Changes in an Organization Improve Effectiveness and Efficiency - Coursework Example

Leadership and Change Introduction Change is an unavoidable activity and phenomena. Numerous organizations have no other way but to follow the dictations of change. Sometimes these changes cannot be acceptable for various reasons but the organizations do not have other choice. Change can be internal and it can be external. The internal change is mostly carried out by organizations themselves with an aim or introducing and implementing favourable impacts to aggregate business functions and operations as well. The ultimate objectives of change normally remain to either to bring effectiveness or to implant efficiency in the business practices performed by employees of the organization. The basic advantage of the internal change is that it can be avoided, can be postponed and can be further amended to bring a choice based condition into change activity. And there is strong evidence suggesting that the organizations prefer to use and incorporate internal changes instead of implementing change dictated by the external forces. The external change cannot be a voluntary act. The organizations do not have choice whether to implement it or avoid it. The external change cannot be avoided. The management of organizations is bound to implement conditions required by the external change. The effects of the external change may not be welcomed by the organizations. The fundamental problem with the external change is that its developers do not have direct relationship with senior management of the organizations but they are normally developed and enforced by the regulatory authorities who have their objectives to be served by implementing the change requirements. As a result, the organizations do not wholeheartedly accept the impacts of the external change. And most of the time, they intend and prefer to resist the external change whenever they receive any opportunity to do so. In the subsequent parts of this paper, first change and its different aspects and the responses of the agency have been discussed Subsequent to that, the type of change is accounted for. In which type of change provided has been included. It is followed by the part elaborating the impacts of the change on the business operations. Before the conclusion, Kottler’s 8-step change model has been used on the organization and on the role of directors in handling and managing the needs of change required by the legislation. Change in the organization Change is essential to organizational survival (Van de Ven 1986). More clearly, change through the pursuit of new strategies becomes a highly significant component for organizational survival. All too often, however, organizations fail to remain adaptive to exogenous shifts in their environment (Christensen and Bowers 1996; Kotter 1996). The expansive literature highlights the factors favouring organizational stability and resistance to change (Nelson and Winter 1982; Tolbert and Zucker 1983; Hannan and Freeman 1984). Even when top management recognize the need to change, publicly declare new strategic initiative, change or modify incentives and divert significant resources to develop supportive organizational structures the persistence of existing older norms persistently impede organizational transformation. However, the challenge of change is even more daunting for organization working in highly institutionalized framework with strong traditions along with well-established norms of behaviour (DiMaggio and Powell 1983; Kaartz and Moore 2002). Despite such circumstances, the organizations do survive and continue doing business. Understanding the differential capability of organizations to change has become a central point (Bercovitz and Feldman 2008). And recent research denote that understanding variation in organizational response to external pressure requires inspecting and examining intra-organizational dynamics and the actions of individuals in that context as well (Greenwood and Hinings 1996). Type of change New technology has necessitated a real estate agency to introduce and implement computer based business transactions. The real estate agency was not using the computers and other electrical devices and most of the business was carried out manually. Previously, the managers and directors were estimating business costs and buinsess operations manually. The biggest drawback was that the managers and directors were unable to understand business growth or decrease over a period of time. Due to improper documentation and more paper work, the manager and directors were not able to ascertain business performance and business position of the agency. However, they have now decided to implement computers and all the transactions will be recorded and maintained through the use of computers. Both internal and external factors have necessitated adopting the technological way to record business transactions. Externally, the competitors are using the modern and latest technological means to conduct business operations. They are using Microsoft Excel, Power Point and other applications to carry out their business operations. They use projectors to give presentation to their clients. These are the basic external changes putting substantial pressure on the senior management of the agency to introduce the technology. In addition to that, the internal requirements have also been pushing the agency to impart computers and other electronic devices to improve the quality of business operations. The type of change is adaption. The agency is not re-creating or re-orienting its business operations but adapting itself with the changing requirements of internal and external business circumstances. The rapidly