Importance of Organizational Change: The of Ascension PLC and TED - Case Study Example

Title: AN ESSAY BASE ON A CASE STUDY Introduction Change has been said to be part of all organisations and that change is necessary to implement when the same way of doing things no longer becomes effective for expected outcomes (Johnson, Whittington & Scholes, 2011). Reading through the case of Ascension plc and TED to be specific, this is the situation that can be said to be at hand. The paper is therefore aimed at assessing the change that took place at Ascension plc so as to validate the need for the change and justify the approaches that went into the change process. To do this, the strategic change context of the organisation will be determined with Kaleidoscope model and force field analysis. The cultural context of the organisation as well as adherence to change process models will all be investigated. These steps will be followed so that it can clearly be ascertained that there are elements within the organisation that warranted change and that the change process took place as expected. Strategic change context at the start of the change process Change has been said to be the only constant thing in the business world (Johnson & Scholes, 1998). This is said not because once a change takes place it remains same for long. Rather, it is because change has been with the business world and will continue to take place among various companies. This notwithstanding, Levy (2013) warns that change must not take place within the organisation just for the sake of it. By implication, there must be sufficient grounds for change to take place before it is implemented. With this known, Balogun and Hope Hailey’s Change Kaleidoscope Model can be said to be one of the most effective means by which an organisation can pull together and codify a wide range of contextual features and implementation options that warrant change (Hailey & Balogun, 2002). In table 1, the Kaleidoscope model has been used to comprehensively outline eight contextual features of change at TED. Table 1: Balogun and Hope Hailey’s Change Kaleidoscope model Power Turning things around from a financial perspective without changing things that were working gainfully Time 3 year strategic plan which consisted of 3 phases of change initiations that needed to be implemented Scope High depth of change across all management levels including middle and high as there was lack of unity among these Readiness High level of readiness among the management members, especially at the middle level as they knew about the risk involved in not changing Capacity (low) At the organizational level, people were ready to support but sceptical At the individual level, cooperation was only a necessary evil Capacity (positive) People capacity was sceptical Time capacity was limited to cause all the change in 3 years Retarded cash inflow and outflow Preservation It was necessary to preserve the organisation’s core business Change was needed with the approach to spending Attitudinal change was needed among the human resource of the company Diversity Professional in the division are highly diverse in their way of thinking, values and attitude towards work From table 1, it is possible to identify two major lines of strategic change contexts based on the eight contextual features. These are strategic change contexts that were most challenging and those change contexts that were enabling. Indeed the issue of time, scope, diversity, and some aspects of capacity presented a lot of challenge for the company’s change process. As it was admitted by Jack, time was a major constraint because a lot of changes were expected in only three years. Meanwhile, Balogun (2006) notes that for the most effective forms of change to take place, it is always important that things will be done as gradual as the capability of the organisation is able to take. Meanwhile, not only was the time minimal but also such capability constraints as cash inflow and outflow a well as individual level cooperation were all sceptical. In the estimation of Ostroff (2006), changes must not be programmed in such a way that their scope is larger than the time available for there to be thorough consideration of all deliverables that constitute the change. However, TED had a challenge of undertaking a high depth scope of change that involved turning the entire organisational profitability around in only three years. With the depth of responsibility, it was expected that even if there was diversity among workers, it will be a positive one but this time there was no unity among the employees. Regardless of the challenges, there were some enabling change contexts within the division that automatically served as a motivation for the change to take place successfully. Some of these included readiness, preservation, power, and some aspects of capacity. Given the background knowledge that the workforce has about the fate of TED if change does not happen, it is known from the case that even though they were doubtful if the change that Jack was bringing was going to be any different from what they have already seen, they were still ready and willing to allow the change to take place. The power situation that defined the change which was the need to turn the financial fortunes of the department around was also a major enabling change context because in the minds of the managers, they were aware that if they continued to do things in the exact way they had done before, that goal was not going to be achieved. As Jack noted, “I felt that the core business was reasonably sound”. This meant that the change was not going to be something that was going to happen from the roots, meaning that there could still be preservations that were going to be built upon to ensure ease with the change process (Hamel & Coimbatore, 2004). Even more, cooperation was something that Jack was going to get as part of capacity, noting that there were “others who knew change was vital but just weren’t sure if we could do it quickly enough”. In an indirect manner, Lewin’s force field analysis helps to achieve almost the same outcome that the Kaleidoscope model brought on board. This is because as it can be seen from table 2, the force field analysis clearly outlined pressures within TED that were for the change and those that were against the change. In applying this tool, Johnson (2000) noted that it is always important to ensure that the change that take place are those directly improves on the resisting forces whiles taking advantage from the pushing forces. With this said, the change that took place can be said to be ideal enough if the fact that customers wanted to see change, that TED would be closed down if Jack failed, the need to cut down cost and eliminate loss projects, and the