The Requirement of Change, Recent Change at Procter & Gamble - Case Study Example

Recent change that occurred in your organisation and how as a leader it could be managed. College Name of the Student: Name of the Instructor: Name of the course: Code of the course: Submission date Author note: Introduction There is both an ease and a difficulty encountered in an organizational change and each change in intended to bring a consequence that is positive in terms of overall growth of an organization, profitability or even expansion. Organizational change has been linked to various aspects by different scholars and it has continued to be debated from as far as 1957, a year in which Merton argued that while change in a non-bureaucratic organization is easy, one in a bureaucratic setup is difficult. It is because the latter is inherently conservative and thus resists change of any sort. There are a number of rules and regulations that come in the way of the change. In 1961 Burns and Stalker divided organizations into mechanistic and organic types saying each type of an organization reacted to change differently. Mechanistic organizations prefer to work in stable business environments and thus may be somewhat resilient to change, but organic organizations are more dynamic and adapted at dealing with uncertain environments and thus open to change (Lawrence and Lorsch, 1967). Child (1972) in early 1970s polarized this debate by saying that change was more a domain of strategic choice than anything else, to which Hannan and Freeman (1977) added half-a-decade later the concept of population ecology. New paradigms began to be weaved around organizational change. It was Child (1972) and Hannan and Freeman (1977) who triggered widespread discussions on the debate followed by numerous assumptions stating difficulty or ease of organizational change and the impact it has had on an organization (Hannan and Freeman, 1984; Tushman and Romanelli, 1985; Zammuto and Cameron, 1985). Several strategic choice theorists and population ecologists put forth diametrically opposing views on organizational change until as far as 1993 (Amburgey et al., 1993; Haveman, 1992, 1993a, 1993b). A little earlier than this, organizational change began to be seen on the front of choice versus determinism, which was termed as 'too simple' by Whittington (1988). Over the years change began to be seen more as a strategic choice driven by organizations' willingness to explore and expand further milestones rooted in knowledge-based resources. Cohen et al., (1996) has stated that change has got a lot to do with the management of these knowledge-based resources, which have a deep-rooted relationship with competitive advantage (Mahoney, 1995). Barney (1986b), Boeker (1997), Nelson and Winter (1982) have, thus, argued that organizational change is a step towards modifying an organization's existing resources to compete in a better and an efficient manner in a competitive world. The requirement of change Bolman & Deal (1991) have stated that when organizations reach a point when they realize it is important to embrace change to prosper in an uncertain, volatile, ambiguous and complex environment, they also realize that it is time to have a change. Forces in the organization's environment, both internal and external, have a profound impact on how change overwhelms the organization or how fast or slow it is able to bring about a dynamic transformation. Organizations are awash with internal and external environment. But effective organizations have this knack for understanding when either of the environments signals that an organizational change is needed. When internal changes are made in organizations so that external environment is accommodated, it is called a reactive change; but when the change is strategic and gels largely well with external environment, the change is proactive. Ideal organizations balance reactive approach with proactive approach. It is the environment from which the impetus for change comes. Effective leaders possess thorough knowledge of the fact that change is and must be a continuous process. The environments are ever-changing and organizational change is a reaction to the same. It is not a mere change that brings about an adjustment, it is a total realignment and organizations need to be equipped with suitable capabilities to execute this realignment. This is a tryst with becoming an organization that is ideal, that is unlike its past and that is geared to receiving newer inputs, ideas and aspirations. Haveman, Russo & Meyer (2001) have linked it to the transfer of executive power. Van de Ven and Poole (1995) have looked at it from the perspective of three theories: life-cycle theory, teleological theory, and dialectical theory. The first one is its attempt at understanding its life-cycle of birth, followed by growth, then maturation and finally declination. The second one is its attempt at reaching to a state that is ideal. And the third one is rooted in its multi-cultural background. If one of these dominates the other, a new goal and value is established; the newness is the change. Yang, Zhuo & Yu (2009) have remarked that each organizational change looks at targeting its strategy, vision, culture, system, structure, leadership style, and production technology. Vision gets adapted to the external environment. The long-term goal of the organization forms its strategy, and culture is its members' collective set of norms, values and basic assumptions. All these are altered by the change while leadership stays as an influential force. Each target in an organizational change affects the other. There are numerous choices through which an organization responds to change and it is normally managers' prerogative which choice to stick to and which to discard. Normally it is either revolutionary change or evolutionary change that is opted for. George & Jones (2007) have remarked that evolutionary change is intermittent, gradual and narrowly-focused and its main intent is to bring about a continuous improvement in the organization. On the other hand, if the change is dramatic, rapid and broadly-focused, it falls into the revolutionary category. Companies that are reported to undergone such change can be considered as lacking any more drive in their current operation method, which has ceased to fulfil their