Four Ways for the Management of Change - Essay Example

?Article The Management of Change: Four (4) Ways Introduction The impact of globalization is being felt by almost all business organizations.Competitiveness was threatened by the availability of lower cost factors of production in other countries and by the provision of technologies in locations where the output will be less expensive yet with high quality. Organizations had to change, oftentimes reducing manpower where their presence have become redundant and no longer economical, partly due to advancements in technology and partly because there is lower cost of performing functions through the management of manpower elsewhere. Although globalization started decades ago, more recent developments have included changes in the economic policies of many countries resulting in more free flow of labour, capital, goods, services, and even some technologies. Information Communication Technology (ICT) development has changed the way business operates. And emerging economies have low labour cost to offer, attracting corporations to modify business organization for the purpose of becoming more competitive with lower cost of manpower. These are all based on the report by the Department of Business Emergence and Regulatory Reforms (BERR, 2008). Customer services, for example, which can be rendered by phone or internet access will cost less if outsourced. In order for enterprises to survive the changes, Pearson, G. and Woodman, P. (2011) clarified the forecast in 2011 as to the impact on UK managers. It was estimated that almost half of all UK managers will be redundant. 1/3 was feeling insecure about their jobs. Change managers have become in demand. But the problem is that good managers are not necessarily effective change managers. New strategies must be learned. Many people must be convinced to voluntarily adapt to forthcoming changes and be prepared for scenarios requiring willingness to change and to learn new ways of getting things done in various parts of the organization. 2. Multiple Alternative Approaches to Change Management Four possible approaches have been identified in managing change: (1) Behavioural Approach, (2) Cognitive Approach, (3) Psychodynamic Approach, and (4) Humanistic Psychology Approach. And each one can be applied in combination with the others. Figure 2 shows how this theory in a diagram created by Cameron, E. and Green, M. (2009, p.14) will look like . Tables and Figures were added after the references to provide a top view presentation of the important elements, and to show the complex implications of change. However, not all can be discussed thoroughly in this article due to constraints. 2.1 Behavioural Approach In the management of change, Douglas McGregor and Joel Cutcher-Gershenfeld (1960) introduced their Theory X and Theory Y underlying assumptions about manpower and management. Table A shows the differences between Theory X and Theory Y. Table A – Theory X and Theory Y Assumptions Theory X assumes… People dislike work. They need controlling and direction. They require security. They are motivated by threats of punishment. They avoid taking responsibility. They lack ambition. They do not use their imagination Theory Y assumes… People regard work as natural and normal. They respond to more than just control or coercion, e.g. recognition and encouragement. They commit to the organization’s objectives in line with rewards offered. They seek some inner fulfilment from work. Given the right environment, people willingly accept responsibility and accountability. People can be creative and innovative. (Source: McGregor, D. and GErshenfeld, J.C.,1960) (Table copied from Cameron, E. and Green, M., 2009. Making Sense of Change Management: A Complete Guide to the Models , tools, & Techniques of Organizational Change, 2nd Edition. London & Philadelphia: Kogan Page Ltd., p. 23) In general, what Theory X means is that employees have to be motivated to work, to be directed and controlled, and even to use their imagination. If there is no motivation usually in the form of potential punishments for not doing what should be done, they will avoid work. They work only because they are forced to work. Theory Y, on the other hand, argues that people want to work and are very willing to do their best for the company they are working with provided they are given the right environment. Given freedom at work, they can better express their creativity. Another theory is concerned about the normal human behaviour of avoiding pain or hardships and a desire for knowledge and further development. Frederick Herzberg called it the Herzberg’s Motivating Factors. Table B gives more details about motivating factors that tend to eliminate pain and what are the motivating factors normally wanted by employees. He called the left list of motivating factors the Hygiene Factors, while the right side list was called Motivators. Table B – Herzberg’s Motivating Factors Hygiene Factors Pay Company Policy Quality of Supervision / Management Working Relations Working Conditions Status Security Motivators Achievement Recognition Responsibility Advancement Learning Type and nature of work (Source: Frederick Herzberg, 1968) (Table copied from Cameron, E. and Green, M., 2009. Making Sense of Change Management: A Complete Guide to the Models , tools, & Techniques of Organizational Change, 2nd Edition. London & Philadelphia: Kogan Page Ltd., p. 24) Theory X and Theory Y or the McGregor’s Theories, and the Herzberg’s Motivating Factors fall under the Behavioural Approach to managing change. 