldincrease the effectiveness of the strategy.AnswerNO CONCLUSION 6.Use at least three (3) quality academicresources in this assignment. Note: Wikipedia and other Websites do not qualifyas academic resources.CASEAjaxMineralsAjax Minerals is a U.S. mining company.Recently, it was operating at full capacity, but there were problems on thehorizon. Within the next three or four years, Pacific Rim companies will beable to mine and ship the same minerals to the United States for less than Ajaxcan get them out of the ground. The leadership team saw this challenge andwanted to do something immediately. However, no one else in the company saw thethreat. Supervisors and hourly workers could only see that work was going onaround the clock and that they were earning a lot of overtime pay.Although the current group of seniormanagers was fairly well respected, there was a history within Ajax of poorlyrun changes and even poorer management-labor relations. The latter had got sobad that if management asked for something, workers were immediately suspiciousthat management was up to something that would have unpleasant outcomes for theworkers (e.g., layoffs, pay cuts). In light of this, the leadership team wasaware that, at the very least, the workers’ reaction to any current initiativewas likely to be a resigned ‘here we go again.’ Similarly, they wereconcerned that the union was likely to view any reference by management to ‘problemson the horizon’ as a ploy to gain concessions during the next contracttalks.Given the history of their relationship,the leadership team expected workers to drag their feet on implementing any newapproaches and by so doing undermine the prospects of success. Historysuggested that both supervisors and workers would do just enough to ‘getby’, that is, they would provide minimum compliance.Ajax management responded to the situationby establishing interactive sessions involving managers and supervisors. Theydecided that they needed to make a compelling case for change before they beganthinking about specific strategies. In the past, they had done the planningbefore ever getting others involved in any way and suspected that that hadcontributed to the subsequent resistance. During the interactive sessions, thegeneral manager and the managers made the case for change. As part of thisprocess, they used stories about various companies that had faced similarsituations and had suffered badly as a result of their inability to respond tocompetitive forces. They also, for the first time, adopted an’open-book’ approach in which employees were given unprecedentedaccess to data on Ajax’s financial performance, particularly ‘the numbersthat drive the business.’ Following on from this, a practice wasestablished whereby workers, supervisors, and managers met weekly to share keyperformance numbers.In view of all the Ajax management, theyare already seeing a new level of cooperation between management and labor andare hopeful that it will help turn around the situation that has applied in thepast in terms of management labor relations.Problemsat PerrierPerrier may well be the iconic brand in theworld of mineral waters. However, regardless of the profile of the brand, thecompany that produces the bottled sparkling mineral water is having a toughtime. It is the focus of what one commentator describes as ‘a viciousstruggle underway for the soul of the business’.The origins of the Perrier company can betraced to 1898 when a local doctor, Louis Eugene Perrier, bought the mineralwater source near Vergeze, France. The company grew steadily, but demand reallyescalated in the late 1980’s when it became highly fashionable and championedby a range of admirers including Wall Street yuppies. At its peak (1989),Perrier sold 1.2 billion bottles (830 million in 2003,) almost half toconsumers in the United States.The boom years were good for the Perrierworkers. Bouyant profits were associated with regular pay raises, socialbenefits, and extra holidays. However, in 1990 the finding of a minute trace ofbenzene in a bottle led to the collapse of U.S. sales. By 1992, annual outputhad halved and the company was close to bankruptcy. At this point, it was boughtfor $2.7 billion by Nestle, the world’s largest food company. Attracted by thecombination of bottled water as a fast growing business and the world’s bestknown mineral water brand, Nestle identified Perrier as an attractive takeovertarget.However, Perrier struggles to turn aprofit. In 2003 its pretax profit margin on $300 million of sales was only 0.6percent, compared with 10.4 percent for the Nestle Waters division overall. In2004, it again recorded a loss.The Perrier factory is on a 234 acre siteon the Mediterranean coastal plain near Nimes. The factory itself is rathernondescript, so much so that ‘from a distance it could be mistaken for apower station or auto plant. Perrier employees work a 35-hour week and earn anaverage annual salary of $32,000, which is good for this part of France andrelatively high for this industry. However, the average Perrier worker producesonly 600,000 bottles a year, compared with 1.1 million bottles at Nestle’s twoother international French mineral water brands (Vittel and Contrex).Relations between management and workersare not good. Almost all (93 percent) of Perrier’s 1,650 workers belong to theCGT, a union that is viewed by the management as consistently resistingNestle’s attempts to improve Perrier’s financial performance. According toNestle CEO Peter Brabeck-Letmathe, ‘We have come to the point where thedevelopment of the Perrier brand is endangered by the stubbornness of the CGT.’Jean-Paul Franc, head of the CGT atPerrier, sees the situation differently. In regard to the company’s plan to cut15 percent of its workforce, her protests, ‘Nestle can’t do whatever itlikes.’ He says, ‘There are men and women who work here…Morallyspeaking the water and the gas stored below this ground belong to the wholeregion.’When in 2004, Danone launched a new product(Badoit Rouge) that was designed to directly compete with Perrier’s new superbubbly brand. Eau de Perrier, Perrier’s management put bottles of BadoitRougein the factory cafeteria. This had been done to emphasize the point to Perrieremployees that they were involved in a head to head battle for that niche inthe market. However, this act was not well received.’It was a provocation,’ recallsone Perrier truck driver. ‘We took the bottles and dumped them in front ofthe factory director’s door, so he couldn’t get into his office.’

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