Managing Change: the Ship Broking Industry - Essay Example

?Managing Change Introduction Change is the most constant factor in the world. It is almost inevitable for any business to remain the same withoutintroducing any changes in their vision, objectives or processes. The modern world has become a global village where customers have access to international products and services. Competition has escalated for companies since they have to compete with local as well as international businesses. This awareness and exposure causes frequent changes in customers’ demands and choices. Companies have to provide their customers with the latest products and services to come up to the expectations of their clients, since otherwise brands shifts are caused. The chosen company is a ship broking company that acts as the intermediate source between the ship owners and clients who want to transport their goods by means of ships. The clients present their requirement of the delivery time and the amount of dry commodities that are required to be transported. The sales executives of the chosen company browse through their database of ship owners whose service attributes and routes comply with the requirements of the client. The status of the shipment orders are tracked by the shipment tracking department until the orders reach their destinations. An interview was scheduled with the management executive who headed the technological change in the company. The analysis of the company’s transition towards technological infrastructure gave useful information about the strategies that are adopted in the real world. Journal papers, articles and organizational reports were also studied for the theoretical information about the respective topic. 2. Drivers of Change According to the information provided by the executive, the drivers of the change in the company can be categorized into two types; internal and external. 2.1 Internal Drivers The sales executives had to access the database of the ship owners whenever a shipment request was received from a client. It involved excessive traversals through the database and extensive calculations of several factors such as shortest route, cost effective route and rates of the routes. Such processing consumed lot of time of the sales executives, due to which they could not cater all the requests from the clients. Denial of service to clients often led to more business for the competitors. The calculation of the routes and costs was not always error-free since it involved manual processing. The shipment tracking department did not have a reliable system to track the status of the orders. Another aspect that led to the technological intervention in the company, involved the lack of any software application or tool to evaluate the performance of the company. The top management had to rely on the reports that were generated by the respective departments; these reports were manually made after the accumulation of figures for generated revenues, losses etc. The technological change had been a part of the company’s long term goals but never materialized since the top management was not totally committed to the cause. An organizational change cannot prove to be productive for the company if the support of the top management is not present (Joanne 2002). When the external, as well as internal factors accumulated, the top management decided to fully commit to the technological change in the company. 2.2 External Drivers Other companies in the ship broking industry had started to focus on the technological integration in their companies. The market positions of the competitors started improving since they were able to cater to more clients and earn more profits due to their organizational change. Clients of the modern times even prefer technological processes and operations since they are error free and fast-paced. External changes play a vital role in signaling the need for changes in the internal processes of the organization (Mackenzie n.d.). 3. Perspectives of Change Three systems were planned to be deployed in the organization. The relevance and aims of the organizational change are explained below: Automated Routing System (ARS): Automated routing system was adopted to facilitate the calculation of the routes with respect to the provided source and destination. The sales executive would be presented with all the possible routes and costs about the combination of the source and destination in mere seconds. Such automated processing and computation would improve per customer service and provide error free results. The top management would be able to generate reports with respect to aspect of the company. More clients were aimed to be catered after the adoption of the system which would eventually increase profits. This system was also meant to facilitate the shipment tracking activities since one aspect of the system would track the shipment orders and provide accurate information in response to the client’s request. Single View Customer (SVC): Single View Customer was adapted to ensure that all the data of the ship owners and clients would be maintained at one place with extensive information of their previous orders. This software was deployed to facilitate fast search and analytical operations on the data. The sales executives would be able to access the system during their sales deals and provide special discounts by evaluating the status of the customer, for example, if a client is a frequent customer then he might be able to get discounts on shipment orders. Customer service department had access to the system to maintain healthy business relations with the clients. Such strategy was aimed to keep the customer satisfied, avoid any instances of brand shifts and retain the market share in the industry. 4. Change Strategies The chosen company chose to bring about a technological change in the company. Changes of such nature are termed as ‘innovative changes’ since they are introducing a new practice to the organization (Farias 2011). Luo (2006, 22) stated that the success of these changes are evaluated with respect to their adoption rate. These kinds of changes create a certain level of uncertainty for the adopters in terms of the effects of the change on their worth in the organization. 4.1 System Deployment Strategy The foremost decision that takes place in the case of an innovative change is regarding the strategy of the deployment of the systems. Usually, companies have to make a choice from two main options of off-the-shelf software or customized off-the-shelf software (COTS) (Galorath 2006). The latter strategy produces effective results when an internal IT department possesses the necessary skills to modify the software according to the needs of the business. The respective company adopted the latter strategy and chose the most appropriate off-the-shelf components that could be customized by the IT department. This strategy did not produce effective results for the company. On the contrary, it became a liability since the internal team was not able to customize the components according to the expectations of the management. Upon the failure of the COTS strategy, the management decided to opt for the most fitting off-the-shelf software available in the market. 