Managing & Leading Change - Essay Example

Introduction The current case analysis is undertaken following the organizational development (OD) Model for Change, as proposed and modified by Senior (1997) and Hollings (2002) respectively. In accordance with the model, there will be five (5) major aspects of the paper, the first of which gives a background to the company and is made up of the past, present and future states of the company. The second aspect touches on gained commitment to the vision of the company, whiles the third aspect is on the development of an action plan for the company. The forth aspect looks at the implementation of the change, while the final aspect is on the assessment and reinforcement of change. However, for the sake of clarity and ensuring that the presentation is orderly, only the first three stages are going to be considered. Whiles writing these three major stages, a minimum of organizational development theories, concepts and models are going to be critically analyzed in relation to the change that the company seeks to achieve. The Company Analysis This is the first of three stages that will be considered under the OD model for change. This stage shall be made up of three (3) major components namely the past of the company, present state of the company, and the future changes that the company seeks to achieve. It is based on the projected changes that the company wishes to achieve that the remaining stages of the analysis shall be triggered. Within the stage, six (6) major OD theories and concepts shall be utilised namely organisational culture, organisational diagnosis (Bradford & Burke, 2005), SWOT analysis, creative thinking, Lewin's three step theory, and Lewin's theories of action-research model (Cascio & Aguinis, 2005). Past Pervengines has gone through a number of progressive changes that make it possible to give a qualitative assessment to the progression that has been achieved by the company so far. Based on Lewin’s three step theory, which identifies three major steps of organisational change namely unfreezing, transformation and refreezing (French & Bell Jr., 1999), it can be said that Pervengines has in the past five years gone through all these steps in its effort to achieve rapid growth and development. At the unfreezing step, the company through its M.D identifies the stagnant nature of growth and the need for there to be an immediate change if the company will achieve its mission goals. As noted by Lewin, the right after identifying the need for change, the second step is jumped unto, which is the transformation step (Jones & Brazzel, 2005). At this step, certain prescribed changes are expected to take place. Indeed, for Pervengines, a number of pragmatic tasks were undertaken as a means to putting the proposed changes into action. For instance early retirement incentives were put on the table to ensure that many of the old staff whose presence in the company was crippling productivity took advantage of it. Furthermore, one of the company sites was closed to enhance voluntary redundancy (Britt & Jex, 2008). In relation to the third step of Lewin’s three step theory which is the refreezing, the changes that had been implemented became a permanent part of the company. This is where organizational culture comes up for discussion because the changes brought about a continuous improvement in the organisation’s culture. It will be noted that organisational culture comprises the deeply accepted values, norms and behaviours that the constituents of the company share (Axelrod, 2000). Present The present state of Pervengines will be analysed using a SWOT analysis, which seeks to bring out the current strength, weaknesses, opportunities and threats of the company. By the close of the SWOT analysis, it is expected that the major characteristics that determine the present position of the company will be clearly outlined. The contributions of past events within the company and its contribution to the current situation will also be levelled (Basu & Wright, 2007). Finally, the SWOT analysis is expected to give direction into the future change and the effects of such change to the company (Black, Stewart and Hal, 2002). Internal Strengths Weaknesses 1. Pervengines has developed a well established brand equity through its easily recognizable company logo and product quality 2. The company is a multinational company with over 24,000 employees of different professional backgrounds. 3. Pervengines has a sizeable market share in almost all countries that it operates. 1. Turnover rate is higher and thus so much expenditure given to recruitment and placement, as well as training. 2. The net profit of the company has hardly been stable, resulting in a situation whereby potential investors are unsure of the quantitative growth rate of the company (Blanchard, 2007) 3. In relation to non-white goods, the company’s market test failed woefully as compared to other competitors. . External Opportunities Threats 1. The company has a very rapid market penetration rate, creating an opportunity with non-white goods 2. Budget and expenditure on carbon emitting engines is cut down due to the introduction of non-carbon emitting engines as part of global health concerns (Cameron and Quinn, 2011) 3. Majority of consumers of products produced by Pervengines are accustomed to the company’s products and are therefore likely to remain key customers of the company. 1. There is the threat of new entrants, particularly those companies that have allies with long existing competitors of Pervengines. 2. The importation of cheaper motor parts from international markets, particularly China. 