Management of Change: Exxon Mobil - Case Study Example

Management of Change Introduction Every organization exists to achieve a well defined purpose. In order to attain organizational goals, a set of policies and strategies are defined and developed by management. As averred by Christensen, Andrews, & Bower (3), policy is “the study of the functions and responsibilities of senior management, the crucial problems that affect success in the total enterprise, and the decisions that determine the direction of the organization and shape its function”. One of the strategic management decisions undertaken by aggressive and competitive organizations is the management of change. Most business practitioners have grown accustomed to change stemming from new inventions and advancing technology. But suiting policy to changing circumstances includes also the application of a firm’s long-established strengths to unexplored segments of the market via innovations in price, service, distribution, or merchandising. Exxon Mobil is one of the world’s renowned globally traded oil and gas corporation. Exxon Mobil’s safety mission is to create an incident-free workplace with zero work-related injuries and illnesses (ExxonMobil, n.d., par. 1). Likewise, pertinent changes in organizational processes or systems are needed to adjust to the requirements of efficiency in assuring compliance to attendance protocols of a security company. In this regard, this essay is written to proffer a process of change at SLMC by critically discussing the process of designing and implementing change, highlighting areas of successful practice as well as areas where adopting different tactics might have changed the outcome of the change program. Company Background Exxon Mobil is one of the world’s renowned globally traded oil and gas corporation whose existence has spanned more than a century. The company has extensive scope of global operations “holding exploration and production acreage in 38 countries and conducting production operations in 23 countries around the world.” (Exxon, n.d., par. 4) Due to the responsibility and accountability of Exxon’s management to various stakeholders, it is pertinent that a clear and concise mission statement be explicitly stated. As indicated in Exxon’s official website, the organization’s mission statement is indicated as: “Exxon Mobil Corporation is committed to being the worlds premier petroleum and petrochemical company. To that end, we must continuously achieve superior financial and operating results while simultaneously adhering to high ethical standards.” (Exxon, n.d., par. 1) Change is initiated, implemented, and maintained in organizations to increase the level of competitiveness and boost the productivity of its people. Changes can be made in strategy, structure, technology, products and services, or people. The relevant thing to remember is that effecting the necessary changes in the organization could temporarily disrupt existing equilibrium. Management can minimize any resistance to change by emphasizing that the benefits for all far outweigh any costs associated with it. Status Quo and Need for Change At Exxon Mobil, attendance was being monitored by a system of logging in and out utilizing time cards that allow you to punch in and out and are needed as a basis for salary payments. In addition, an access card was used to enter buildings. The problem was that many personnel were punching other employees out when they already left hours earlier. Personnel were punching other colleagues in when they never came to work. This was an on going issue and there really was no way to detect it. This system was prone to loopholes and dishonesty because as peers develop teambuilding, employees belonging in the same department or team are susceptible to connivance in relation to attendance and payment requirements. Assumptions Concerning Change It was initially established that change is a necessary component in an organization in order to respond to inefficiencies, conflicts and changes in the environment. It was precisely identified that in Exxon Mobil, an immediate innovative response to their problem in the system of tracking down and monitoring attendance of personnel was eminent. According to Martires & Fule (2000) “change, no matter how elegant it appears to be on paper, becomes effective only when it results in people and group actually improving their collective performance”. The changing stage involves introduction and application of the new system. In the introduction stage, the proposal would be forwarded to top management to orient them on the advantages of the new system as well as costs involved. A cost-benefit analysis is always helpful with emphasis on long term benefit for the company. In addition, quotations from different suppliers of the biometrics technology should be included for management’s review. Once approved, the implementation or application stage requires appropriate orientation and training on the new system. The supplier should have a comprehensive orientation and training program to ensure that all personnel would be competent to use the new system. Depending on the scope of change, the learning process may be short or long. However, it should be emphasized that this new system would be beneficial in promoting honesty and thereby increasing productivity in the organization. Lewin (1951) in his book on Frontiers in Group Dynamics identified three steps in the process of change, to wit: (1) unfreezing; (2) changing; and (3) refreezing. The unfreezing stage is the initial step involving awareness and recognition of the need to change certain aspects in the current situation. The changing stage involves the introduction and application of the new patterns of behavior (Martires & Fule 2000). This stage encompasses orientation, training and learning the new system or aspects which were initially identified as needing change. Finally, under the refreezing stage, those new patterns, systems, or behaviors must be stabilized and sustained for it to be effective and considered successful. At this stage, a full integration of the new aspects is finally ingrained into practice. Transitions of Change Upon discovery and acceptance by the whole organization of the need to change the outdated system of attendance, any gap would not exist in what the organization wants and what it proposes to get. A full disclosure of the problem and the threats to productivity and morale make management realize that investing in a new technological update on time keeping would be the best solution to this scenario. Participant in the Change Process In most organizations, change proposals may come from anyone. They may come from the rank and file, supervisors, managers, and key executives, or from supplies and customers. From this security company, the change proposal was initiated by the Security Manager who was in charge of handling attendance records and bundy clocks. Many changes originate from