This paper seeks to explore the subject of organizational change in corporations. In so doing the paper will analyze in depth the fundamental questions of why, who, when, where, what, and how. Organizational change is a widespread aspect in any corporation may it be small sized, medium sized or large sized. A corporation undergoes change because it wants to deliver excellent services and products to its customers. In addition to better products and services, the company will undergo organizational change so that employees can have excellent performance. Organizational change can happen in three aspects: on the products or services, the employees, and the upper management. Organizational change refers to the notion in which the corporation revolutionizes its systems on a larger scale as opposed to small-scale changes in the organization like hiring a new employee or changing a program. Transformations in the corporations are because of external forces of the company. In most cases, the corporation will undergo organizational transformations in an attempt to evolve to a better degree of entrepreneurial activity.
Northern Rock Background Information
In this paper, we will focus on the organizational change subject in relation to Northern Rock Company, which took place in the year 2011. Northern Rock plc is the largest financial organization in its Northeast region home base. Before becoming, a financial institution Northern Rock plc was a building society, which later changed to become a largest retail bank in the United Kingdom. This transformation from a building society to retail banking took place in October 1997. As a retail bank, its major product is home mortgage lending. Northern Rock Plc has 100 branches whose main purpose is to serve as sales offices for the company’s products. Other products of Northern Rock Company include mortgage and re-mortgaging packages, which involves personal loan packages and linked home mortgages. The company attracts its many customers through its cost-efficient structure, postal based banking, and focusing on telephone banking over branch office banking.
The listing of the Northern Rock Plc on the London stock exchange took place in 1999 having assets, which made it possible to join the prestigious FTSE 100. This move led to the company being more attractive to organizational investors. Northern Rock’s chief executive officer is Leo J. Finn who has been heading the company for more than forty years (Willmott & Murphy, 2008).
Organizational Structure of Northern Rock Company
Initially the organization was a building society and in the twenty-first century, it transformed to a banking organization. This was through the acquisition of members and assets of other fifty-three building societies in the period of 1990s. The major motivation was the collapsing of many building societies in the time because of the vast recession in the British economy. The cost-efficient management structure managed to keep Northern Rock strong in the market as it acquired more assets and members of the building societies field. In the year, 1986 there was a new legislation in the United Kingdom, which gave building societies new markets in the banking industry. In addition to its mortgage products, Northern Rock introduced other products like life insurance products, nursing home industry, and many other products, which made it to grow in the banking sector (Yates, 2008).
The organizational structure of Northern Rock plc as a retail banking organization included cost-efficient structure, tight management, and highly competitive products in the market. In the year 1998, the company closed down twenty-five branches in an effort to maintain its organizational structure and promoting ATM and telephone services. The principal subsidiaries of Northern Rock company include Kings clear Homes Limited, Northern Rock Mortgage, Regency Care Homes Limited, and Northern Rock( Guernsey) Limited.
Who Acquired Northern Rock Company
In the recent times, there has been a great organizational change in the United Kingdom’s largest retail Bank Northern rock company. This organizational change has been due to its sale to another company in an effort for the government to exit from Northern Rock’s 2008 crisis. In a statement from the government, Britain consented to the selling Northern Rock Plc to Virgin Money. Virgin Money is a subsidiary-banking arm of Richard Branson’s Virgin Empire. Northern Rock had a financial crisis in which the government bailed the company. The foundation of Virgin Empire was in the year 1970 in London by Branson. It has about 200 subsidiary corporations under the Virgin Empire name and one of the subsidiary-Virgin Banking is the one that acquired Northern Rock Plc. The Virgin Empire subsidiaries consists of a variety of industries which are airlines, banking, telecommunication, space tourisms, wine, submarines, and balloon flights (Senior & Swailes, 2010).
Reason for Acquisition
Northern Rock Company before the year 2011 was an active mortgage and retail bank being the largest one in the United Kingdom. In the year 2008, the banking company fell on hard times in the financial aspects and it took the efforts of the British Government to bail it out of the crisis. In so doing, the Britain government was nationalizing the Northern Rock Company. Four years later after this acquisition the Britain government consented to selling the Northern Rock Company to Virgin Money bank as a way of reducing the British taxpayer’s shareholding in the banking sector. The move to sell the bank will mean that the government is no longer responsible for the debts of the bank. Acquiring the company from the government means that it will soon disappear from the high street as Virgin Money attempts to return the company to the market.
The location for the acquisition of the Northern Rock Company is in the United Kingdom where the British government and Virgin Money came to a consensus on the current ownership of the company.
After acquiring the Northern Rock Company four years ago, the British government wanted to opt out of the idea that the taxpayer’s money owned banks like the Northern Company. There was great competition from other interested investors who aimed at buying Northern Rock Company. In the end, the Virgin Money emerged the potential buyers of the company. Virgin Money had support from Texan private equity tycoon Ross Wilbur who was also interested in acquiring the Northern Rock Company. Texan is an investment vehicle founded to generate a new retail bank through buying assets from bailed-out incumbents. Out of all the proposals for buying Northern Rock Company from the government the deal from Virgin Money was the best available (Standard & Poor’s Corp., 2008).
Northern Rock Company has undergone several organizational changes from the time it was founded up to the present time. During its foundation, the company underwent organizational change in terms of its services and products it was offering the market. Initially, the company was a building society and in the 21st century, it transformed to a retail banking organization. This was a great organizational change as it even changed its name and the way of its operations. In the year 2008, Northern Rock Company underwent yet another organizational change in terms of ownership where by the British government took control over its operations. Another notable organizational change came in the year 2011 where Virgin Money acquired the company from the government a move that was meant to revive Northern Rock Company from the financial crisis. All these are clear indications of organizational change, which aims at ensuring that Northern Rock Company does not fall out from the Britain economy.