3. Competitors of Pervengines going into mergers, making their quantitative market scope and bargaining power larger. The present state of Pervengines through the SWOT analysis presents an unfavourable state of doing business. This is because even though the changes that were implemented in the past achieved its goals to a very large extent, it has been identified that financial growth continues to be lacking because patronage is coming to the company not as a result of development and growth but due to cut down in prices of products. Even though the strategy of cutting down prices may be seen as a major strategy in developing competitive advantage for a company, it comes with the risk of stagnated net income growth (Chopra & Meindil, 2007). In relation to the internal and external factors influencing the current situation of the company, a number of pragmatic future projections are needed. Future Two major OD theories and models are considered under this stage of the company analysis. These are Lewin's theories on action-research model, creative thinking and organisational diagnosis. It has been said that the future of a company is best determined after a vision for change has been developed (Collins, 2001). But for such vision for changes to be successfully developed, the application of critical thinking and organisational diagnosis must be put to work (Collins, 2005).Triggering organisational diagnosis has been said to be a means to the end for future changes. What this means is that organisational development and change cannot be expected to start manifesting for the mere fact that organisational diagnosis has been implemented. In the case of Pervengines therefore, a creative phase that was backed by creative thinking was conceptualised by the HR Director who proposed that the future of the company should be one that guarantees improved quality standards, increased sales, and above all, tangible and realistic increases in the net income of the company. Again, studies have showed that though a well combined theory of creative thinking and organisational diagnosis can lead to the creation of a comprehensive vision for change, actual change will be manifest only when a realistic research model is executed (Conner, 1998). In principle therefore, an action research, made up of three major phases is suggested for the future of the company if the vision for change into realising net income growth will be achieved. The phases will be pre-intervention phase, intervention phase, and post-intervention phase. Intervention as used in this context refers to a set of pragmatic actions and tasks that will be put in place to bring about the realisation of company goals (Dyer, 1994). Specifically, human resource development and empowerment is suggested as a future intervention for Pervengines. Gaining Commitment to the Vision Generally considered the stage 2 of the OD model for change, this aspect of the company analysis shall be used to identify and convince stakeholders of change to be a core part of the purported change discussed above (Galpin, 1996). Within the stage, five (5) OD theories, models and concepts shall be utilised, made up of general system theory, Burke-Litwin theory of organisational change, organisational climate, Porras and Robertson model of organisational change, and use of power. The review and analysis of these five (5) OD theories and models shall be done through a breakdown of Pugh’s 4 principles for managing organisational change. Principle 1: Organizations are Organisms Under this principle and phase of organisational change, two major questions will be posed as a critique to the proposed changes that Pervengines desires to achieve as a company. The first of these has to do with the question of whether or not the implication for different grouping were considered (Geunes, 2006). Groupings as used in this context refer to stakeholders of change who would have one role or the other to play to ensure that the changes are achieved. In the case of Pervengines, the change has to do with minimising the human resource base and give attention to empowerment and development of the few employees that will be left. As noted by Pugh, the organisation is an organism rather than a machine (Gladwell, 2011). Therefore, the intended change must be carried out in a manner that considers all possible implications of employees likely to be affected both negatively and positively. As outlined by Porras and Robertson model of organisational change, changes must focus on individual behaviour. Therefore, Pervengines can achieve success with its intended change only if the personal contributions of employees towards productivity is critically investigated before lying offs are done. Finally, clue will be taken from the concept of use of power to guide against victimisation and excessive abuse of power when the mantle to hire and dismiss falls into the hands of senior officials (Greenleaf, 2002). Principle 2: Organizations are Occupational and Political Systems For this principle, considerations made in relation to people’s positions, prospects, status, and power will be outlined (Hardy, 2010). For Pervengines, one of the very first victims of removal from office was the Group HR Director and some 3,500 employees. Taking Pugh’s second principle into consideration, one would ask if the lying offs were done with thoughts to what the affected people could give to the company by virtue of their power, status and position. French and Bell (1999, p. 82) have said in relation to the general system theory that organisations are “open systems that exchange with the environment”. In effect, any act of lying off people without a prior consideration of the environmental