management who review the proposals and decide based on a set of factors needed prior to decision making. It is important to note that the ultimate success of change efforts rests on the acceptance of all concerned personnel. Martires & Fule (2000) averred that “success means the creation of anew and higher level of performance by the people in the organization”. Proposed System As called for in this situation, change is necessary to achieve a new and higher level of performance and efficiency – as well as to lessen the tedious system of effecting the needed monitoring schemes. Technological advancement made improvements in the system of logging in and out to ensure accurate attendance of employees. This system is called biometrics. “Biometrics is the science and technology of measuring and analyzing biological data. In information technology, biometrics refers to technologies that measure and analyze human body characteristics, such as fingerprints, eye retinas and irises, voice patterns, facial patterns and hand measurements, for authentication purposes” SearchSecurity.com (2009) These have several applications including time attendance, access control, identification card, security systems, server rooms and data centers. The rationale for slowly replacing manual processing and converting into biometrics are: ease of use, removes proxy punching, prevents identity theft, no recurring costs on cards, better returns on investment and instant reporting. (BioEnable 2007) The electronic system determines whether to grant access to the protected area based on the credential presented and when it is presented. If access is granted, the entry access is unlocked for a predetermined time period and the transaction is recorded. If access is refused, the entry access remains locked and the attempted entry is recorded. The system will also monitor the entry access and declare an alarm if forced open or held open too long after being unlocked. An access control point can be a door, turnstile, parking gate, elevator, or other physical barrier where the granting of access can be electrically controlled. The main advantage of maintaining portions of manual processing to personal access is its cost of maintenance which is considerably less than electronic technology. Especially in developing countries, the cost of labor is relatively cheap than availing of expensive technological developments like what biometrics could accord. The primary disadvantage of this system is its susceptibility to dishonesty through proxy punching. In addition, this system is also prone to identity theft (through the transfer of identification cards) and recurring costs on cards. In addition, with technological advancement, spurious people could devise ways and means to counterfeit identification and access cards and physical access control without being traced by manual procedures. Given the features, functions, mechanics and availability of applications for biometric technologies such as fingerprint scanners, iris recognition systems, and smart cards, it can be deduced that the most viable, fairly economical and more practical from among the three is the fingerprint scanners, which could be immediately applied at Exxon. Other factors are to be considered in selecting a kind of biometric technology. These factors include the environment or organization where the biometric technology would be applied, the profile of the users, the requirements for verification, the level of accuracy, ease of use, incidence of error, and long term stability are all to be taken accounted for. In addition, the costs and capabilities are relevant factors that some organizations figure to be their deciding points. Most organizations still could not afford utilizing electronic technology due to the capital outlay needed to install and utilize the system. The cost, for example, of applying fingerprint scanning is still relatively expensive as compared to the traditional modes of ID badges. Further, upgrading an organization’s communication system would entail an investment in time, money and effort to conform to the ever changing and developing technology that the electronic industry accords. The factors that need to be closely considered in the change process is the budget for implementing biometrics and the security and information technology personnel who would be directly involved in maintaining and monitoring the upgraded biometric system in terms of reorienting and training authorized personnel to support this continuously evolving project. Actions Steps to Implement the Change The changing stage involves introduction and application of the new system. In the introduction stage, the proposal would be forwarded to top management to orient them on the advantages of the new system as well as costs involved. A cost-benefit analysis is always helpful with emphasis on long term benefit for the company. In addition, quotations from different suppliers of the biometrics technology should be included for management’s review. A financial investment would be carefully reviewed after evaluating the following factors: (1) price of the investment; (2) benefits and cost analysis; (3) adaptation of personnel to the new system; (4) available funds or capital of the organization; (5) financial or economic desirability and returns on the investment and (5) salvage value of the old system, if any. According to Viscione (1977), “a firm uses funds and must obtain sources of these uses, and thus, financial management can be viewed as the management of a firm’s sources and uses of funds”. Thereby, if the management can confirm that the particular investment for a biometrics machine is within the firm’s budget, and the benefits accorded would increase the level of productivity by eliminating proxies in attendance of employees and no recurring costs on cards, thereby, the decision is skewed on the positive side. Once approved, the implementation or application stage requires appropriate orientation and training on the new system. The supplier should have a comprehensive orientation and training program to ensure that all personnel would be competent to use the new system. Depending on the scope of change, the learning process may be short or long. However, it should be emphasized that this new system would be beneficial in promoting honesty and thereby increasing productivity in the organization. Resistance To Change The employees in any organization develop an adherence to organizational systems which had been used for a long time. The traditional attendance and personal security system at Exxon Mobil had been utilized since incorporation. Therefore, being habituated to this system, the employees naturally resist a proposed change in the system because these are seen as threats to the status quo. The supervisors who received the messages indicating resistance to change employed the abovementioned strategies. Some supervisors actually called in group meetings to explain the