Changes in the Commercial Organizations - Essay Example

Case Study Introduction In the contemporary days, commercial organizations are continuously confronted with a need for transformation. Waddell, Cummings and Worley (2011) purport that in a world characterized with high levels of inconsistencies, unpredictability and complexity, the only thing that remains constant in commercial organizations is change. Commercial organizations that wish to survive and remain successful in the present day commercial arenas must be committed to engage in a process of constant organizational development and adapt to environmental and commercial transformations that influence the firm (Parker, Verlinden, Nussey, Ford and Pathak, 2013). In spite of the importance of organizational change for organizations in the contemporary day, few firms are able to come up with leadership and management styles as well as organizational cultures that will enable the organization to maximize on opportunities and minimize the threats it faces in the commercial realms. Waddell et al (2011, p. 34) posit, “Researchers have proposed that applying organizational development in different countries requires a ‘context-based’ approach to planned change. This involves fitting the change process to the organizations’ cultural context, including values held by members in the particular country or region. Thus, the traditional approaches to planned change may promote management practices that conflict with the values and assumptions of other societies”. This paper will investigate the truth of this statement by analyzing the process of change management in Coca Cola. This will be followed by a thorough analysis of the concepts of organizational development and change management in organizations. At the end of the paper will be a conclusive summary and a list of the references cited herein. Case Study: Ccoca Cola Asa Candler established the Coca Cola Company- whose headquarters are at Atlanta, Georgia in the United States of America in the year 1892. The Coca Cola Company is a global manufacturer, retailer and marketers of non-alcoholic beverages. The company is known internally particularly due to its soft drink known as Coca Cola (The Coca Cola Company Press Center, 2013). Currently Coca Cola Company has business operations in more than 200 different nations of the world and produces an estimated 500 brands of beverages and non-beverages. Coca Cola is comprised of business model with two different businesses-the Coca Cola Ltd and Coca Cola Bottling Company (The Coca Cola Company Press Center, 2013). The company has at least 139,600 employees globally. In the year 2010 the company made a total net income of an estimated 11.8 billion US dollars; in 2011 the total net income was $ 8.63 billion and in 2012. It is noteworthy that Coca Cola Company is one of the oldest commercial entities in the world and that it has undergone several processes of organizational transformations over the centuries. In order to survive the external and internal transformations that impact the company, the management of Coca Cola Company in different parts of the world have formulated and applied effective techniques of change management (The Coca Cola Company Press Center, 2013). A major change event in Coca Cola Company occurred on July 30 2012 when the company made public a new operating structure in the organization as well as new appointments to senior leadership positions. The company transformed its operating strategy and organized it around three main operating businesses, that is, Coca Cola Americas, Coca Cola International and Bottling Investments Group (The Coca Cola Company Press Center, 2013). These changes were effected on 1 January 2013. The Chairman and Chief Executive Officer of Coca Cola- Muhtar Kent- stated that the main reason for these transformations was to ensure that the company had the right operation structure set in place to ensure that it achieved the company’s 2020 vision. The change event in Coca Cola Company was inevitable since the company has to respond to the transforming demands of the global market place in which it operates (The Coca Cola Company Press Center, 2013). Organizational Development According to Waddell et al (2011), organizational development refers to the application of knowledge on behavioral science to the process of planned development as well as the improvement of organization processes, structures abs policies for purposes of enhancing the general performance of the organization (Shockley-Zalabak, 2012). Simply put, organizational development refers to the planned sets of procedures applied in the transformation of an organization’s culture. The process or organizational development is different from other types of organizational change in several ways. Firstly, the process of organizational development is a system wide process, which applies to the entirety of an organization, department or firm. This strategy is different from other forms of organizational change, which are focused on individual aspects in the system. Secondly, according to Wesner (2010), organizational development is founded upon knowledge from the theory and practice of behavioral science; such knowledge includes aspects such as work design, leadership, organizational strategy and international relations (Mathews, 2011). Thirdly, organizational development is concerned with planned change. Planned change refers to the organizational transformations that are necessitated by