4.2 Strategies for Different Phases of Change According to Levasseur (2001, 72); Lewin’s change model consists of three phases that should be adapted by organizations to ensure the success of any change in the company. Unfreezing: requires the management to communicate the importance of the change to employees, at all levels of the hierarchy. These actions reduce the vibes of insecurity that might be prevalent in the organization after the disclosure of the plans of the change and even prove to increase the motivation level of the employees to accept the changes. Changing: involves the actual changes that are adopted in the organization. New methods, processes, perspectives are communicated to the concerned employees to bring about the desired change in the company. Training sessions are also conducted to facilitate the new procedures and systems for the employees. Refreezing: The management helps and motivates the employees to make the changes as a part of their routine operations and business processes. Policies and procedures might be established to ensure that the system gets incorporated with the routine operations. William (2003, 25) also categorized an organizational change into three phases; ending, neutral zones and beginnings. These phases involve similar strategies and actions of addressing the problems and fears of the employees due to the upcoming changes in the company. With respect to the change at the chosen organization, the planned incorporation of technology was communicated to the employees by the announcement of a deadline for the transition. This shows that an authoritative approach was used by the management. The employees were expected to be familiar with the new system by a designated date since the old systems were planned to be replaced by that time. This strategy added pressure on the employees and thus created an environment of resistance towards the change. Therefore, it can be stated that the company did not undergo the phase of ‘unfreezing’ or ‘ending’. However, the management adopted the strategies that are promoted in the ‘changing’ or ‘neutral zone’ phase. The concerned employees were provided with all the support manuals and guidelines that would prove to be useful for the transition. Training programs were also arranged to ensure that the employees would become acquainted with all the features and functions of the systems. Even after repeated efforts by the organization, the systems could not be integrated in the routine operations of the company. It is due to this resistance that the company adapted the strategy of issuing policies for the usage of the systems. These policies made the systems usage mandatory for all the employees. The usage started being tracked with respect to the login times and the functions that were being performed on them. In this way, the management achieved the main aim of the ‘refreezing’ or ‘beginning’ phase, although it was attained in a dictatorial approach. 5. Critical Analysis Certain variations of behavior are witnessed among individuals whenever they undergo any change in their environment (Grizzell 2003). The change of behavior is defined in terms of two forces; restraining and driving. Restraining forces are the ones that inhibit the processes of change and direct the individuals towards the opposite side, whereas driving forces facilitate the change and drive the individuals towards the acceptance of the change. The chosen organization did not aim to decrease the restraining forces by addressing any insecure feelings and communicating the relevance of the change for the productivity and performance of the company, rather only aimed to increase the driving forces like providing them with guidelines and training programs. A successful change requires a combination of both of these forces (Grizzell 2003). The management of the chosen company adapted an authoritative approach to introduce the innovative change in the company, rather than a facilitating one. The relevance of the system was never communicated to the employees who were expected to be affected by the change. No positive reinforcements were utilized to integrate the systems in the business processes of the company. The chosen company chose the option of COTS for the deployment of the systems. The company should have assessed the technical expertise of the IT department before the formulation of the decision. Careful analysis of their work experiences would have saved the company from any wastage of time or resources. 6. Alternate Strategies Change is never accepted instantly by individuals. They undergo different phases of behaviors and states that eventually lead them to the acceptance of the change. It is important to follow the steps that are required to introduce the change since otherwise individuals start repelling the change. Kotter (1996, 15) devised a comprehensive list of actions that should be performed during any organizational change; Create urgency for change: The relevance of the change should be communicated to all levels of employees so that the real value of the change can be appreciated. Create a coalition group: Try to motivate a small group of people who have the quality to lead other colleagues towards a certain direction. Create a clear vision of change Communicate the vision at all levels Remove the obstacles: Identify the obstacles and people who might be resisting the change. Adopt appropriate strategies to remove the barriers. Create short term goals: Set short term goals for the employees to make them appreciate the change and benefits of the transition. Stabilize the change and build on it: Don’t consider victory too soon as changes take time. Continue efforts to perform better and achieve higher goals with the power of the changed system. Appreciate the changes in the company to ensure constant support for it by the employees. These steps are complete and comprehensive since they cater the human aspects as well as the management aspects of the change. Baekdal, Kim, Todbjerg, Mikkelsen (2006, 5) agreed that communication and addressing the concerns of the employees prove to be effective in the process of introducing an organizational change. Companies tend to ignore the human aspects of the change, just like the company under discussion, although human behaviors and reactions bear great relevance in any organizational change. These steps guide the management in an incremental manner towards the attainment of a successful organizational change. 