2.2 Cognitive Approach to Managing Change But using behaviour as the basis will obviously disregard other realities about the rational human being. People learn. People have the capacity to analyze a situation even before they behave the way they choose to behave. In the management of change, it is possible to appeal to these faculties of the mind in order to derive some desired results. This logic is the foundation of another theory known as the Cognitive Theory. Good communications and meeting of minds can influence employees to adjust their emotions, face problems, and then voluntarily change with successful results. It was primarily Aaron Beck who worked on the Cognitive Therapy in 1970. Still another part of the Cognitive Approach to managing change is by giving importance to the Belief System Theory brought forward by Rokeach in the 1960 to 1970’s. Individuals have their own identity of who he or she is and what corresponding values drive the attitude, behaviour, emotions, and feelings. Therefore setting goals plays a role in the management of change. Goals appealing well to the perception of individuals about the self as well as to the values that support beliefs should make it easier for the organization to adjust to changes. People will know it is for their own advantage. 2.3 Psychodynamic Approach to Manage Change Every person undergoes adjustments in self-esteem during the time that changes must take place. It was Kubler-Ross who discovered in 1969, the process wherein an individual will first experience denial and anger during the early stages of change, before he bargains then goes through a depression until such time that changes are accepted. And the person changing realizes acceptance which elevates his self-esteem. Cameron, E and Green, M. (2009, p. 34) reproduced the chart based on the discovery of Kubler-Ross. Figure 3 shows such a chart showing the effects of change on self-esteem as time passes and the person involved has to adjust. In 1976, Adams, Hayes, and Hopson added shock as the first impact on self-esteem when change is required of an individual. Then after the acceptance stage, they observed the individual to go through the process of experimentation, discovery of how they will adjust, and integration of changes into the normal pattern. Virginia Satir further modified the chart in 1991 to show what happens to performance, in general, from the old status quo to the new status quo. She summarized all the inconvenient effects of change into the term “chaos” until changes are integrated and a new status quo is realized. 2.4 Humanistic Psychology Approach to Manage Change The focus of humanistic approach includes awareness of events by the individual, a free choice to become responsible for the response to changes, and an understanding about the entire human being involved within a situation and environment. It has similarities with and differences from the other three approaches. Table C shows in which aspects Humanistic Psychology Approach will be similar or different. Table C – Comparison of Individual Change Approaches (Source: Cameron, E. and Green, M., 2009. Making Sense of Change Management: A Complete Guide to the Models , Tools, & Techniques of Organizational Change, 2nd Edition. London & Philadelphia: Kogan Page Ltd.,p.41) Article # 2 – The Management of Change: Leadership Davey, P. (2011) identified lack of leadership skills in the different management levels can be the biggest barrier to successful implementation of changes. Most people resist change. Research findings point to normal “psychological reaction to change that follows a typical pattern: shock, denial, demotivation, letting go, experimenting, and high performance”. During the period when changes have to be implemented, stress among employees can be expected. Awareness of the cycle will enable managers to understand the people they manage and will find effective ways to reducing the resistance, as well as effectively communicate those ideas for swift and successful implementation of changes. Davis, P (2011) recommended eight (8) ways to improve leadership in the implementation of changes, namely, (1) Point out the urgency and implications why the business has to change. (2) Have the influential characters quickly learn and adapt to the changes in order that they may be influential to the rest of the group that needs to change. (3) Clarify the vision of the company in connection with the needed changes and the corresponding strategies to realize that vision. Such a vision should be desirable, feasible, imaginable, flexible yet focused, and can be communicated. (4) Effectively communicate those visions, objectives, and corresponding strategies. (5) Give employees who have willingly and successfully adapted to change some power to influence others to change. If all have