Managing Change in Organization - Report Example

CHANGE MANAGEMENT Name Institution Date Table of Contents Abstract 3 1 Introductory Statement 4 1.1 Executive Summary 5 2 Main Issues to be addressed 5 2.1 Discussion of Main Issues 7 3 Solution 9 4 Recommendations and Discussion of Recommendations 11 4.1 Trials of Recommendations and Results 12 4.2 Review and Measurements of Results 13 5 Summary and Conclusion 15 References 16 Abstract Change management explicitly depends on the abilities of the leader to channel the changes systematically in their respective organizations or team without developing negative or adverse implications on the intended people. In implementing change, organizations consider taking into consideration implications of the change on employees and other organizational stakeholder and adjust effectively towards implementing the change in a manner that minimizes negative impacts and correspondently maximize positive impacts. The analysis presented in this examination critically analyses theories and concepts that should be taken into consideration when implementing a change aspect by critically examining a case at Organization X where a new CEO made and implemented few changes. It begins by introducing the concept and the case study, and provides an executive summery to the concepts to be discussed. It then determines the key issues to be addressed with respect to the presented case, discusses the key issues with respect to various theoretical and conceptual frameworks, provides solutions and thereafter presents recommendation which if put in place shall assist the organization implement the changes effectively. Keywords: Change, behaviour, concepts, theories, issues CHANGE MANAGEMENT 1 Introductory Statement Business or organizational effectiveness is impeccably dependent on the business or the organization’s management team or leaders. The leaders have the primary obligation of shaping the organization’s culture with respect to the contemporary business needs and stakeholder’s expectations. Employees in essence are a great and valuable capital resources for an organization and ensuring that an organization achieves its strategic goals begins by the organization realizing the vitality of the employees in the organization and aligning them, their interests and expectations to organizational goals through appraisals, trainings and creating collaborative working environment aimed at augmenting individual employee’s performance (Pinder, 2014). Many contemporary leadership researchers maintain that placing employees at the focal point of an organization’s culture is fundamental in enhancing employee development which correlates to positive implications to organizational development. It has also been determined that employees are the key drivers to change hence, organizations need to devise ways to embrace positive and effective change management that not only focus on the organization but majors on the employees as well (Carnall & By, 2014). With consideration to my organization, Organization X, a new CEO had been procured into the organization to assist in implementing budget cuts into the company with a period of two years from January 2016 to January 2018. The company management team had realized the soaring costs of operations that the organization was incurring and perceived the need to restructure expenditure and cost management systems which developed into a need for change, hence the acquiring of the new CEO. I can note, certainly, that since the CEO joined the organization there has been numerous changes unfortunately, according to my perception, are towards negativism. 1.1 Executive Summary Organizational behavior is an ideal criteria and approach that an organization deems unique to itself and through which the organization works as means to achieve ends. Every organization has a set of policies and principalities that it deems fit in establishing its goals and works towards those goals, hence, it can be said that organizational strategies is shaped by the organization’s behavioral aspects consisting of culture, organizational environment and how they influence business operations. One of the key organizational behavioral aspects is how organizational management handles its employees. Tactically, it can be connoted that employees are the primary determinants of organizational success as all organizational operation directly or indirectly depends on the human resource. Additionally, organizational development is a learning process in which the organizations has to embrace change from time to time as a way of ensuring future organizational efficiency. However, the manner in which the organization embraces change matters a great deal and the people presiding over the change aspect are worth considering. This article takes intent analysis on a case study where a new leader was assigned duty to manage change at Organization X. 2 Main Issues to be addressed When the new CEO joined Organization X, numerous changes were realized which affected the employees as well as the organization. However, from the changes, numerous challenges emanated which affected mostly the employees’ fraternity. The very moment he joined, the new CEO ordered all employees’ aged 60 and above to retire irrespective of the quality of their work in the organization and succession plan devised with immediate effect. Additionally, the new CEO laid off majority of non-national employees from the company, something which he perceived right for achievement of Emiratization target of 2020 which aimed at “Nationalizing 100% of the company.” Further, the CEO perceived that there was no time for employees’ induction and training following the layoff of “retirees” and “non-nationals” hence, the employees were directly placed into those positions. He went ahead to call for cutting of employees’ yearly bonuses and supplementary allowances and proposed