Managing Change in Organizations

Topics: Management, Change management, Kia Motors Pages: 12 (3792 words) Published: September 24, 2011
Name, Surname: Shake Badalyan

Student 13891; MBA (Project Management)

Module: Managing Change in Organizations

Date for Submission: 25 April 2011

Word Count: 3690

Contents Page

Organization’s brief description

Main drivers for change and key management objectives

Action plan

Managing the change Implementation process

Change process assessment

Further related changes


Organization’s brief description

Kia Motors Company was founded in South Korea on June 9, 1944 as a manufacturer of steel tubing and bicycle parts by hand. Kia Motors Corporation is Korea's oldest manufacturer of motor vehicles and it produces over 1.5 million vehicles a year. There are 13 manufacturing and assembly operations in eight countries producing vehicles which are then sold and serviced through a network of distributors and dealers covering 172 countries. Kia today has over 42,000 employees worldwide and annual revenues of over US$14.6 billion. Kia Motors Corporation's brand slogan is "The Power to Surprise” (Kia website

The word Kia is derived from the Korean words and it means “to arise to the world out of Asia”.

“Kia Motors Armenia” CJSC was founded in 2006 and signed a distributorship agreement with Kia Motors Corporation and became one of the leading auto importers in the Republic of Armenia. Kia Motors Armenia is the official and exclusive distributor of Kia Motors Corporation in Armenia and the vehicles are imported directly from the Republic of Korea. It has both a showroom and a service department for repairs after sales. When first founded, Kia Motors Armenia adopted a strategy for their company which states: “safe and quality cars for reasonable prices” (Kia Motors Armenia website

Main drivers for change and key management objectives

Kia Motors Armenia has been undergoing many changes since August 2010. Below I will state the reasons that led to these changes and the process of the change.

At the end of the year 2008, the world was under the shock of the collapse of the US financial market which had a huge impact on the global financial system. The wave of this calamity affected Armenia’s economy also during 2009. The sudden stop of capital flows, the change of the oil prices and decrease in exports resulted in a drop in the GDP. As an emerging economy and with a population of 3 million, Armenia’s auto sector was a new one and this financial crisis had an impact on the buying behavior of the country. But the 2009 sales figures were not as shocking to the investors of Kia as the losses that they had. They realized that maybe this was more than the effect of the wave of the global economic recession. Although the sales of Kia cars did not drop vastly, the investors were losing money.

The ultimate goal of the investors is to increase profit, but Kia Motors Armenia was having major losses although vehicles were being sold. This alarmed them and they realized there was a problem with the financial scheduling and forecast of the company. After the hiring of new management, it turned out that there was poor financial planning system in the company with no concrete system for payment facilities, discounts, or even ordering. The average time of delivery is four months from the initiation of the order from the factory until it reaches Armenia. But Kia Motors Armenia had to transfer money when they put the order, and since the liquidity was low, the number of vehicles ordered was inconsistent from one month to the other. There were even times when zero order happened.

Another problem at Kia Motors Armenia that came to the attention of the new management was the ineffective payment structure for the entire employees. There was no systematic wage structure for the employees that ordered jobs on the basis of worth. Even the salaries of certain employees differed from one month to the next.

The organizational chart at Kia Motors Armenia was flat with...

Bibliography: Organization’s brief description
Kia Motors Company was founded in South Korea on June 9, 1944 as a manufacturer of steel tubing and bicycle parts by hand
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