a need to react practically to opportunities or challenges faced by a commercial organization in its external environment; planned change may also be aimed at preparing a business firm to respond to likely problems which are expected in the firm’s future (Darling, 2009). Organizational development is characterized by the formulation and corroboration of organizational transformation (Waddell et al, 2011). Because of this, the process of organizational development is characterized by policy, framework and sets of procedures regarding the change process. The focus of organizational development is the enhancement of organizational efficacy and effectiveness (Alnaweigah, 2013). There are many benefits, which are associated with an effective organization; such a firm is able to direct its resources and time on the attainment of set organizational objectives as come up with successful solutions to existent or emergent challenges in the organization (Shockley-Zalabak, 2012). Effective organizations also tend to be very productive and characterized by high levels of performance. Theories of Organizational Development As purported by Abu-Hamour (2012), there are two main theories of organizational development; these are the change process theory and implementation theory. Change Process Theory The main objective of the change process theory is describing the techniques and strategies through which the process of organizational transformation and enhancement occur. The change process theory is comprised of the three stages described in Kurt Lewin’s three-stage theory of planned change (Diamond, 2008). These are Unfreezing-Change/Transition-Freezing. The unfreezing stage is that in which people in an organization are persuaded to perceive the need for a change and embraced the proposed organizational transformations. The change or transition phase is that in which the organizational transformations are implemented. The last stage is concerned with establishing support systems to make implemented changes permanent. Implementation Theory The main purpose of implementation theory is to focus on particular intervention processes, which are aimed at bringing about transformations (Parker et al, 2013). There are four main interventions recognized by this theory; these are techno-structural, human process-based, socio-technical and large systems. Approach of Organizational Development A characteristic organizational development approach utilized in the negotiation of organizational transformations is comprised of four main steps; these are diagnosis or problem identification, action planning, intervention and evaluation (Shockley-Zalabak, 2012).  Problem Identification This is the step in which an organization carried out a diagnosis aimed at making out the issues in its structures which impede its effectiveness. The root causes of these issues must also be identified (Diamond, 2008). Problem identification may be carried out by use of surveys or through the enlistment of outside experts. Action Planning It is at this stage that strategic solutions are generated to respond to the identified problems (Abu-Hamour, 2012). The different solutions and change strategies are analyzed in order to come up with the most practical ones. Intervention At this stage, the steps involved in the change process are elaborated and the progress of the organizational transformation monitored (Abu-Hamour, 2012). The change agent must also ensure that they cultivate and acquire the support and commitment of relevant stakeholders. Evaluation After the change process has been implemented, it is very important to assess the process of planned organization and its implementation as well as the impacts of outcomes it has on the organization. The findings should be documented (Lyons, Jordan, Faas and Swindler, 2011). Change Management Kotter (2011) claims that the main difference between change leadership and change management is that while change leadership is the vision for the transformation, change management refers to the tasks, processes, tools and methodologies which characterize the change process. According to Waddell et al (2011) a successful process of change management is comprised of five main activities; these are (1) motivating change, (2) creating vision, (3) obtaining political support for the change process, (4) managing the change/transition process and (5) sustaining momentum. Motivating Change The process of motivating change in commercial organizations requires that the leaders of change prepare members of the organization for the anticipated organizational transformation (Langley, Smallman, Tsoukas & Van De Ven, 2013). One of the main processes in creating readiness for organizational change is ensuring that members of the organization are sensitized on the need for change (Walinga, 2008). The change leader is tasked with the responsibility of making the organizational members aware of the gaps that exist in the current state of affairs as compared to the desired organizational circumstances (Diamond, 2008). After the members of the organization have realized the importance and need for change, the change leader must sensitize them on the benefits and advantages that will be enjoyed because of organizational change (Lewis, Laster and Kulkarni, 2013). Creating a Vision According to Diamond (2008), effective change management requires the change leader to formulate a vision and inspire the rest of the organization into accepting it. This process is very