Whitbread Plc and Change Management Essay

Decent Essays

Traditionally a vertically integrated brewing company, Whitbread (WB) had to face a new market situation in 1992. Anti-monopoly regulations limited the company’s opportunities to profit from economies of scale and further growth opportunities in the beer industry. As a consequence, WB proactively started to diversify and grow a leisure division that was successfully headed by Dean Thomas, who was appointed CEO in 1997. At that time, it seemed clear to outsiders that the beer business would not be profitable in the long-run. However, Thomas adhered to WB’s legacy and tried to close a huge deal to acquire new pubs. Only after the deal had failed, which triggered a severe company crisis (WB’s stock price crashed, Thomas’ reputation and …show more content…

He neither intervened nor did he draw any personnel consequences when the managing directors of two divisions refused to cooperate and he also failed to cope with the well-known problems of the restaurant division and didn’t push its manager to take necessary steps for restructuring the unit. Although Thomas succeeded to effectively change WB’s portfolio of business, he did not succeed to develop and communicate a clear strategic vision for the whole group and each divisions operated more or less independently without achieving any synergies. In 2001, Thomas realized that he had underestimated the power of a strong and unifying group vision and initiated the “Strategic Fitness Process” (SFP), which was intended to engage both management and employees in the necessary organizational and cultural change. However, he deviated from the SFP process suggested by external consultants and eliminated essential steps, which would have forced the management team to collectively discuss the strategic intent of the company and to jointly develop an action plan. This can be interpreted as perceptual barrier of Thomas, because he did not realize that it wasn’t only him who had to drive the change, it was also his managers and employees. Especially the latter were very passionate, but at the same time disappointed by the missing strategic direction and leadership skills. Subsuming, it can

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