7. Conclusion and Recommendations An extensive research study on the management of organizational change and the case study of the chosen company highlights the need to be attentive to human behaviors and concerns as much as the steps taken to incorporate the change in the routine operations of the business. Employees do not prefer changes in their environment or nature of work therefore they need to be convinced and motivated to make the transition to the new practices by means of a facilitating tone, rather than an authoritative one. In the presence of resistance, even if the change is incorporated in the organization it will not serve to improve the performance or the level of productivity. On the contrary, if employees are committed and motivated to introduce the change in the organization then the resulting productivity will be much higher. The chosen company chose a dictatorial approach to handle the organizational change, due to which repeated acts of resistance were faced. The chosen company underwent a technological change; such changes create a level of insecurity among the employees. The chosen company should have taken extensive measures to make the people understand that the technological change would not initiate any layoffs in the organization. During an organizational change, the managers also get effected by the variations that might be done in the infrastructure, job descriptions etc, therefore the top management should have communicated the relevance of the change at all levels of employees rather than simply communicating the factors till the managerial levels. References Baekdal, Thomas. Kim, Hansen. Todbjerg, Lars. Mikkelsen, Henrik. 2006, Change Management Handbook, Baekdal. Bridges, William. 2003, Managing Transitions, Making the Most of Change 2nd edition, Da Capo Press. Farias, Eduardo (2011), “Managing Change”, PowerPoint lecture notes, Universidades en Londres. http://www.angelfire.com/ak6/organizational_behav/lecture11.pdf Galorath, Dan. 2006, Software Reuse and Commercial Off-the-Shelf Software, Computer Aid Inc. Grizzell, Jim. 2003, “Behavior Change Theories and Models”, Lecture notes, California State Polytechnic University, Pomona, http://www.csupomona.edu/~jvgrizzell/best_practices/bctheory.html Joanne Mowat, 2002, Managing Organizational Change, The Herridge Group. Kotter, John P. 1996, Leading Change, Harvard Business School Press, Boston. Luo, John. 2006, Technology Adoption: Managing Change, Primary Psychiatry 13(8):20-23. Levasseur, Robert. 2001, People Skills: Change Management Tools- Lewin’s Change Model, Interfaces 31(4):71–73. Mackenzie, Maureen. (n.d.). Senior Leadership’s Role in the Change Process, Townsend School of Business, http://www.dowling.edu/faculty/Mackenzie/docs/change.pdf Interview Q1: What are the main functions of the company and what type of change was introduced in the company? Answer: Company X is ship broking company that serves as an intermediate source between the ship owners and clients who wish to transport their dry bulk commodities to any destination in the world. The head office of the respective company is in Perth, Australia. Technological integration has been one of the milestones in the vision of the company since number of years. However, the execution of this aim had been limited. Q2. Why was the change not being implemented if it was a part of the company’s vision? Answer: It was a part of the long term plans and vision of the company but the top management was not entirely committed to the transition. Q3: What were the driving forces behind the initiation of the change in the company? Answer: There were several causes of the technological integration in the company; The competitors in the market started opting for technological tools and systems to automate their business processes and operations. The improvement of their market shares made us realize that it was time to embrace the change. We maintain large database of ship owners including their routes, vessel positions, rates, company details etc whereas information about the clients, who wish to charter ships for transporting their goods, are also entered in our databases. It was a tedious activity to traverse through the data files to find the data corresponding to the needs of the ship owners and clients. These processes consumed lot of time and it also caused errors and miscalculations in the determination of the costs and routes for the clients. There also lacked an effective system to track and present the status of the shipment orders with respect to their location. There was no effective tool available that could facilitate quick analysis of the data and generate reports to form the basis of strategic planning. Q4: What was the actual change planned for the company? Answer: The technological change involved the adoption of innovative systems of Automated Routing System (ARS) and Single Customer View (SVC). The whole company was expected to be effected by that change since the systems involved changes in the sales department, shipment tracking department, customer service department and IT department. Q5: What was the main vision of this change in the company? Answer: The main aim and vision of this change was to improve customer service and earn greater market share; sales department would be able to provide them with timely and accurate routing information, customer service department would be able to maintain healthy business relations with the customers, ship tracking department would be able to provide accurate information to the customer and diagnose issues in a timely manner. Top management would be able to evaluate the performance of the company due to the availability of relevant information Q6: What considerations and strategies were adapted to introduce the change in the company? Answer: A deadline was given to the employees for the deployment of the systems in the organization and to become a part of the daily operations. The new job descriptions (with respect to the incorporation of technology) were handed over to the head of the departments. Training sessions were arranged to ensure that the employees feel comfortable with the new systems and the IT department would be able to perform the maintainability operations of the system. Q7: Were any difficulties witnessed during the adoption of the new systems? Answer: A setback was witnessed in the development of the systems when off-the-shelf software was decided to be customized by the IT department of the company. Upon repeated failures, it was decided to change strategies and only opt for the most appropriate off-the-shelf software. Earlier, the change was resisted more by the employees and they were not as receptive to technological changes as expected by the management. After repeated acts of resistance from the employees, the management felt the need to issue policies for the use of the systems. Thus, it became mandatory for all the employees to use the systems; their usage was tracked by their login durations in the systems and the respective activities performed on them. Read More