need to build reputation for tough unions became the motivating factors for the change. Meanwhile, it is expected that the success of the change will be judged by how well the department is able to transform the list under the resisting force row of table 2. Table 2: Lewin’s Force Field Analysis PUSHING FORCE RESISTING FORCE Customers want to see the TED get new contracts Decreased diversity TED to be closed down if Jack fails Poor cooperation between different levels of management The need to cut down on cost of production Slow organisational process Elimination of loss projects Slow production speed Reputation for tough unions Loss of skilled staff Loss of income from losing contracts Culture of TED before and after the change The organisational culture of any company has been said to be a very important and central aspect of organisational process, affecting both what goes into productivity and what comes out of it (Schoemaker, Krupp & Howland, 2013). For this reason, it was very important that as part of the diagnosis of knowing what was wrong with TED and justifying whether the change was necessary at all, it was important to use a tool or model that helps to analyse the culture of the department. In table 3 and figure 1 and 2, the organisational culture of the department are summarised for periods before the change and periods after the change. Table 3: Summary of Organisational Culture at TED CONTEXT BEFORE CHANGE (2012) AFTER CHANGE (2014) Stories The division’s inability to win contract Top customer rating Railway supplier of the year Rituals and routines Customers expect more contracts to be worked on Employees are not capable of handing more contracts Competitiveness among industry players Profit making Symbols Frustrated workers and managers Ministry of fun Organizational structure Fragmentation between management teams One company and one team Control systems Ineffective IT system Loose control among employees Clear ownership and accountability Ineffective IT system Power structures Senior management members Middle management members Everyone including those in the frontline From table 3 and figures 1 and 2, it would be seen that the similarities between organisational culture between 2012 and 2014 are very few, as most of the cultures as reflected through the elements of stories, rituals and routines, symbols, organisational structure, control systems, and power structures are very different from each other. Figure 1: Johnson’s Cultural Web before change Ahead of the change in 2012, if there was any event that people within and outside the department talked about, it was the numerous times that TED failed to win any contracts. This made the fact that there was unmet customer demands a ritual because that was the daily behaviour and action of the workforce within the organisation. This ritual directly created a symbol of frustrated workforce who did not see their ambitions for taking up professional role at TED come true. As indicated by Fazio, Powell and Herr (2013) human capital development is very much dependent on how much the workforce of any organisation is put to result oriented use. This is because the more the workforce is utilised, the better their chances of gaining experience. This was however something that was not part of the organisational culture of TED before the change. Figure 1 also symbolises that the power structure of the department was shared largely between the middle management members and senior management members, the two of who did not trust the other or see the other as being supportive for change. This led to a fragmented organisational structure which had a very loose control and ineffective IT system. Figure 2: Johnson's Cultural Web after change As can be seen in figure 2, once the change took place, there was only one area of the culture of TED that remained unchanged. This was with the ineffectiveness of the IT system in the organisation. This means that the control system element was something that Jack failed to change perfectly well as he admitted that “we couldn’t make changes to the company wide IT system that was introduced in 2010”. In the absence of this, the change could affect several other cultural components of the organisation including a change in stories to the success stories that are being told about TED. The ritual has also change into the fact that the department has now become competitive in nature and so only look to ways by which it can be ahead of its competitors. There is now better team work and an all-inclusive power structure, which has led to a symbol of Ministry of Fun being created among employees. With the changes known, the most important question that ought to be asked has to do with what made the cultural changes achievable. According to Levy (2013) because the culture of an organisation is directly reflected in the ideologies, motives and aspiration of the people within the organisation, change in culture will hardly happen if there is not attitudinal change. The attitudinal change is also expected to be spearheaded by the human resource of the organisation, given the fact that this group serves as the pivot around which all other organisational processes that constitute organisational culture revolves (Liedholm & MacPherson, 2014). When there is change in the attitude of the human resource, most other components and parameters that form the organisation’s culture such as management jargons, working environment, communication process, quest for success, and attitude towards customers all become transformed. Meanwhile, right from 2013, transformation that required a widespread attitude change was implemented by Jack. Indeed not only was the need for change in attitude an initiative by Jack but it was also upheld by the larger human resource base of the company and nurtured to successfully remain growing within the organisation. Critique of TED’s change process Change is said to be a process rather than an event (Balogun, 2006). By implication, change does not happen as a sudden single task. Rather, it involves several series of tasks that are systematically put together in a manner that guarantees effective transformation of how things are done within an outfit. With this in mind, Kotter (2001) used the 8-step change model to explain the stages that are expected to be involved in any major change within an organisation. It is when the steps are fully exhausted that the change can be said to have taken place as a process rather than an event. To critique the change process at TED, the steps listed in figure 3 are explained in the context of the department. Figure 3: Kotter’s 8 Change Steps model Adapted from Kotter (2001) The first step of change is expected to be the creation of sense of urgency. Kotter (2001) explained that at this