demand with respect to the external environment. Big organizations normally undergo the evolutionary change which adheres to socio-technical systems theory, management of objectives and total quality management (George & Jones, 2002; Yang, Zhou & Yu, 2009). George & Jones (2002) have outlined three types under which revolutionary change is executed. These are restructuring, reengineering, and innovation. The first one pertains to the radical design and fundamental thinking of business processes so as to achieve dramatic improvement in contemporary and critical performance measures such as quality, cost, speed and service (Hammer & Champy, 1993). Organizations normally think of restructuring when they are faced with deterioration of their services or portfolio. Restructuring could mean elimination of departments and divisions, levels of hierarchy, reducing operational costs or even downsizing. It could be a step forward in bringing innovation in the work methodology so that organization can align better with state-of-the-art methods of conducting business. The process of organizational change is not easy though and it offers challenge to the managers who are often faced with the dilemma of how and when to execute it. This is true for both revolutionary and evolutionary change. Lewin has proposed a process divided into three steps to bring about an organizational change, which begins with unfreezing, then moving and finally freezing (George & Jones, 2002). Unfreezing is the first stage in which key members from the organization realize that a crisis is existing in their organization and something must motivate the change. However, the information to substantiate that everything is not ideal at the moment for the organization should be highly credible and that it, in some or the other way, is related to the organization’s goal. If it does and it is felt something is amiss, it is time for a change to be brought in. Schein (1992) has stated that members must have an anxious feeling about organization not doing so well and the possible change could provide respite. When the idea of the possible change is decided upon, it taken forward by the next step of the process which is 'moving'. This is the most complicated part of the change since it involves goal-setting, resource funding, support seeking, planning and execution. Moving has been categorized into two forms: vision-orientation and problem-solving. It is enough for an organization to adapt to one of these two. When the process has been 'moved', freezing begins, which is meant to stabilize the change. Each department or an individual in an organization has its own inertial way of doing and thinking so that the change that is in the 'moving' state is frozen in a way that maintains the status quo. While the change is implemented the restraining force must be weaker than the driving force. If it is on the contrary, the direction of change will be counterproductive and it would move in a reverse direction or the organization will continue to stay where it was. If the forces are equal to each other, the organization will, again, be stable temporarily. Three levels govern restraining forces, which are organization level, individual level and secondary unit level (Yang, Zhuo & Yu, 2009). At the organizational level it is pressures from the past, organizational structural inertia, organizational culture and system pressure that can impede with the process of change. Factors at individual level include lack of trust, misunderstanding, and uncertainty. Recent change at Procter & Gamble On June 5, 2013, Procter & Gamble announced organizational changes that became a talking point in the history of corporate world. It is because the company organized its global business units into industry-based sectors. This was a major and a huge strategic change. The change gave the company a new orientation and four industry-based units came into existence as part of its global plans to improve, reorient and expand its business and reach. These changes support the current growth strategies on the company to strengthen its developed markets, maintain the momentum in these markets, build an innovation pipeline that is strong and improve its productivity (P&G Corporate Newsroom, 2013). At the point of announcing change, its Chief Executive Officer, president and chairman of the board, A.G. Laffey remarked: “These changes build on the productivity and organization design work led by Bob McDonald, and will help us get closer to consumers and become more agile with customers.” Procter & Gamble have a worldwide presence and reputation of serving 4.6 billion population with its brands known for their equity, quality and trust like Pampers, Tide, Always, Ariel, Pantene, Whisper, Mach3, Dawn, Bounty, Fairy, Charmin, Gain, Downy, Iams, Lenor, Crest, Duracell, Oral-B, Olay, Wella, Head & Shoulders, Gillette, Fusion, Braun, Ace, Ambi Pur, Febreze, SK-II, and Vicks. The company sells these products in around 75 countries worldwide. The company has created the new sector groups focusing on the common consumer benefits and each group has a group president of its won. The groups are Feminine and Family Care, Global Beauty, Global Health and Grooming, and Global fabric and Home Care. The group presidents for each are Martin Rant, Deborah A, David S. Taylor and Giovanni Ciseranii respectively. In a very strategic move each sector has been allotted a portfolio to take care of. Feminine and Family Care contains baby Care, Feminine Care, and Family Care. Global Beauty segment contains Retail Hair Care and Color, Beauty Care, Prestige and Salon Professional. Similarly Global Home Care has under its belt Oral Care, Shave Care, Braun, Pet Care, and Health care. And Global Fabric and Home Care manages Fabric Care, Power, and Home Care. All the group president report to the chairman directly. As the change at Procter & Gamble became the buzzword in corporate history, some analysts believed, albeit in a sarcastic way, that the change was the company's own way of saying here is the end of marketing. This is because the change rendered hundreds of associate marketing directors and marketing directors assume the official role of Procter & Gamble brand ambassadors. This is what the company's re-design has actually done to them as the company with single-point responsibility for