Livecos Case Study - Essay Example

? Liveco’s Case Study Email to Mr. Michako Tako Dear Mr. Michako Tako (CEO), RE: fundamental issues at Liveco Company I am student at University of Westminster and as part of my degree programme, “managing change: a human resource management approach” is part of my study module. The basis for me writing to you is due to particular issues at Liveco regarding merging information management and human resource. This approach is under scrutiny for its impacts to the organization’s effectiveness and efficiency as it was earlier put across by your Human Resource manager, madam Isolda. The strategy by madam Isolda has led to several effects that are felt by departments, human resource and information management. The strategy was deemed a viable change in the organization but led to a completely different scenario. There were complaints from the departments that they were not considered in the merge and their views were not sought. It has been a blame game with the human resource complaining about the information management being so critical and the latter complaining of the former being so much. Both departments complained that they never valued the work or even dint know the work of the other. The aim of merging these two departments was part of the strategic management responsibility of ensuring greater efficiency and effectiveness of the organization. On the contrary, the organization’s employees became less productive even than before. The employees lost their focus since the transition from a deadline meeting team changed to a normal days routine of getting to work at 8.30 and out at 5.30.Liveco has experienced a huge loss of workforce, which has led to employees terminating their employment contracts. The primary reason for the termination given by most of the employees was the unfavorable working conditions at Liveco. These problems have led to the fall in the Liveco organization and a layered strategy as suggested by Madam Isolda should be used to improve the current situation. Sincerely yours, (Insert Name) Table of contents Executive summary 5 Introduction 5 Literature review 6 Methodology 8 Results and findings. 10 Analysis 10 Evaluation………………………………………………………………………………………. 12 Conclusion and Recommendation…….…………………………………………………………………………..13 References 14 1. Executive summary Merging two departments in Liveco Company with the aim of improving the working environment of the employees and the undertakings of the firm was met by a negative attitude, which led to the fall in profitability. Employees did not feel a sense of belonging, satisfaction, and motivation and ended up terminating their employment at Liveco. This report analyses the cause of the effects of the change effected by Isolda, human resource manager, and what she could have done to impose the change in the organization to be met with a positive attitude. This report analyses the different methodologies used to make changes in an organization, both diagnostic where analytical model is used and a control model, and captures where Madam Isolda went wrong. A conclusion on the change at Liveco is made and possible future solutions given in the recommendation to avoid such problems. 2. Introduction Organizations’ change is mostly inevitable and is used to ensure that the organization has a longer life and makes future progress. If it is anticipated, then individuals in the organization can prepare to manage it and still find satisfaction in their work (Armstrong, 2006). On the contrary, if the change is abrupt, accommodating the change might be a task for everyone in the organization and might lead to its failure. A change is a strategy brought in by the Human Resource managers. They should help the other managers and employees cope with the change of dynamics in the organization. If not accepted in the right way, the change can mean the adoption of that strategy has failed, and if still adopted, then it might take with it some casualties (Kanter & Dretlter, 1998). In this case, dissatisfaction arises among employees of Liveco Company due to the human resource change where the human resource management and the information management are merged. The human resource manager, Isolda, attempt to merge the human resource management and information management was met by resistance by both sides citing a couple of grievances from both sides. In an attempt to solve these issues, the human resource manager should adopt a couple of ideologies to bring back the employees’ confidence and motivate them top adopting the change (Nankervis, et al., 2002, p. 12). On the other hand, the human resource manager can accept the failure of the change, end its adoption, and reverse things as they were, and improve the two units of the organization for effective and efficient working conditions. 3. Literature review Change is a principle or method adopted by an organization in an attempt to bring in a more dynamic system that works better than the previous system (Dawson, 1996, p. 37). In this case, the human resource manger wanted to bring the change which involved the integration of the information management and the human resource. This merge was an attempt to bring together these two departments and ensure they work together for the company’s improvements and success. Unfortunately in adopting a change, as Pettigrew (1987, p.5) indicates, the process of change integration has its advantages and disadvantages. Dawson (1996, p. 6) identifies the stages that the change undergoes before it is effected into a firm. The first is the context of changes, the strategy itself and the way it changes the past and brings out the future. In this case, the transition of having the information management and the human resource in Liveco to an integrated systems where the two are merged is the context of change (Pettigrew, 1987, p. 652). Dawson, (1996, p. 