simple for leaders with referent power since they can easily persuade and convince members of the organization. In creating a vision, the change leader must clearly explain the core philosophy of the organization as well as the organization’s main goals (Smets, Morris and Greenwood, 2012). The change leader then describes the desired outcomes and future state of the organization because of the process of organizational transformation. The formulation of a clear vision ensures that the members of the organization have a clear picture of what they are expected to achieve through the process of change. Managing Political Support Battilana and Casciaro (2012) posit that the process of organizational change will rarely succeed in instances where there is an absence of political support from within and outside the organization. A change leader must analyze change agent power and make out the most important stakeholders in the organization who influence the change process (Shockley-Zalabak, 2012). The sources of power for the change agent originate from their personality, the information and knowledge they possess and their utilization of social networks to obtain support for the process. After identify these stakeholders, the change leader makes it their business to influence them into accepting and supporting the change process. Managing the Change Process Effective change management necessitates that the change agent or leader creates a roadmap for the process of organizational transformation. The activities that need to be carried out as well as each organizational member’s duties and responsibilities are mapped out at this stage (Walinga, 2008). The change agent must ensure that the members of the organization as well as the sources of power in the firm are arranged in a manner that is supportive of the change process. The process of organization change is perceived as a transition from the current state of the organization to the transition stage and finally the desired future state. Organization Communication Competencies Organization communication competencies entail individuals in an organization or company displaying a number of attributes. It is essential for individuals in an organization to show good faith as well as commitment. Competence is all about caring about what other people feel or think. It is of great importance for people to have faith in one another. Shockley-Zalabak (2012) indicates that employees on the company are not fully trusted by the company’s management or inner circle. Similarly, communication competence entails people showing empathy. It is essential for people working together to be able to view situations from their colleagues’ perspective. This also entails one aligning his or her goals with the goals of the others. This attribute leads to people acting in good faith. They are also able to listen to one another hence effective communication. One factor that leads to poor communication is one party working under the assumption that they know it all (Shockley-Zalabak, 2012).  Workplaces also require of people to show flexibility when communicating to ensure competence. It is imperative for them to display different communication capabilities to be able to handle different situation. This also means that they should be able to view things in different perspectives. Rigidity means that they only be able to handle a problem using certain tactics. This also limits their ability to deal with challenging situations that might require critical thinking (Shockley-Zalabak, 2012).  Communication competence also entails people in the workplace ensuring appropriateness when conversing with others. They must ensure that their behaviors are not only appropriate for them but also when judged by others. This leads to others responding in kindness hence the company is able to achieve the required results. Lack of appropriateness leads to others resisting whatever it is one might be trying to communicate hence the message may not be delivered in the desired manner. With this being the case, the company or organization may also not be able to achieve its goals and objectives (Shockley-Zalabak, 2012).  Equally, communication competence entails a communicator being sensitive to the consequences. He or she is always aware of the fact that an action can lead either to positive results or to negative results. In addition, people in the workplace should display this attribute. There are incidences when they will be able to achieve brilliant results through communication. There are also times when they will be able to achieve miserable results. Either way, they should be able to learn from the same hence their ability to communicate even better in the future. Individuals also need to display feedback skills to be able to communicate in a competent manner. Communication is not complete until the other party provides feedback. This is the only way one can be able to tell on whether or not the communication was successful. It also enables the communicator to understand if the other party was able to get the right message. Clarity is also one of the communication traits that should be ensured by people at workplace for best performances. One of the major reasons communication failures is lack of clarity. There are individuals who communicate in a fast manner hence may not be able to deliver the message in the desired manner. Such individuals also fail to communicate in a clear manner hence the other party may not be able to