not yet changed, allow employees to participate in finding fast and simple ways to adapt to changes. (6) Recognize successful attempts to change and use them as models. (7) Make people aware of the progress towards the envisioned set of changes, so as to encourage manpower to keep up with the momentum of change. (8) Give importance to the changes and make them a part of the culture within the organization. In the 4th recommendation, the theory that people engaged in the processing of knowledge and information will perform better if they are given some independence to implement on their own whatever needs to be done, was tried. And it worked. Hull, C. (2010) mentioned that books cited “Google, Whole Foods, W.L. Gore as success stories” wherein the theory was applied. In response to that observation by Hull, Dr. Paul Thomas confirmed that the theory can and will work in many other organizations. The 3rd recommendation was also affirmed by Dr. Paul Thomas in his tips to successful change management. Identified values should be made known, communicated effectively, and utilized as guide. Dr. Paul added the issue of training employees to unlearn old ways and have them replaced by new ways. At the back of all these strategies, objectives, and vision is the critical consideration of profitability and feasibility of business operations. Without successful changes in the entire organization for the purpose of maintaining competitiveness within the industry, an entire business can retrench and even close until it is able to successfully change its ways. Cameron, E. and Green, M. (2009. p.182) cited four scenarios of change wherein these theories may be applied. These are: (1) structural change, (2) mergers and acquisitions, (3) cultural change, and (4) IT-processed change. All these have actually been taking place in recent years in response to the impact of globalization. Whichever scenario takes place, it would have to undergo a corresponding Strategic Change Process. It covers many activities considering the analysis of external and internal variables of business and the systematic changes involving the organization, mission, vision, values, culture, plans, experiences with change initiatives, and the resulting critical mass required for a successful change. All the complexities requiring analytical work simply point out that in order to arrive at successful change, every part and process within the organization would have to be adjusted so that they will be responsive to the business environment. And the enterprise will remain feasible, capable of maximizing profits from the short to long term, and eventually become established and stable. Reflections on Approaches to the Management of Change Using the Kolb Learning Model A.Kolb Learning Cycle 1: Experience and Learn I finally joined my team members in an emergency meeting after each one was notified about the press release entitled Long-term UK Unemployment on Rise which appeared online at The Guardian, April 18, 2012. The organization wherein we belong has been struggling since the time of the economic recession in 2009 up to the present. Like most other enterprises in the UK, management has been worried by the high unemployment rate within the country and among the trading partners, including USA. Prior to the recession in 2008, unemployment rate in UK was at 5.6%. It soared to 7.5% in 2009, and even increased to 7.85% in 2010. Statistics came from the UK Office for National Statistics (ONS). By February 2012, the unemployment rate had reached 8.3%. All members of the team believed this was alarming. Our company was one of those reported in that press release. Hundreds of people will be laid off. But this has been just a plan until now. Our 2011 financial reports showed that revenue decline in 2011 and profits barely increased. One of our company’s values is to remain as the industry’s market leader, measured in terms of annual growth in profits. Thus, top management is pondering on various cost reduction options, including manpower lay-off in 2012 although our other vision is to value our manpower. As one of the lead managers, I traced the reason to the recent 2011 employee survey results which scored 4% lower than the positive response last year. B. Kolb Learning Cycle 2: Reflect on Experience. Make Generalizations. Formulate Concepts. I gave all team members enough time to think about why the positive feedback of customers declined in 2011. Today, we will be brainstorming to come out with all the possible reasons. We valued people, rewarded good work, treated individuals with impartiality, encouraged all to freely maximize potentials. What went wrong? The company even invested in manpower training and development in 2011 by introducing a website for employees to upgrade their knowledge with e-learning courses at no cost. Over 1,000 members tapped this opportunity for themselves. However, I noticed that there are 6,500 employees, which means the majority did not take their own initiative to become better. Can this be a reason? What if those studying further were the people who degraded the quality of services in order to find time to participate in the e-learning courses? I could not be