Organizational Leadership and Change - Kurt Lewins Change Management Theory - Case Study Example

Organizational Leadership and Change Table of Contents Introduction 3 Main Body 4 Kurt Lewin’s three phase change management theory 5 Conclusion 7 Recommendations 8 References 10 Introduction Leading organizations around the globe are trying to achieve potential competitive advantages through the implementation of effective strategies. The global financial crisis and economic recession has affected the global business environment. Employee cut, high unemployment rate and economic slowdown are the major consequences of the economic slowdown (Kapstein, 1996, p.13). Microsoft Services considered as the Information Technology support, consulting and strategy division of Microsoft. The mission of the organization is to lead the industry, serve the people and make unique differences for the business partners. The organization became popular due to its innovative product and service differentiation (Honold, 1997, pp.22-24). However, recent financial crisis forced the organization to implement major restructuring and change process. They implemented reduction in-force strategy to overcome the impact of economic challenges. In the year 2009, the financial crisis affected the service business of Microsoft in Asia (Ang, 2012, pp.12-13). The organization terminated numerous employees like those associated as support staffs and consultants. Inadequate implementation of retrenchment theory and change management process developed several critical issues. These workplace conflicts reduced the image and reputation of the organization in global market place. This reduction-in-force strategy reduced the motivation level of the employees. This change management concept increased job insecurity of employees (Greenhalgh and Rosenblatt, 1984, p.8). However, after an open discussion, the organization tried to develop several sustainable strategies in order to maintain its brand image within the global market place. Kurt Lewin 3 Phase Change management Theory and Retrenchment Theory have been implemented in this study to evaluate the strategies of Microsoft Service Asia. Finally the study will propose some recommendation plans for improvement and change. Main Body There are various issues the Microsoft Services Asia is facing after the major restructuring took place in the organization. In 2009, the financial crisis occurred through all over the world. Due to of this financial crisis, many workers were laid off. The organization’s morale was all time low; even the general managers were also replaced. Employees were highly dissatisfied and de -motivated due to the strategies taken by the management. Organization takes retrenchment strategy when they have to reduce their cost. In this strategy, organizations reduce the overall size and diversity of the operations. The goal is to get a stable financial growth by cutting down the expenses. The organization follows a contraction of its activities by reducing one or more functions or eliminating the scope of business. For example, one company, as a part of retrenchment strategy, can focus only on a single segment of a business which gives it a higher revenue opportunity. For example a hospital can focus only on the special theatre and ignore the general theatre because the special theatre provides them better revenue. During the retrenchment, the company follows change management strategies after a little discussion with the employees. It was the first time; the company reduced 20% of its workforce. The sudden workforce reduction of the company had a huge negative impact on the employees mind. The overall situation was very frustrated and uncertain. The employees were highly de-motivated that even after 6 months of the incident, the employees were talking about the workforce reduction. Significant drop was noticed in the workgroup health index (WHI). WHI is an index used to measure the employee engagement and leadership. The results of WHI indicated that Microsoft scored 76 points only and it was the record failure of the company. The company judged their leaders on the basis of the WHI scores. Company set a benchmark of score 80 as evaluation criteria. Below 80 signifies the stagnation in the employee carrier and high dissatisfaction. Perennial issues, work-life balance issues were not solved for last 2 years. There was a gap between the clarity of employee contribution and the rewards and recognition. The employees were again dissatisfied for the reason that, the amount of employee contribution towards the organization and the recognition from the organization was not equal. Simply, employee dissatisfaction arisen because the company was not recognizing them. The Change Management issue that was implemented on the organization has been explained through the theory. Kurt Lewin’s three phase change management theory Kurt Lewin’s three phase change management theory is a universally accepted theory. The three step model is a very essential part of Change Management strategy. There are 3 phases in this model. In 21st century everything is changing very rapidly specially the consumer’s lifestyle. To adopt the new strategies organization also needs to change its structure and culture. The three phases of Change Management strategy- Unfreezing, Transition and Freezing are very relevant strategy today. Unfreeze Unfreezing is reducing the work force of an organization. The typical human behaviour is to resist towards change. Human being never likes to change from his current status. For Unfreezing an organization, a provocative problem needs to be analysed with the employees. So that the employees would feel for a change and they would come up with some new solutions. The problem here works as a catalyst. The success of Unfreezing depends upon the successful communication model (Burke, 2010, p.24). For example, from a customer feedback survey, a restaurant manager can identify the problems of the service and he can feel to change. From an employee attitude survey, the manager can understand the low morale signal of the organization and can feel for a change. By these two examples, the way of Unfreeze model is explained but in reality, it is very difficult to convince the employees to accept the change (Buelens, Sinding, Waldstrom, Krietner, and Kinicki, 2011, p.59). Many risks are associated with any kind of change and employees are scare about the unknown risks associated with the Unfreeze step. For the acceptance of change educating the employees are needed. Change should not be done for the sake of change only. For that intense internal and external market research is required. One needs to show the bad outcomes of the current state to make the people understand about the change. The employee should understand that the changes