additional charges on employees’ undertakings including 300 Dhs for Parking, 300 Dhs for Phone and the employees were henceforth expected to pay for electricity and water bills, something which the company took care of before. Furthermore, the new CEO supported by his management team stipulated for a cut of the employees’ health insurance cover which was strongly protested against by the employees and later restored. Finally, most employees within the organization are feeling insecure and are thinking of quitting the organization whenever an opportunity from a different organization arises. From these experiences, various problems that touches on theoretical aspects emanates and therefore, there exists an impeccable need to assess whether the new CEO means good for the health of the organization’s behavior and whether his decisions are justifiable with respect to contemporary organizational behavioral concepts and theories (Tyagi, 2015). Using concepts and theories, the examination in this paper shall assess whether laying off of existing employees is of significant value to cost and performance management, whether cutting benefits that accrue to employees is necessary in managing budget and maintaining outstanding performance concurrently, and the probability of the employees to remain in the organization irrespective of the terms imposed on them as well as effects of such terms on employees’ turnover. 2.1 Discussion of Main Issues With respect to the problems presented, it is noticeable that the CEO placed much emphasis on employees’ earnings and development. According to him, payments made to the employees were the major cause of surfeit budgets in the organization, an idea which I perceive not only wrong but also misled. Notably, there are other factors that are worth considering and exerts much weight on budgets that employees’ compensation and benefits. Carnall and By (2014), articulate that organizations shall only achieve success if only they centralize their employees in the organizational culture and encourage mutual involvement. The CEO distances himself from this reality and settled on “divide and rule” technique, firing numerous of the employees, restructuring the whole job assignment techniques and cutting heavily employees’ benefits and compensations. With respect to McGregor’s Participation theory, the CEO can be determined as an “X leader” who believes in autocratic management and have negative perception about the employees (Gürbüz, Şahin & Köksal, 2014). With respect to the presented response of the CEO on employees, it can be said that the leader perceives other employees as indifferent to organizational goals, prefer to be directed, controlled, and wishes to avoid responsibility which in an ideal scenario is fallacious as the factors in themselves are vital in determining employees’ motivation. According to the Vroom’s Expectancy theory, employee motivation is built on three major pillars consisting of expectancy, instrumentality, and valence (Seder et al 2015). In his explanation, Vroom maintains that performance is dependent or degree of effort, outcome is directly proportionate to effort, and that outcome follows belief. With respect to such an ideology, the new CEO failed to understand the need of importance of motivation which according to Vroom is equated as motivation = expectation + instrumentality + valence (Seder et al 2015). Failure to take motivation into consideration resulted into negative experience of change, high level of job insecurity and high employee turnover. The new CEO had settled on placing employees without interest and capability considerations and without factoring in induction and training. According to Hackman and Oldham in their job characteristic model claims that the task in itself is key in employee motivation as employees tend to partial to jobs which meets their expectations, enhances their knowledge and skills, and provides room for personal development (Hsu, Shinnar & Powell, 2014). The method that the CEO used to assign tasks to the employees neglected the meaningfulness of the work to the employee, failed to look into the compatibility of responsibilities assigned with employees’ capabilities and did not take into considerations knowledge of outcomes. Hertzberg in his Two Factor theory adds that motivational and hygiene factors are of great necessity in determining job satisfaction (Tyagi, 2015). In the hygiene factors, he outlines the key components that influence employee satisfaction consisting of policies and administration, working conditions, salary, job security, status, and interpersonal relations (Lashley, Hira & Frazier, 2015). The CEO’s take to cut down employees benefit and lay off a significant number of employees threatened on their job security, salary, and inter-personal relations which according to Herzberg surely results into the dissatisfaction of the employees. Such a behavioral approach of the CEO is deemed to affect the organizations long-term approach to performance. This is best explained by Skinner in his reinforcement theory where he maintains that the consequences of a particular behavior can be replicated on the future occurrence of that behavior, something he calls operand conditioning (Corr et al 2015). He connotes that behavioral approach is dependent on positive and negative reinforcement which strengthens behavior and punishment and extinction which weakens behavior (Pinder, 2014). It is notable that the CEO’s take to reduce salaries and cut on other benefits are clear indicators of punishment to the employees and his take to dismiss numerous of them as a clear indicator of extinction which Skinner generally determines as behavioral weakening factors. Motivation, which is the main determinant of performance precisely, depends on people’s behavior. The CEO’s take in the long run resulted into high employee turnover with larger numbers of employees going for other options and quitting the organization. The remaining few were greatly adversely affected and lost focus in their tasks resulting into low returns. 