6) identifies the other element as the change substance. This shows the elements or variables that change and to what level the change occurs (the change scale). Levico’s change was experienced in the human resource and information management departments, the two areas affected by the change. The last element is the change politics in the organisation. This involves the aftermath of adoption of a certain change in an organisation and the effects it brings in the organisation (Dawson, 1994, p. 3). They involve both the negative and positive impacts that the change brings. Pettigrew (1987, p. 6) goes on to analyze changes adopted in many organizations. He reveals that change is approached in a manner that it ignores the needs of other people in the organization. In this regard, Isolda did not contact either the human resource employees or the information management in the effecting of the change. Consequently, the two groups complained of lack of consultation. The two groups were always on each other as to who was more superior to the other and did their routines independently. Information management department often deemed itself superior since it was more productive than the human resource department. Change affects the people differently in an organization. There are those that are affected positively and those affected negatively. Gmehlin (2012, p. 1 & 2) indicates four ways in which the e-strategies impact people. There are people who accept the change and are easy in embracing the changes that the organization adopts. Needless to say, they always want to challenge the normalcy in the organization and can live with any change (Gmehlin, 2012, p. 1 & 2). There are those who are completely affected negatively to an extent of having stress by the changes. These are the people who resist change and do not like to change the organizational framework. Liveco exhibited such, where no people conformed to the change leading to the failure of the strategy. There are the cautious people to the effects of change who seek other alternatives when a change occurs in an organization. An example is the account manager who, due to the change, left the company even with the loyalty he had from the company. These people make their objectives carefully regarding their future (Gmehlin, 2012, p. 1 & 2). Lastly, there are the highly innovative people who don’t seem to get bothered by changes. These people look for ways to fit with the new system through innovative ideas that help them improve their working conditions (Gmehlin, 2012, p. 1 & 2). 4. Methodology Change model (six change model) Kotter’s and Schlesinger’s six change approaches to deal with resistance to change can be used at Liveco to either minimize or prevent the resistance to change. There are 4 reasons for resistance to changes according to Kotter and Schlesinger (1979). Some of these are present at Liveco. They include self interest, misunderstanding, change low tolerance due to security of work, and different opinions of the situation. Kotter and Schlesinger bring out the six approaches to change as: education and communication; involvement and all people participation; supportive initiatives and facilitation; agreements and negotiation; manipulation techniques where tactics do not work and; forcing (coercion) either explicitly or implicitly. Diagnostic model The six box model brings out six variables in diagnosis. It was developed by Marvin Weisbord (1976, p. 430-447). Weisbord states that to enhance the organization effectiveness, a balance between all the formal and informal variables in the organization must be maintained. This model can be used to solve the intra-organization problems present in Liveco. It includes the following procedure. Purpose (goals of the change) Structure (functions of the organizational structure) Relationships (among the people and their responsibilities) Rewards (ensuring motivation and hence growth) Leadership (ensuring full participation and balance) Planning, control and budgeting (help mechanisms in the making the change) 5. Results and findings. Liveco tried to merge Information management and human resource, but this did not work due to the lack of communication, which led to the decreased profitability. This, therefore, necessitates the adoption of another change by Madam Isolda. To make the change, Madam Isolda must ensure maximum participation of the organization’s staff in all phases. This calls for the need of diagnostic and change control models (Burnes, 2000, p. 48). 6. Analysis The resistance that the management got from the different employees presented a major problem in the organization. The first issue that emerged from the change was the lack of consultation by Madam Isolda. The information Management and the human resource departments claimed that they were not considered in the merge. According to Kotter and Schlesinger (1979, p. 446), participation and involvement of all people in an organization is paramount in change implementation. Kotter and Schlesinger further indicate that involvement of employees in the change leads to the endorsing the change rather than resisting. Participation in the change initiative makes the employees feel valued (Schaubroeck, et al., 1998, pp. 870-872). The change brought several uncomfortable situations that lead to the loss of some of the employees such as the accounts manager, one of the significant employees. According to Dawson (1996, p. 60), change can cause numerous cases of employee related stress. This was present at Liveco where employees were forced to adopt other working conditions that did not enhance their suitability. Kotter and Schlesinger (1979, p. 449) identify coercion as an approach to handling the change, but the more employees at Liveco were forced to work under other work situations, like the working hours, the more they were de-motivated