are happening because of their long term welfare. Overall frequent and regular communication should be maintained. Microsoft Service Asia was lacking in this respect. Transition In this section, the focus is given to alter the behaviour of the departments or the individuals in which the change will take place. The behaviour of people will initially be mechanical but when they will understand the benefits occurred due to the changes, they will become a part of the change (Bell, 2008, p.76). But this process is a time consuming and lengthy process. For successfully implementing this strategy, people will need time to engage but through the proper communication everything is possible. Involvement, communication, empowerment of people is the key success of the Transition. Freeze When the strategy, structure and people all the elements seems okay, when things are looking good then the time comes for locking the scenario. In the time of freezing recognition is very important (Boxall and Purcell, 2007, p.178). Those people who have worked hard to make a success story, one should always recognize them properly. It is a standard process of change management. For consistently following the change, it is important to follow the reward system systematically. In the above analysis of change management, it is clear that Microsoft Services Asia failed to follow proper guidelines of Change Management. Firstly, there was no such communication with the employees from the higher management side. Suddenly all the changes happened (Buchanan and Hucczynski, 2010, p.42). The employees were not happy with the structure. The communication process was not proper and some of the group of employees were reporting directly to the US office though they were the representative from Asia. Conclusion Restructuring and change processes are the valuable operational strategies that help the organization to avail potential competitive advantage within the competitive market place. It is true that, recent financial crisis have forced the organization to implement reduction in-force strategy. They tried to overcome the negative effects of financial crisis and economic recession through this strategy. However, the organization failed to overcome issue as this strategy generated several workplace conflicts (Senior, and Swailes, 2010, p.43). Job cut or loss of payment or inadequate reward distribution is not at all an appropriate solution. The organization should foresee the plans before implementing it. Employees are key assets of organization. In addition, the organizations believe in employee engagement. This unethical operation strategy can reduce the business performance’ and brand reputation. Moreover, the organization can lose the shareholders interest that can affect the financial structure of the organization. However, the organization needs to review the plans and strategies and re-implement it to avoid future chaos. Recommendations It is clear from the above discussion that the organization is suffering from several workplace conflicts and challenges. Following recommendation plans will help the organization to improve their plans and strategies. Lack of effective communication between the employees and top management of the organization is the major reason behind the workplace conflict. Lack of communication can affect the business performance and organizational culture. Microsoft Service Asia needs to involve a consultant in the organizational structure who can take care of the opinions and complaints of the employees (Noble, 1999, p.21). Moreover, implementation of flatter organizational structure can reduce the communication gap between the upper and lower level of the organization. The organization needs to improve employee engagement activities. Employees are the strongest assets of organizations. Core competence and effective skills of employees can drive the business towards success (Roskies and Louis, 1990, p.13). Therefore, it is important for Microsoft Service Asia to align the potential employees to a common organizational objective. The organization needs to appoint effective supportive and delegating leadership strategy in which the organization can motivate the employees to perform effectively (Northouse, 2010, p.76). Termination or job cuts are not the ethical solution of economic challenges. Therefore, the management should review the plans and appoint leaders accordingly. The organization needs to influence and encourage the managers to drive effective communication within the organization (Huczynski, and Buchanan, 2010, p.109). According to the organizational value, Microsoft always takes care of the employees’ basic needs. Therefore, it is important to maintain the business ethics to maintain its leading spot in the industry. Last but not the least; the organization needs to provide empowerment to the potential employees who have effective decision making ability (Gomez and Rosen, 2001, p.10). Effective employee empowerment will enhance the rights of the employees that can force them to provide effective performance. It will help the organization to maintain friendly workplace environment and significant business performance. References Ang, J., 2012. Communication at Microsoft Services Asia. International Journal of Organizational Behaviour, 32(2), pp. 12-13. Bell, G., 2008. Perceptions of Organizational Change from inside a School District-Wide Reform Process. Cambridge: ProQuest. Boxall, P. and Purcell, J. 2007. Strategy and human resource management, London: Palgrave Macmillan, 2nd edition Buchanan, D. and Huczynski, A. 2010. Organizational Behaviour. Harlow: Pearson Buelens, M., Sinding, K., Waldstrom, C., Krietner, R. and Kinicki, A. 2011. Organisational Behaviour. Berkshire: McGraw-Hill Education Burke, W., 2010. Organization Change: Theory and Practice. London: Sage. Gomex, C., and Rosen, B., 2001. The Leader-Member exchange as a link between managerial trust and employee empowerment. Group & Organization Management, 16(3), p.10. Greenhalgh, L., and Rosenblattg, Z., 1984. Job Insecurity. Academy of Management Review, 12(4), p.8. Honold, L., 1997. A review of the Literature on employee empowerment. Empowerment in Organizations, 21(3), pp.22-24. Huczynski, A., and Buchanan, D., 2010. Organisational Behaviour. 7th edition. London, Prentice Hall. Kapstein, E., 2006. Workers and the World Economy. Foreign Affairs, 12(3), p.13. Noble, C., 1999. The eclectic roots of Strategy implementation Research. Journal of Business Research, 8(3), p.21. Northouse, P., 2010. Leadership: theory and practice. 5th ed. London, Sage Publications. Roskies, E., and Louis-Guerin, C., 1990. Job Insecurity in Managers. Journal of Organizational Behaviour, 17(1), p.13. Senior, B., and Swailes, S., 2010. Organizational Change. 4th edition. London, Prentice Hall. Read More