stage, there is the need to make all stakeholders, especially those who will be directly affected by the change and those who will be forerunners in the change process aware of what is about to happen. The implications of the change must also be explained very clearly to all these people so that they can support the change. At TED, this step was followed well because Jack the management clearly aware that the change was urgent if the department was going to be allowed to run. The second step in the model requires the formation of a guiding coalition, which is part of the first step by convincing people to support the change (Lynch, 2009). Initially, this was something that was very difficult for Jack to do, based on the fact that even though the people were ready for the change, they were doubtful of what its outcome would be. Because of the doubt, the coalition was formed but not very strong because management members were reluctant to give in their maximum cooperation. The creation of a vision is the third step, which requires a clear cut vision of what exactly needs to be done. Indeed not only was a vision created to transform the financial fortunes of TED but there were also timelines given for the implementation of the vision. The timeline was three years, made up of three phases of changes that had to happen within the organisation. Once the vision has been created, communicating it is very important in determining how well it will succeed. This is because Kotter (2012) identified poor communication as a major barrier to organisational change and the promotion of employee resistance to change. This is because when employees feel that the change vision has not been well communicated to them, they develop apathy towards it. Luckily, Jack admits that “we communicated a clear change strategy to people”, which was something that helped with the overall change process. The fifth step involves empowerment of others to take action on the vision. In the perspective of Kotter (2001), one of the most effective ways in which organisations across the globe have empowered their stakeholders to act on change is through training and development. Training was something that took place at TED but it seemed to have come only as a means of sustaining the change rather than empowering people to act on the vision. What is more, the creation of quick wins has been found to be necessary as it ensures that short-time successes can be experienced by the workforce to be a means of motivation to push higher (Balogun & Hailey, 2009). Knowing this, Jack ensured that there was the planned creation of manageable chunks at Ascension. This was done to ensure that there would be periodic successes that would be experienced before putting all these together to a common victory. Furthermore, the Kotter model requires building on change rather than declaring victory too early. As it has been mentioned already, this was something that Jack ensured at TED to be specific and Ascension in general when training programmes were put in place to ensure that the change that eventually happened did not become short-lived. Finally, the institutionalisation of change is very necessary to anchor the change in corporate culture. With reference to table 2, there were resisting forces that were indicated ahead of the change process. As part of the approaches to anchoring the change in corporate culture, all the resisting forces were changed into elements of the organisation’s culture as showed with figure 2. This ensured that the change became a permanent part of the department and Ascension as a whole. Conclusion TED had been periodically threatened of closure due to non-performance. Once Jack came on board he took inspiration from the willingness of the people for there to be a change but there was a challenge where he had to undertake a high depth scope of change in only three years. By carefully following Kotter’s 8 step change model, the task that was otherwise seen as being herculean became a reality. This is because there was a very clear-cut vision which was formed and communicated effectively to stakeholders involved in the change process. Even though the extent of empowerment of the people for acting on the vision was not forthcoming, this did not become a yardstick for the change process to be abandoned. Rather, through the systematic application of pushing forces for change, the change eventually became successful. A readily available evidence for the success with the change is the cultural change which took place as an outcome of attitudinal change. It will be accepted however that it was not all areas that change was successful. Given the fact that the IT system remained relatively same since 2010, it can be suspected that the change in attitude that took place was not made to focus very well on this area. To conclude therefore, it would be said that diligent approach towards change adapted by Jack was largely responsible for the outcome of Ascension’s eventual performance but the change could have been made better if all areas were given equal focus and attention. References Balogun J. & Hailey V.H. (2009). Exploring Strategic Change, 3rd edition, New York: Prentice Hall, 2009. Balogun J. (2006). ‘Managing change: steering a course between intended strategies and unanticipated outcomes’, Long Range Planning, Vol. 39 No. 5, pp. 29–49 Fazio, R., Powell, M. & Herr, P. (2013). Towards a Process Model of the Attitude- Behavior Relation. Journal of Personality and Social Psychology, 44, pp. 723-735. Hamel, G. & Coimbatore, K. P. (2004). Competing for the Future. Cambridge, MA: Harvard Business School Press Johnson G. & Scholes K. (1998). Exploring Techniques of Analysis and Evaluation in Strategic Management. New York: Prentice Hall. Johnson, G. (2000). "Strategy through a Cultural Lens." Management Learning, Vol. 31 No. 4, pp. 403-426. Johnson, G. Whittington, R. & Scholes, K. (2011). Exploring Strategy. 9thedition, New York: Prentice Hall. Kotter J. (2001). ‘What leaders really do’, Harvard Business Review, December, pp. 85–96. Kotter, J. (2012). Leading Change, London: Harvard Business Review Press Levy, B. (2013). 'Obstacles to Developing Indigenous Small and Medium Enterprises: An Empirical Assessment', The World Bank Economic Review Vol. 7 No. 1, pp. 65-83 Liedholm, C. & MacPherson C. E. (2014). ‘Small Enterprise Employment Growth in Rural Africa’, American Journal of Agricultural Economics, 76, pp. 1177-1182 Lynch, R. (2009). Strategic Management, 5th Edition, New York: Prentice Hall. Ostroff F. (2006). ‘Change management in government’, Harvard Business Review, Vol. 84, No. 5, pp. 141–147. Schoemaker. P., Krupp, S., & Howland, S. (2013). ‘Strategic Leadership: The Essential Skills’, Harvard Business Review, January-February, pp131-134. Read More