understand the message hence hindering organizational development. Sustaining Momentum In order for the change process to attain the desired outcomes, it must remain continuous; the change agent must make certain that necessary support systems are put in place to ensure that the organization does not regress to its previous state (Lewis et al, 2013). Members of the organization must be provided with the necessary training and coaching to equip them with the new skills, competencies and skills that they require to sustain the organizational change. Resistance To Change It is not uncommon for the employees in commercial organization to oppose-directly or indirectly- the process of organizational transformation. In fact, resistance to organizational change is one of the main reasons for the stagnation or failure of proposed transformations in business firms. Resistance to organizational change may emanate from inside or outside the business firm; this implies that the employees in the organization, as well as the customers, supplies and business agents affiliated to a firm are very significant in determining whether a process of organizational change will be successful (Pardo-del-Val, Martínez-Fuentes & Roig-Dobón, 2012). Causes of Resistance to Change There are several reasons why the members of a commercial organization may resist organizational change. One of the main reasons is that human beings are naturally apprehensive of new ideas (Walinga, 2008). Employees in the organization have already created a comfort zone for themselves and it will be uncomfortable to adopt a new set of conditions as proposed by organizational transformation. Some of the resistance to organizational change may emanate from the fact that employees in the organization are uncertain of their ability to understand the proposed transformations or even cope in the new working environments. As a result, workers resist the transformation process in the firm in order to avoid failure, misinformation or the embarrassment of lack of knowledge (Walinga, 2008). Some influential members of the organization-such as those in senior positions- may oppose the change process because the current state of affairs in the organization benefits them in one way or another; any transformations in the organization would erode the current status quo and mean that they can no longer enjoy perceived benefits. Merrell (2012) asserts that agents of change in organizations must be aware of the fact that the process of organizational change is rarely successful when the change process is imposed on members of the organization, instead of persuading or convincing them to accept and embrace it. When change is forced the members of the organization feel coerced and their levels of lack of control and powerlessness increase considerably. Model to Deal with Resistance to Change The most common model applied by change agent in dealing with resistance to organizational change is the Six Change Approaches by Kotter and Schlesinger. This model is structured to prevent or reduce the levels of resistance to change by workers in an organization. The model is very effective in different types and sizes of business firms since it responds to issues regarding resistance to change, for instance, low levels of tolerance for change, misunderstanding, and employees’ conflicts with reasoning and self-interest (Shockley-Zalabak, 2012).  Evaluation For Coca cola Company to realize and meet the changes, it has to establish various strategies of achieving the targets. Employees have to be employed in the changes by taking part in the participation of the changes. There is need to communicate the management programs to the people effectively by educating them about the benefits the program would bring if they are incorporated. The company should also negotiate and agree with the important stakeholders by having relevant ideas and information about the practices. It should develop a proper cannel to meet all the people including those with disability problems to adjust to the changes. The company should minimize costs through economies of scale, reduction of material cost, standardization and implementation of new technology. In addition, being innovative helps in maximizing profitability and competitiveness. Nevertheless, the company’s products are reasonable and are broadly accepted leading to a widened customer base. Conclusion This paper has investigated the truth of the statement by Waddel et al (2011) through analyzing the process of change management in Coca Cola. This was followed by application of relevant theoretical models in the thorough analysis of the concepts of organizational development and change management in organizations. The issue of resistance to change has also been examined. References Abu-Hamour, H. 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Retrieved on November 18, 2014 from: http://www.coca-colacompany.com/press-center/press-releases/the-coca-cola-company-announces-new-operating-structure-and-senior-leadership-appointments Waddell, D, Cummings, T G & Worley, C. G. (2011). Organizational Change: Development and Transformation. Cengage Learning Australia. Walinga, J. (2008). “Toward a Theory Of Change Readiness: The roles of Appraisal, Focus and Perceived Control.” Journal of Applied Behavioral Science, 44: pp. 315-347. Wesner, M. (2010). “Organizational Learning: The Enduring Influence of Organization Development.”Organization Development Journal, 28(3): pp. 39-44. Read More