plans, strategies and results for brands became an emblem of 'brand management'. Even as it eliminated marketing from the organization and even its title, it didn't in reality mean that it had spelled a practical end to it - it had simply reorganized it and redefined it. Under the new definition directors were expected to see the organization in a broader perspective; the one they are part of now. These four segments, which have been carved out of its huge international network, now represent a brand and it is this brand Procter & Gamble is supposed to manage now through communications, consumer and marketing knowledge, design and visual identity. This 'brand management' concept has been developed such that it pervades through all levels of the organization and at each of its location, which includes regional units that have been reconfigured. The change envisions that this brand-building concept will help it focus on providing better services and products to its customers through roles that are clear, responsibilities that are well-defined and decisions that are faster. Previously the company was used to marketing directors, now it will be used to brand builders. It is sort of a “design thinking”. Discussion of the change With such a background the company expect to crack some of the hardest and weirdest business problems. It is attempting to change its culture and create leadership that is listening, deploying and even learning by solving vexing problems through its cross-functional teams. Business analysts say that the company has set a new trend of visualizing, prototyping and iteration so that it can facilitate its internal and external communication effectively. Cindy Tripp, who is marketing director at P&G Global Design, remarks: "It has been transformative for our leadership teams," These changes are a step forward for the company to support its strategies that it has envisioned towards growth, greater market development, building of an innovation pipeline that is strong and maintaining momentum. The company is expected to operate more efficiently and effectively, and can be seen an extension of organization design that was previously made by Bob McDonald. It is expected that these changes will bring the company even more closer to its customers, make it more agile and consumer-friendly. The company now operates with consistent and clear sets of values through its marketing directors-turned brand ambassadors. They are the ones who would be the face of its brands selling in more than 180 companies and workforces hailing from 145 nationalities. The company, by virtue of this change, has not only reorganized itself, but has also taken a smart step towards people development, beginning from these directors. It has shown a new way at leadership development by giving a new thought on leading and managing its business. The company has conveyed it to the lowest level in its hierarchy that leadership development can neither be a program nor an event, it is an ongoing process that if articulated well can go a long way in building brands and people alike (Hay Group, nd). The new matrix structure is expected to demonstrate its unique ability to collaborate on shared goals and vision and provide motivation to scale new highs. The making of four new segments is expected to offer a variety of experiences for people either working with the company or associated with it. Management of this change as a leader Change, whether small or big, is capable of creating as many challenges as silver lines. Adaptation to change is not always a bed of roses; difficulties do arse. How well does a change go with an organization is also largely dependent on how well it goes with its leaders. It needs a great deal of agility to adapt to change. If I have to manage this change, I would need to be a strong leader in the first place, I would need to have a great deal of agility to adapt to it, and I would need to have a clear vision to assimilate it. I must be able to know that in order to accept a change and transform the challenge into an opportunity; I should have a drive that would propel it towards a renewal process. Conner (1993) has said that a change is accompanied by five steps of denial, anger, bargaining, depression and acceptance. As a leader I would have to bear in mind that the last one of acceptance must be the first one to embrace. Nadler and Nadler (1998) have stated that leaders have an important role to play in taking change to its conclusive vision. Even as all people are expected to participate in the change, it s mainly the leaders that can roll it out for the rest. Leaders are the "champions of change". As a leader I would need to provide direction, orientation, protection, norms, and structure and conflict control methods for the change to take place, both within and outside of me. It would take a lot of disciplined action on my part to manage it, while keeping my eyes open to locate any distress signs emanating from elsewhere, which might need equal and important attention from me as a leader. As a leader I would need to set context for the implementation of the change that has been already worked out and should create a conducive atmosphere to adapt to its pervasiveness. I will be responsible for envisioning, energizing and enabling the further consequence of this change and for rallying support I have to be a transformational leader and a very motivating one for managing the change effectively and permeating it to workforces that I am engaged with. I would need to have a vision to lead so as to make the change appear relevant, have a strong perspective, and be able to a sustained organizational process of learning. Conclusion When an organization reaches a tipping point in terms of its services or functioning, normally a change ensues. Organizational change has been discussed in several contexts by different scholars during the last 6 decades or so. Change brings with it a number of challenges too, which are particularly overwhelming at the top of the ladder. This paper discusses one such change that happened at Procter & Gamble a year ago and how it impacted the organizations thereafter. References Amburgey, T. L., Kelly, D. and Barnett, W. P. 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(Eds), Research in Organizational Behavior, 7. Greenwich, CT: JAI Press. Read More