3 Solution What therefore could he have done to misspell such mischief to the organization? To begin with, he should have realized that Organization X was just but a medium organization at its development peak and therefore organizational learning would have been of great essence to the organization. As a learning organization, X organization requires highly flexible working environment which not only aims at organizational profit making techniques but also employee development and motivation (Champoux, 2016). Using Lewin’s theory the CEO could have utilised the three stages in order to make conclusive changes that do not affect employees. In the unfreeze stage he could have made it clear to the organization on the need for change. In the change stage, he will then make the changes and lastly the refreeze stage however, he should realise that modern organizational and change management is pegged on ability to work in cross-functional teams hence he should have shunned away from bureaucratic leadership where he makes all decisions and have others abide by them. Hogg & Terry, (2014), in their participative approach to leadership maintains that for effective management of change, leaders must take into consideration the ideas, opinions and perceptions of everybody that shall be fall victim of the change, note what the people perceives right of the change and work towards embracing or changing those perceptions before implementing the change. The CEO in his change implementation did not consult anybody neither did he consider the long-term implications of his change management strategies which later reflected into negativism on employee morale and organizational performance, to avert this kotter’s change management will be effective. The CEO could have contemplated of the ideal and systematic change management technique consisting of the change itself, stakeholder’s perception of the need of the change, uncertainty, and anxiety appertaining to the change, development of concerns, acceptance of problems, planning for the change and stabilizing the change (Lepper & Greene, 2015). The CEO could have realized that change is not about coming up with principles and having them implemented but however it is about integrating new principles with the already existing ones so as to avoid excessive variance and reduce the impact threshold in the employees. Implementing budget cuts and budget control measures is a whole organizational concept which calls for transformation of the whole company (Band et al 2016). The CEO’s idea to settle on Employees alone is an act of segregation which does not mean good for organizational assessment. In cutting down budgets, the CEO could have as well considered vendors, suppliers, and customers as all call for organizational expenditure. For instance, say if acquiring products and services from supplier A is eating into our budget, what if we acquire same products from supplier B which might be cheaper and much convenient? Such discernment can only be achieved if an organization shun away from bureaucratic and centralized leadership to an inclusive and decentralized leadership (Carnall & By, 2014). In organization X, I noticed that there was minimal longitudinal communication though an outstanding latitudinal one. Through a control hierarchy, orders were flown down and they had to be obeyed after which formal information were delivered upwards through predetermined chain of command. Such a system is not healthy to a learning organization as it deters information flow especially between management and operational workers. 4 Recommendations and Discussion of Recommendations In case I was the CEO, I could have taken into consideration a number of factors. Using PESTEL, SWOT, Lewin’s model , Kotter’s 8 stage model and Porter’s Five Forces analysis approaches, I could determined the main reasons behind the surging budgets and devised an effected change management plan to counter them. Instead of firing the over 60s and non-nationals, I could have assessed every employee through effective performance appraisal strategies to determine the most performing ones and the poorly performing ones and if need be then lay off the poor performers. Instead of directly placing employees and assigning them duties, I could have assessed their skills, knowledge, capabilities and interests so that despite lowering costs, I also maintain or boost employee as well as organizational performance. Training and development is more than just a necessity and doing away with it is ill-informed. To effectively make this changes I would employ the Kotter’s 8 step change model as well as the Lewin’s model. It is good to create urgency as it helps motivate individual to embrace change, building an experienced and skilled team to help see the organization through the transition, stressing to the employees the need to get the vision right as it is helpful in directing the organization. The next step is for the CEO to communicate about the changes he needs to make as this will prepare the employees psychologically and make them aware. Implementation of the findings will help remove roadblocks, get support and help things move faster. Next, the CEO would focus on short term goals like minimising overhead costs, terminating unwanted supplies and minimising expenditures by the executive board members. There is a need for the CEO to be persistent and committed, this will help him sail through with the changes one step at a time and finally incorporate the desired changes in the workforce culture as this will help align with the organization’s behaviour as well as the practised customs. By systematically implementing change the CEO, will avoid a backlash and make the employees feel valued 4.1 