sure whether or not the e-learning course was one of the reasons for decline in consumer satisfaction. The company wants to retain the best people. Who could they be if the e-learning participation might not be a good basis for accurate determination of the better employees? It appears that top management has applied a Behavioral Approach involving Theory X. There seems to be the assumption that people will work harder to achieve improvements in the survey results on customer satisfaction if they are threatened with perhaps early retirement or simply retrenchment. Theory Y did not work last year as proven by many rewards actually given and facilitations for growth in higher knowledge. Yet we have this 4% drop in customer satisfaction. Top management also tried the Cognitive Approach by considering that the manpower can be given freedom to improve and change on their own as they are kept aware of the strategies for the year. C. Kolb Learning Cycle 3: Test Knowledge on New Situations I will be trying the Psychoanalytic Approach right after the brainstorming activity. They will feel the shock when I introduce some changes which everyone will have to adapt within a short period of time. A group of auditors will be assigned to identify the actual reasons why customer satisfaction declined. And nobody knows who will be affected. I will communicate to them the implication of the management plan to reduce the manpower. At the moment, we do not know what will be the results of a 2012 Customer Satisfaction Survey, how our sales will grow or not grow, and whether or not profits will increase, decline, or remain stagnant. However, I will tell them ahead of time that the top management will have no choice but to require changes and hold its manpower accountable for success or failure. Everyone may anticipate the consequences. This situation will also mean that I would have to implement the Humanistic Approach as well, by considering the worse case scenario. People need their jobs. What if some will have to go and lose their bread and butter? I have to talk to them individually and in private so that we can arrive at a common understanding in the worse case scenario. D. Kolb Learning Cycle 4: Plan to Manage Change Linking Theory, Experience, and Actions This current dilemma could have been avoided if my strategy was one step ahead. Risk of realizing loss of manpower has become high because I did not maintain a file of individual observations and trials with change management as it affected specific individuals. I have learned that different approaches might be necessary depending on who will be implementing the changes. My practice was to implement a strategy by trial and error approaches in order to find out which one will work for the group as a whole. Unfortunately, an approach good for one person can result in a negative outcome for another. Whatever approach will not work for a specific individual should not be implemented for him or her. Only that one which will work should be applied to the right person. Unfortunately, I did not keep track of individual results although I remember how some of them reacted and performed after one approach was tried. This time, my priority will include recording the impact of every approach I make for the purpose of managing changes in the way people work. It can be done with more due diligence on my part by updating my copy of individual confidential files. References: BERR,2008. Globalization and the Changing Economy. Dept. of Business Emergence and Regulatory Reforms. February 2008. [Online] Available @ . [Accessed 21 April 2012] Cameron, E. and Green, M., 2009. Making Sense of Change Management: A Complete Guide to the Models , Tools, & Techniques of Organizational Change, 2nd Edition. London & Philadelphia: Kogan Page Ltd. Davey, P. 2011. Managing Change. Chartered Management Institute. [Online] Available@ . [Accessed 22 April 2012]  Herzberg, Frederick 1968.. One More Time: How do you Motivate Employees?. Harvard Business Review 46 (1): 53–62. Hull, C., 2010. Motivation: Does the Theory Work in Real Companies? Chartered Management Institute. January 4, 2010. [ Online ] Available @ < http://www.managers.org.uk/forum/senior-managers/motivation-does-theory-work-real-companies > [Accessed 22 April 2012.] McGregor, D. and Gershenfeld, J.C.,1960. The Human Side of Enterprise. McGraw-Hill Professional. Pearson, G. and Woodman, P., 2011. Future Forecast Expectations 2012. Chartered Management Institute. December 2011.[Online] Available @ [Accessed 23 April 2012] Press Association, 2012. Long-term UK Unemployment on Rise: Almost 1 Million People Will Have Been Out of Work for More Than a Year by End of 2012, According to IPPR Research. The Guardian. April 18, 2012. [Online] Available @ [Accessed 24 April 2012] Figure 1 – The Coverage of Change Management Figure 2 – Cameron, E. and Green, M. Multiple Approach to Change Theory. Figure 3 – The Process of Change and Adjustment (Source: Kubler-Ross, 1969 cited by Cameron, E. and Green, M., 2009. Making Sense of Change Management: A Complete Guide to the Models , Tools, & Techniques of Organizational Change, 2nd Edition. London & Philadelphia: Kogan Page Ltd., p.34) Read More