and left the company. Employee productivity was low. This led to the decline in the overall company productivity. Pettigrew (1987, p. 6) identifies loss of focus and low productivity among employees as some of the effects of change. Communication challenges among the different team members of information management and the human resource departments suggested that Liveco did not take the step to enhance communication beforehand. Kotter and schlesinger (1979) identify communication and education as their first approach towards adopting change. This avoids any later communication hitches in employees’ different departments. Dawson (1996, p. 6) identifies the importance of communication in making a change to allow for receptiveness of all the staff. Liveco, therefore, will need to get their employees motivated and satisfied with their working conditions. The six model diagnostic model is ideal for Liveco as Weisbord (1976, p. 430-447) indicates, therefore, the six box model will be ideal for Liveco’s intra-organizational problems. The six box model shows that Liveco, therefore, has to address issues of relationships, rewards, and plan and control as a helpful mechanism to achieve the change and resume the business profitability. Salient relationships will cover the issue of communication and avoid disagreements between departments and employees. In addition, rewards will lead to employee satisfaction and motivation (Pettigrew, 1987, p. 667). 7. Evaluation Liveco’s adoption of the change strategy not only affected the whole firm but also the employees. Evaluations should prove employee satisfaction and the overall organization’s progress by its growth. The motivation levels among the employees decreased affecting the overall performance of the firm (Anon., 1996, p. 58 & 59). To ensure effective merging of the two departments, human resource and Information Management, the human resource manager must first look at the strategic considerations. Singh (2012, p. 3) identifies the need for strategic consideration. The lack of communication led to employee de-motivation to the extent of terminating their employment contracts. According to Singh (2012, p. 3), the strategic considerations help identify whether the change is viable or not. Madam Isolda should first assess whether the 2 departments are compatible for a change and as part of the strategic consideration, communicate to the employees the change that she wants to effect. As to the compatibility of the information management and the human resource, the differences in their working hours proved that the two had different cultures. This should be dealt with through effective communication to allow employee satisfaction hence satisfying the first stage of Kotter’s and Schlesinger’s Six Change Approach. This will in turn have a higher return on the employees and an overall good business performance. Participation and consideration in the change is fundamental to the Information Management and the human resource employees in order to avoid a feeling of inferiority or superiority. This forms the basis for the need to build salient relationships as according to the Weisbord Six Box model. This will avoid cases of employee dissatisfaction and ensure that the departments come up with one structure that is comfortable (Weisbord, 1976, p. 439). It is important to give the employees rewards for good work exhibited in the merger as a motivation to improve their returns under the new change. Weisbord (1976, p. 438) identifies the need for rewards in the diagnosis of change as a tool for motivation and growth of the organization. This, therefore, will lead to individual satisfaction in jobs and lead to prevention of terminating of the employment contracts. Conclusion and Recommendation Liveco’s attempt to change its organizational structures was met with negative opinions by the people. Any change by the organisation must be adaptable in the environment of the employees. Liveco has to ensure that the two departments are compatible and that there is full participation of employees in the different departments. Communication in the organisation should get opinions on change and educate the employees on the change. In reference to Child & Smith (1987, pp. 569-571), an organisation’s change process should be to the benefit of all individuals and the organisation. Arguably, any conflicts in the change can hamper its implementation and fall of the organisation. Therefore, Madam Isolda must apply a strategy to improve the company’s situation and at the same time improve the state of the employees. For any international strategies or changes, the organization structures and programs must be able to enhance the relationship between global needs and the needs of the local market structures and be acceptable to all the employees (De Cieri, et al., 2003). Liveco must ensure that it does not experience such problems in the future because employee satisfaction is the key to organization’s profitability and growth. A change brought should be acceptable and accommodated by everybody. Needless to say, communication should be done by the human resource managers to the rest of the employees in order to make them feel a part of the process. Other models like Congruence model of Nadler and Michael (1982) which incorporates the social aspect of change alongside the intra-organization aspect could be used to diagnosis future problems. References Anon., 1996. A processual approach. Asia Pacific Journal of Human Resources. In: Beyond conventional change models. s.l.:s.n., pp. 57-70. Armstrong, M., 2006. A Handbook of Human Resource Management Practice. London: Kogan Page Limited. Bhatia, S. K., 2005. A Global Perspective: Practices and Strategies for Competitive Success. In: International Human Resource Management. New Delhi: Deep deep. 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