changes that were critical and necessary to improve the security system at Exxon. The personnel who openly resisted change relayed that the new system would be difficult to implement because it would require extensive training and orientation to all members of the organization. They cited senior members who expressed fear in learning a new technology and the difficulty in adapting to a new system. The newly graduates and newly employed members of the organization were supportive of the change. They are more adept in technological advancement being exposed to the advancement accorded by the computers and the internet era. Further, they acknowledged that the old system was prone to loopholes and dishonesty due to proxies in punching attendance records and the possibilities of conniving with colleagues who had been with the organizations for years. This particular comment actually incited more resistance and discord among members of the groups. However, it was immediately eminent that by soliciting feedback from the employees who openly resisted change, the supervisors were able to immediately address the problems through clarification of points discussed and by enumerating the benefits of the biometric system. The supervisors did not take sides but clearly and objectively enumerated costs and benefits of both the traditional system and of biometrics, as the alternative. Supervisors and managers were fully aware of the resistance to change. Martires & Fule (2000) identified four bases of resistance to change: rational, emotional, social and political. At Exxon, the possible resistance could be a combination of emotional and social. There is the desire to retain the status quo because they can utilize proxies in logging in and out. The group forces and teams that have been established over time support the status quo for their own selfish personal objectives. In addition, older personnel are apprehensive of the new system for fear that they could not adjust and adapt to the new technology. To manage this possible resistance, management can employ the following strategies: (1) information and communication prior to the change to prepare the employees of the new technology; (2) consultation and participation by soliciting employees’ comments, suggestions, apprehensions, and the like; (3) emphasis on benefits of the new system; (4) orientation and training to show easy use of the new technology; and (5) assurance that the new technology would not disrupt employee’s security but rather contribute to a higher level of productivity and morale. Analyses The natural reaction for the change process was resistance from the personnel – especially those who were able to use proxies for attendance purposes. These groups of people relayed their apprehension to resort to biometrics through various correspondences to their supervisors by verbal and written communication. The objective principle of clearly indicating cost-benefit analyses of both alternatives paved the way for a better understanding of the change process. By soliciting feedback, all points of apprehension and fear were clearly communicated and properly and immediately addressed. The change process would be successful and sustainable because the present system had its loopholes and were already outdated. The practice of utilizing proxies and recurring costs on cards would eventually take a toll in terms of lowering morale, productivity and affecting profits. By keeping pace with technological advancement the benefits provided by the new system would be realized by the personnel and by management as viable, feasible and practical. Since the new technology would not displace any personnel and can in fact produce returns in investment in a very short time, this change can definitely be considered successful and sustainable in the long run. Conclusion Change is initiated, implemented, and maintained in organizations to increase the level of competitiveness and boost the productivity of its people. Changes can be made in strategy, structure, technology, products and services, or people. The relevant thing to remember is that effecting the necessary changes in the organization could temporarily disrupt existing equilibrium. Management can minimize any resistance to change by emphasizing that the benefits for all far outweigh any costs associated with it. Exxon ‘ s security management has the basic responsibility of ensuring that safety and security needs of the personnel are being satisfied. This means their personnel should be free from physical and psychological harm, threat and deprivation. Aside from these, as systems and processes are also susceptible to other kinds of intrusion due to the onset of the internet, security management also has the task to monitor and immediately address these issues. In today’s world of advanced developments in technology, more sophisticated facilities and features on improving security and safety of personnel are available. Organizations have options to update their security measures by upgrading their security system to incorporate advances in technology. In cases like these, the role of security and safety personnel would definitely be affected. But the relevance of their responsibilities in any organization in remains indispensable. Due to the sensitivity and critical responsibilities accorded to security and safety personnel, high respect and merits should be accorded to them in being the safeguards of welfare. The components and process of change should be clear to each personnel to make managing change effective. Every organization’s goal would be to ensure the effective and efficient conduct of their daily operations and activities while providing for its personnels security, safety, and well-being as a high priority. Organizations need stability and continuity as well as innovation and adaptation. Without some stability, any organization cannot function, yet, without adaptation it cannot survive. Organizational change is the essence of adaptation and innovation. People, processes and systems need to be flexible to respond to conflicts and changes in the environment. Reference List BioEnable, 2007. Biometrics. Bio Enable Technologies Pvt. Ltd. [Online] Available at: http://www.bioenabletech.com/index.html [Accessed 24 July 2010]. Christensen, C.R., Andrews, K. R. & Bower, J. L., 1978. Business Policy: Texts and cases. Richard D. Irwin, Inc. Homewood, Illinois. Exxon Mobil. (n.d.) About us. [Online] Available at: http://www.exxonmobil.com/corporate/about_operations_sbc_principles.aspx [Accessed 23 July 2010]. Martires, C.R. & Fule, G.S., 2000. Management of Human Behavior in Organizations.National Bookstore, Philippines. SearchSecurity.com, 2009. Biometrics. TechTarget. [Online] Available at: http://searchsecurity.techtarget.com/sDefinition/0,,sid14_gci211666,00.html [Accessed 24 July 2010]. Viscione, J.A., 1997. Financial Analysis: Principles and Procedures. Houghton Mifflin Company. Massachusetts, USA. Read More