Organisational Change & Transition: a of Power Co - Case Study Example

EXECUTIVE SUMMARY: In today’s fast paced time where technology is replacing men in a perplexed business environment, companies should be highly flexible, innovative and ready for changes. There are several levels to these changes; mostly the strategic management change fetches the opportunities in the external environment working through the internal workings of an organization( Auster, 2005). Change management means to create a change in the nature of an organization that could be interpreted as a requirement of learning (McAdam, 2002). However there are certain barriers to changes such as the political influence or the existing culture dominance or lack of leadership control. Power Co. is an electric company that generates, transmits and vends from hydro sources. The organization was overpowered by the civil engineers though the company ignored the status of electrical engineers. Because of its jumbled up attitude during 90s, company ended up with huge debts on its name; there were protests and cynical demands for oversupply of electricity. Due to this performance the government then decided to commercialize it. Looking at the external problems of the company, the company never had any competition which provided it with a strange situation. However internally the employees were kept far away from the change which was the biggest mistake as they were the engine running the company and eventually they started leaving the company when its structure began to stumble. The company could not endorse the changes. This report consists of the details of the problems faced by Power Co due to the changes that wew introduced to the company. Further it has the theories and models proposed for the company for transformational changes. What possible alternatives can be adopted by the organization at the time of crises when the leader steps bcak and the employees are not ready to endorse the changes the organization needs to go through in order to sustain its existance. INTRODUCTION: Power Co. was established in 1914. The company was more focused towards its civil engineers than for the electrical engineers, though what the company basically did was to produce and supply electricity through hydro sources. The company invested most of it’s time in civil activities like building and construction of dams and canals. In the process the company lost it’s pace in electricity production. By that time, technology was advancing fast and the main investments of the companies were in civil activities. The number of employees fell from 4153 to 1633 causing the company to slow down in its production. Given this dreadful situation the government decided to make it commercial by dividing it into three distinctive organizations.Thus a series of theories were proposed to assist the organization to cope up with the transformational issues it was facing. BACKGROUND TO ORGANIZATION: The commercialization programme did not get a good start because of both internal and external problems. Due to lack of coordination and control the so called change turned into a mishap. Firstly, because the company did not have any severe competition the whole commercialization change was taken too casually. Secondly the employees were unaware of the change that the company was going through; according to them they should have continued with the dam construction business. The management was unable to answer the queries of their own employees; whether the company would be privatizing or remain as it was because the case was still in government’s hands. This provided a blurred vision for the company’s employees and the structure of its management started to jeopardize. The company was unable to react to the changes because it wasn’t transparent to the workers and the management was in a critical situation to make a move. Thus as a result company became a body that paid returns to the government on its investments. According to Mintzberg ,2003 culture is the spirit of an organization. The values, beliefs and principles of a business from its core. He believes that structure is the exterior skeleton and culture is the spirit that keeps all attached (Mintzberg, 2003). However Schein,1995 makes it easier by defining the culture of an organization as a prototype of basic assumptions. It is basically created and agreed upon by a group of people to overcome their external problems and progress and to improve the internal integration (Schein, 1995). In case of Power Co. the company’s structure was not informed about the change they were supposed to experience. The culture as defined by Schein is the assumptions agreed by group of people, however here the employees were kept in dark rather than preparing them for the changes. As the dam construction was ordered to stop most of the employs were reduced and some of them left on their own choice as they were dubious about their future. And as for the managerial positions candidates were informed that there is no vacancy however they can volunteer. The question of reforms and introducing the new agenda was untouched by the managers, most of them feared losing their jobs. The human resource department could have become a bridge between the two parties; organization and the change management. But as a result the leaders quit the job leaving the structure stumbling. It is a fact that the company already possessed its own culture where the civil engineers were the influential and dominant party to rule over the rest. Culture cannot be changed because people and nature of job remains the same; nonetheless the new innovations can always be submerged in a way that is not too difficult to comprehend ( Tichy, 1984). Any change to be added to any organization has a straight link to its hierarchal relationships which are responsible for the transformation in the working process and duties. Because the problems were never kept transparent, here it was important to impose a new scheme of restructuring the organization. It was the senior management who was responsible for bringing this revolution. The problem when evaluated, showed a distinctive engineering culture where most of the men with same nature of job were working at different location. The