Trials of Recommendations and Results When performing PESTEL analysis, it is of great vitality assessing political, economic, social, technological, environmental, and legal factors affecting business operations, and reduce costs where possible (Miner, 2015). In using SWOT, it is important to take into consideration the strengths, weaknesses, opportunities and threats to the organization. For instance, for the time I have been in the organization, I have realized that the organization rarely applies technological concepts in managing accounts, inventory, and human relations. As such, it spends enormous amounts of resources in recruiting human power in performing tasks which would have rather called for fewer resources if machines and information systems could have been applied (Champoux, 2016). Therefore, I could have required the company to acquire integrated enterprise systems with capabilities to perform carious functionalities such as accounting, finance management, inventory management, payroll systems, strategic planning, and risk management amongst many others. I could have also called for the organization to consider mechanizing its production processes as a factor of reducing expenditure on human resource. Such systems shall greatly assist in boosting efficiency reducing costs concurrently. In using Porter’s model, I could have assessed effects of competitors’ strategies and new entrants on Organization X. In case competitor Y is producing supplement products to the organization, it would mean that Organization X must lower its output or find a new market or increase the quality of its products or invest in promotion to avoid cases of dead stock which is harmful to organizational budgets. Finally, developing a work environment marked with outstanding corporate cohesion is not only marked for its efficiency but also cost effectiveness. In the docket of the CEO, I can consider developing a collaborative and cohesive workplace where employees can freely, openly, and unboundedly communicate, longitudinally, latitudinal-wise, and diagonally. Such an approach shall result into increased trust between employee and management, teamwork, support, innovation and better approach to problem solving. 4.2 Review and Measurements of Results Lewin’s refreeze approach will be instrumental in assessing the results, thus, having implemented the integrated information system, I believe that the organization shall have better control over organizational processes, capital, and resources. With the information system, there shall be no need for numerous accountants and data entry persons as ones the data is entered analysis, structuring and summary is done automatically assisting in doing away with excessive and avoidable expenditure on human resource (Carnall & By, 2014). The integrated system shall also assist the management in planning, budgeting, forecasting, and investing assisting in boosting effectiveness, integrity, and transparency of organizational processes. The information system together with mechanized work shall assists the organization a great deal in abridging the work processes enhancing employees motivation towards the work as McGregor outlines in his theory X where he asserts that people have work is a source of satisfaction and inherent like for work. Further, implementation of a more collaborative workplace will call for the organization to break down the hierarchical and bureaucratic system to where each employee can indulge in decision making processes and communicate in a more open and boundless manner. This shall increase trust and reduce cases of mistakes and conflicts (Gürbüz, Şahin, & Köksal, 2014). As Urwick states in his theory Z, an effective working place exists when an individual realizes that organizational goals are to satisfy his/her individual needs and when each employee can work collaboratively towards achievement of those goals (Nilsen, 2015). Theory Z calls for strong bond between employees and organization, employee participation and involvement, minimal or no organizational structure and human resource development. With participative and collaborative approach, the organization shall surely achieve such organizational aspects which will consequently result into exceptional organizational performance and budget effectiveness (Burke, 2013). 5 Summary and Conclusion Evidently, organizational behaviour is a crucial aspect in shaping and determining organizational performance, expenditure and the general organizational attributes. This article have critically brought forth that considering employees’ interests and expectation is key and must be taken into consideration before implementing a change strategy. An organization needs to assess its employees, suppliers, customers and government amongst other organizational stakeholders before settling on a change aspect and criteria to put in place in implementing the change. The new CEO of organization X is certainly avid of implementing the budget cut change aspect however, from the discussion it is clear that his priorities are misplaced and aims at disintegrating the employees and implementing the change through threats and punishment is not healthy for organizational performance and effectiveness. The recommendation section if were to be implemented would have assisted a great deal in not only trimming down the budget but also boosting organizational culture through collaboration and coherency as well as assisting the organization keep abreast with the contemporary technology and business issues. Certainly, organizational positivism is only achievable through effective approach to organizational behaviour which aims towards appropriate organizational learning processes. References Band, G., Shah, N. V., Sriram, R., & Appliances, E. (2016). Herzberg Two Factor Theory among the Management Faculty in Nagpur City. 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