changing new technology and its faster acceptance and adaption by the competitors have left no room for the agency but to follow the trend. Its effects The technology is not a cost-free activity. The agency will not only benefit from the installation of computers but also it needs to pay additional costs. The effects of change will bring accurate and reliable business picture along with improved business effectiveness and efficiency. However, additional costs such as installation, maintenance of computers along with training costs are going to be part of this change. Improved effectiveness and efficiency The use of computers enables the agency to avail business effectiveness and efficiency as well. The business effectiveness is achieved when cost and benefits are compared and costs do not exceed the level of benefits. In the real estate business, the major costs only pertain to payroll and running and maintenance of office expenses. The use of Microsoft Excel will enable the management to take into account the costs incurred on the staff members and level of revenues earned by them. This will enable the agency to comprehend expensive and cost effective labour force and take appropriate decisions pertaining to that. Accurate and reliable business picture The computerised balance sheet and income statement will enable agency to appropriately understand the current and potential business picture. The computerised balance sheet and income statement will facilitate directors to measure annual profit and loss figures and aggregate revenue earned during a period and total expenses incurred on business operations. This will also enable the directors to take into account current and long term liabilities, current and fixed assets as well. In addition to that, by comparing the previous years’ financial position and financial performance of the agency, the directors will be able to know their growth or decline level over a period of time. Increased business growth chances The use of computers with the Internet will increase agency marketing into the virtual world. Technology has invalidated the physical boundaries. The Internet has made it possible to reach out hundreds of thousands potential clients through the use of electronic marketing. Undoubtedly, increased marketing will bring more clients that will directly bring more revenue for the agency. Enhanced installation cost The installation of computers and other electronic accessories will consume a considerable sum of money. By installing computers, the agency will need to incur additional amount of money for the maintenance of these systems. In addition to that, the agency will be required to regularly update and upgrade the computer systems. If the agency is unable to maintain the computers, it will not be able to avail the expected benefits from using technology for the business operations. Training costs Computers cannot be operated without technical support. The technical support includes training of the existing employees so that they become appropriately capable to operate and maintain professional computer competency. There is no doubt that training of managers will require agency to incur additional expenses. In addition to that, agency may be required to install software for more efficient business running. There are numerous softwares such as Enterprise Resource Planning (ERP) and SAP are normally employed by the organizations. Moreover, the cost of maintaining computers cannot be limited to a particular extent as technology is keep on changing and everyday a new software or program is introduced. This clearly highlights that the agency need to be prepared for supplementary cost pertaining to upgrading the computer software. Evaluation of the leader’s-director- role The directors have become very supportive. Being a small real estate agency, the directors understand that the agency survival and growth is considerably relying on the adaption to the technology-based environment in the agency. They fully understand that if they do not implement such changes, they would find it hard to continue doing business in the real estate industry. In the subsequent parts of section, Kottlers’ 8-step change model has been applied to the change adopted by the agency. This model has gained recognition in many circles of today’s organization as it is comprised of those elements that are the routine aspects normally encountered by the various organizations. These factors clearly highlight the impacts, response, support and resistance provided by staff members towards the change and its ramifications for different business structures. Develop a sense of urgency around for change? The directors are considerably optimistic about the prospects of change. The directors have called on three meetings with the managers of the agency. And they have briefed the managers about the benefits and aggregate functions and effects of these changes on the business operations. Subsequent to that, the directors have asked the mangers to provide their feedback about the changes so that they should take them into account and develop an aggregate policy and steps necessary to install and operate computer systems. It looks that the directors have tried to be transactional leaders who always closely work with the subordinates and take into account their view points and work collectively. The major advantage of transactional leadership is to create friendly and accommodating business environment supporting every staff member. Form a powerful coalition by convincing people that change s necessary? The biggest trait of transactional leadership is to collect its followers on a single platform. In the real estate agency, the directors fully realise that if the staff