company was heavily dependent on its engineers who set the culture’s principles and values for Power Co. the only solution to this was to replace the current staff with commercial staff to transit according to the changes and adapt to new culture and the reason behind this was to encourage the endorsement of change. Since the old staff was unable to adjust to the change by replacing the old staff with new ones especially in the management sector because the major responsibility was on their sholders to make the company endorse the changes. Along with the whole turmoil the CEO of the company resigned which made Power Co. facing a staggered situation with lack of leader and confidence to move ahead and face the challenge alone. The company after the loss of the CEO , the leader of the organization was stumbling becasue the main person to lead the way had stepped back. In such a situation the employees and the investors are taken aback by such action and become cauntious of the surrounding. DYNAMIC MODELS OF CHANGES: According to researches it has been found that there are number of models and theories proposed to transform the organization. There are several types of changes that an organization goes by due to environmental changes that cause it. A both external and internal factor leads to change and both needs to be correlated in terms of creating a change in an organization. (Scholes, 1993) The argument here is that change is not a demonstration of linear activity happening A to B or something that could be showed and immediately implemented. There are series of strategies and ideas that lead to it and make it work in action. There are certain factors that need to be acknowledged when proposing a strategy or model of change for a company. As for Power Co. it required a strong and flexible structure with faithful and efficient work force that can interpret the future requirement and mold accordingly. Change is interlinked with the internal and external environment of an organization. The stewardship and the political activities of Power Co. give it internal environment and the government intrusion with commercializing scheme could be defined as its external environment. Determinants of organizational change: (R.Greenwood &, 1988) The dynamics of organizational change Components of analysis: context and process A dynamic model of change suggested by this case study (Pettigrew, 1987) Pettigrew’s idea refers to both internal and external environment of the organization. The problem with this model is the uncertainty of the context. (Dawson, 1995)Dawson’s approach to his model emphasizes on the chunks of change together which are known as determinants. However the problems with this model it ignores the dynamic quality of change. It is more of a static change but it fails to acknowledge the dynamic change which is well conveyed by the Pettigrew’s model of change. The sphere symbolizes the expected changes in the organization and its interaction. The point is none of the three would occur alone or would have separate effect on the organization. They all are interrelated if when change of structure-substance is required it would definitely require the workmanship-stewardship or even the government view on the impact of what they are implementing. Either way it cannot be occur alone without affecting the other, they all are interconnected like body parts. Because the change is in a continuous tense it is important to monitor and analyze the strategies used to implement the theories and models. All organization isn’t the same, in case of Power Co. the main problem was that there was no one to examine and analyze the changes and its effects. Strategies and theories implemented were required to be analyzed according to the demands of the organization separately. (Dawson, 1995)The idea of uncertain business environment isn’t new; Greenwood and Innings (Hinings, 1988) , Tichy (Tichy, 1983), Tushman and Romanelli (Romanelli, 1985) all highlighted that when an organization goes through a change there are certain factors that unfolds as the change is applicable. The vicious circle by Hamlin demonstrates the problems and the circumstances that lead to it. The ineffective management the fails to administer the organization as a whole. (Beep K. Hamlin, 2003) Adjustment and alterations to the strategies are framed in a way it reflects the tactic adopted by the organization to cope up with the change. However Power Co. made a failed attempt in attaining it. The attempt to reunite the dispersed and stumbling organization was left by the senior management to jeopardize with most of the staff leaving and the rest not accepting the commercialization agenda. It was important to make the employees feel required an involved in the organization. This could have been done by letting them be a part of decisions and keeping the company information of privatizing or commercializing transparent. In such a case feedback is an essential instrument because as observed from the beginning the company has a pathetic condition in communicating vertically within the organization. It is always important to diagnose the nature and origination of the problem. Feedback provides the evaluation of the strategies adopted by the organization. This could result in making a learning organization that is ready to correspond according to the changes. When it comes to learning in organization it is taken as whole because it is not about an individual here but the whole organization. For instance if the company would have a transparent vertical integration with healthy learning atmosphere the employees wouldn’t have left the organization with the unwanted feeling instead they would have reunited in team spirit to work as one for the organization. It was important to give them a sense of belonging and make them realize that the change occurring was for their benefit. Theories of changes: The case clearly demands a static model of change for the betterment of the company to make it possible for the company to survive in the time of crises where there CEO have resigned and he employees are stepping back. A static model is defined as the snapshot model for the current situation (Turban, 2007). Initially the exterior of the company has to overcome