CASE STUDY 2
Implementing organisational transformation in Auzee Engineering Services (AES)1
Dr Shoaib Riaz, Dr Nell Kimberley and Dr Damian Morgan
Today’s business environment is changing faster than ever before (Michel, By & Burnes, 2013; Nonaka, Kodama, Hirose & Kohlbacher, 2014). Business profiles, operations and even existence are in swift transformation. Ninety per cent of Fortune 500 companies existing in 1955 are now defunct, merged or reduced in size. And since 2000, 52 per cent of companies then listed in this same index have either gone bankrupt, been acquired or merged with other firms, or now exist in a reduced capacity. Companies are getting younger too. In 1960, the average company age on the Standard and Poor’s 500 was 60 years. This average has continually shrunk since this time, and is forecast at just 12 years by 2020 (Novellino, 2015). At the current rate of replacement, 75 per cent of today’s Standard and Poor’s 500 companies will no longer exist by 2027 (Perry, 2015). Clearly, there has been a great deal of market disruption over the past 60 years and these changes are becoming increasingly rapid. These changes also reflect an increasingly unpredictable, dynamic and disruptive external environment that managers now face. The essential challenge is to maintain company prosperity to ensure continued viability. In response, managers commonly respond to external challenges by adopting large-scale organisational change, better known as organisation transformation (OT) (Hoyte & Greenwood, 2007; Rouse & Baba, 2006). In Australia, previously held notions of once-a-decade change by managers have been replaced by new realisations where continuous and transformational change is considered the norm and is regarded as central to organisational success (Graetz & Smith, 2010; Smith, Oczkowski, Macklin & Noble, 2003). The willingness to adopt OT is evident in many large and successful Australian organisations, including Qantas and Coca-Cola Amatil (Coca-Cola Amatil, 2015; Qantas, 2013) and, as the focus of this case, AES.
INTRODUCTION TO AES
AES is a regional Australian subsidiary forming part of a global multinational group -Go Global Engineering Services – with headquarters in Europe; this multinational organisation is a leading global supplier of engineering technologies and services. The company has operated in Australia since 1918. The Australian group operations are divided into four business sectors: mobility solutions, industrial technology, consumer goods, and energy and building technology.
Auzee Engineering Services is a hypothetical organisation.
CASE STUDY 2