members resist the change, they would not be able to entertain the expected objectives and all efforts would become useless. By keeping this view in mind, the directors have tried to convince the staff members to actively participate in this change and provide their contribution to make this challenge a success story. In this regard, the directors have particularly focused on the role and support of the managers as they are the key component of their business structure. Their support and active contribution for this change is unavoidable. Build a vision that people can grasp easily and remember? Vision is a significant currency for attracting support for change (Cohen and Bradford 2005). Developing a clear vision along with change has been the most challenging aspect for entertaining organizational objectives. The directors have tried to use a durable vision for the change. However, their vision development strategy is less clear as some of mangers question about the consistency of the new change; the managers contend that the agency faces the issue of insufficient funds to ensure persistent continuity of the change. Although the mangers have these doubts in mind, yet they are optimistic about the role and active participation of the directors who look keen on the successful implementation of the change in the agency. Communicate the change effectively? The lack of effective communication is the single greatest problem in most relationships (Scott 2004). It is the absence of effective communication that creates more challenges that they really exist. The directors have not been aggressive but accommodating and well-mannered. They have shown less formal communication strategy to entertain the achievement of the desired goals and objectives. However, some of the managers complain about formal communication adopted by the directors. But they subsequently provide that aggregately the directors have considerably modified their role and communication strategy suitable for entertaining the change objectives. Remove obstacles- processes or structures that are in the way? The directors have offered their total support to managers and other staff members. They have informed the staff members that they can meet with them anytime they want to. By meeting with the managers and other staff members, the directors have provided their support to remove obstacles that may hamper the change process on the structure of the business. Create quick wins and a taste of victory early in the change process Concerning quick wins, the directors have also put in place incentives such as performance bonus and salary increment. The directors have announced that they will extend other incentives as well depending on the performance of the staff members. Build on the change as real change runs deep? No steps are taken for this step by the agency directors. Anchor the change in corporate culture by making it part of the core of your organization? Till this point of time, the directors have only focused to entertain the change related objectives. They have not developed any policy or procedure in corporate culture of the agency that impart the change as the core part of the organizations. This highlights that they have only developed a short run strategy fulfilling their change related objectives. As the agency is small and does not have much turnover, the directors have extended less concentration on this aspect. Conclusion Change is unavoidable reality and technology has made it permanent part of today’s corporate structure. The small real estate agency finds no other way except to impart computer based business operations. The change is demanded by both internal and external factors. Externally, the competitors are using technology to impart effectiveness and efficiency in their business operations. Internally, the agency was unable to comprehend business growth or decrease over a period of time. Due to manual documentation and improper placement of the documents, the directors were unable to ascertain the business position and business performance of the agency. The major advantages of introducing computers include increased effectiveness and efficiency in business operations; the directors would be able to touch a wide range of customers via the Internet. However, this would also increase business cost as the installation and maintenance of computers require a considerable amount of money. And the managers also require training sessions to upgrade their computer related skills. The directors have adopted friendly and accommodating style toward the staff members. As they are the one who are mostly enthusiastic about the change, the staff members have also been supportive as well. They have arranged meetings with the staff members and have encouraged them to accept the change. The directors have also asked the managers to provide their feedback as it would enable them to take into account their recommendations. References Bercovitz,J & Feldman, M 2008, ‘Academic Entrepreneurs: Organizational Change at the Individual Level’, Organization Science, Vol. 19 (1), 69-89. Christensen, C M, Bowers, JL 1996, Customer power, strategic investment and the failure of leading firms, Journal of Strategic Management, 17 197–219. Cohen, AR & Bradford, DL 2005, Influence without Authority, John Wiley & Sons, New Jersey DiMaggio, P, Powell, W 1983, the iron cage revisited: Institutional isomorphism and collective rationality in organizational fields, American Sociological Review, 48(2) 147–160 Greenwood, R, Hinings, CR 1996, Understanding radical organizational change: Bringing together the old and the new institutionalism, Academy of Management Journal, 21(4) 1022–1054. 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