the inertia it possessed; to implement change it is important that the exterior portrays what is going on inside. As for the internal workings has to be won by the faith and trust the company employees share with each other’s and the senior authorities ignoring the past. At the macro level the company opposed to changes and that was because of the government intrusion on posting a new CEO and setting the organization for commercialization. Lewin’s( Reference) theory of change proposed three stages; Unfreezing stage, motivating stage and refreezing stage. The unfreezing stage occurs when there is an unbalance force in the organization, when an individual is not satisfied and he do not corresponds the same way as others requiring an overall change. The main purpose of Lewin’s theory of change is to unbalance the current situation that is to take the situation away from its noraml surrounding that is called freezing and than embeddign changes to it seperately and taking it back to the equilibrium-unfreezing to adjust to the changes. Motivating stage involves the process of solution; the senior management gathers information about the problems and their variety solutions trying to create an innovative change that suits all. The refreezing stage is when the change is implemented and the organization gets adapted to it. The change dissolves in the existing culture creating new values and principles for company’s benefit (Russel, 2003). As for the case of Power Co. it was time for the refreezing stage to come into action and for employees and managers to be adaptive to the changes the government demanded from it. The problem here was the protest from the environment welfare organization which was damaging the moral reputation of the company. What could be concluded from the results was that the refreezing stage could only work on the micro level ; however in this case the staff was leaving the organization and as a whole the company was degraded by the external sources. Political influence was also a prominent part of the organization. Schermerhorn defines politics in an organization as an influential management to obtain the limits that are not sanctioned by the organization to acquire (Osborn, 2000) . The problem that aroused was the management that was currently present in the organization was not anticipating or supporting change either. Most of them were working seeking a chance for getting promoting up as most of the vacancies were available at that point of time but they were not working in the favor of the organization. According to Bowen’s power model of change (Bouwen, 1995) a leader is an influential personality who is responsible for bringing in the change and preparing its team to adapt to it. Power coercive way of decision making can be used by the management as rapid change is required. Fred Luthan’s successful vs. real manager’s concept explains the situation here. The managers who were able to get ahead with the changes that were coming their way and were generating the team spirit to welcome it for the benefit of the organization are the real managers because they are the ones who actually are managing. Whereas just being there managing artificial stuff and seeking promotions are the successful managers (Fred Luthans, 1988). However in this case if the management wasn’t ready for the change they should have struggled for it or stepped behind and allow the conventional managers who can work for the benefit of the organization. It was important for the work force of Power Co. to take a decision for their land company’s future. Dunphy and Stace model of change focuses on the style of change rather than the size of change (Stace, 1990). This model emphasized the importance of transforming the leadership style in the organization to welcome change as whole. However according to Morgan (Morgan, 1986)the organization is able to control all possible changes it go through which might not be the case always. The diffusion of control of management might unfold in a surprising and unexpected way. CONCLUSION: The case showed the complications preserved in an organization on introducing a change in culture. The requirement of proper evaluation and analytical strategies while keeping a control on the adjusting variables while the change unfolded was unattempted resulted in disequilibrium in an organization and its collapse. Proper strategies were to implemented very cauntiously in the organization such that it welcomes and adjust to it easily to make it move on, however due to poor analytical strategies the organization resulted crumpling. The focal point were the change teams that were suppose to incorporate the change in the organization however it all dysfunctional because no one was kept to monitor the change the organization was going through, a proper in vigilance was required to see if the changes are actually activated and supported in the company or not. With a more powerful and determinant leader the company could have passed this stage too. A leader that could take the company ahead in this time and keep the employees together giving them a reason to work and by correlating the futures of the employees and the company together for benefit as a whole. Because leader is the person who is reponsible to provide the employees with a proper direction and vision, he sets the goal the organization needs to achieve and it himself work in an influential way. With better monitoring and conventional leaders the organization could have given a new direction. Strategies with evaluation and analysis from the feedback should be adopted and activated for the progress of the company. REFERENCES Beep K. Hamlin, &. K. (2003). Organizational change and development. Prentice-Hall. Bouwen, R. (1995). ). The reconstruction of power relationships: Four approaches dealing with the new logic and the dominant logic in organizational innovation. Belgium: Györ Hungary . Dawson, P. (1995). Beyond conventional change models: a processual perspective. Asia Pacific Journal of Human Resources , Vol. 34 No.2, pp.57-70. Ellen R. Auster, K. K. (2005). Strategic organizational change: building change capabilities in your organization. NewYork: PalGrave MacMilan. 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