impact that such people could create for the company will become a major source of worry (Heath and Heath, 2010). There have been situations where companies have laid off some of its key employees, only for these people to come together to start new companies in the same area of operation as the ones in which they belonged. In most of these cases, these laid off employees have been said to use a variety of new and exiting organisational cultures to create competitive advantages over their parent companies. Principle 3: All members of the organization operate simultaneously This is the level where a question of whether or not the comments of different people were taken seriously and acted upon (Heifetz, 1998). Clearly, if the organisation is an organism and operates according to an occupational and political system, then it takes transformational leadership as rooted in the Burke-Litwin theory of organisational change to undertake the kind of change suggested by Pervengines without hurting the emotions of people (Heifetz, 2009). It also takes transformational leadership to ensure that the talents and skill of competent people are not made to go waste for the mere fact that the company needs to cut down on its employee base by 3,500. According to the Burke-Litwin theory of organisational change, there are two major orders of change namely first-order and second-order change. In the second-order change, there is emphasis on mission and strategy, leadership and organisational culture (French and Bell, 1999, p. 77). Therefore, the MD of Pervengines who is the face of the organisational change taking place at the company must ensure that he exhibits transformational leadership at this point in time as against transactional leadership if he wants to successfully achieve second-order change at Pervengines. Principle 4: Change is most likely to be accepted by people who are successful Pugh notes that for there to be gained commitment to the vision of the company, the suggested change is most likely to be accepted only by people who are successful (Kanter et al, 2002). But the concept of successful people has been said to be created only in an atmosphere where leaders responsible for change are able to increase the confidence of stakeholders in the new vision. In effect, change will not be embraced if there are no successful people to embrace change. On the other hand, successful people will not be created on an automatic basis but by the leader in charge of the vision. At Pervengines, the quantum of effort made into finding out the people and groups who are most likely to embrace the change will be measured by the level of commitment put into the development of available human resource (Kanter, 2009). Once such human resource development is undertaken and the preferred number of employees is sampled for the progressive of the company, it is then that corporate development will become part of the overall climate of the organisation and hence an organisational climate founded on the basis progressive development become created. Action Plan This is a very brief component of the OD model for change, comprising the identification of a change agent and clearly defining the role of the change agent (Kirkpatrick, 2005). Though brief, there shall be four major theories, models and concepts of OD conceptualised in this section. These are leadership, awareness of changing cultural norms, equilibrium theory as developed primarily by Lewin, and participation and empowerment. The action plan shall also be developed in relation to Pugh’s (1986) OD matrix of possible change initiatives. By this principle, the ‘who, what and where’ of change shall be resolved. Who According to Pugh OD matrix, the question of ‘who’ refers to the change agent, whereby the role of the change agent must be clearly identified. In this wise, it is important to establish that the change agent acts as a facilitator for the proposed change. This is to say that for the intended change that Pervengines is seeking as a company, the MD who is currently leading the action plan must not see himself as the only agent to bring about the change (Kotler and Keller, 2006). Rather, he must be ready to facilitate by leading the way for others to follow. In effect, the kind of leadership style practiced is essential in getting the action plan implemented. Once leaders want to autocratic in their leadership, there is the tendency that the grounds of organisational co-existence will not be conducive for learning to take place (Lawler et al, 2006). In the absence of learning also, responsibilities of change become left into the hands of only a few people (Lencioni, 2002). For effective change, the equilibrium theory developed by Lewin must be used where there is a balance point between desirable and non-desirable characteristics to be developed by the leader. This will however succeed when democratic leadership style is used. The Responsibility Charting has also been identified as a very important means of distributing responsibilities to different stakeholders and agents of change within the organization. As seen in the chart below, actors and actions are clearly defined. The actors refer to the people within the company who will be required to perform specific roles. The actions on the other hand refer to tasks or duties, expected to be performed to ensure the needed change. On the whole, the actors are identified with four (4) major labelling given as responsibility (R), approval (A), support (S), and informed (I). Those under ‘R’ are people whose responsibility it is to initiate change whiles those under ‘A’ are those people whose approval is needed to start off the change process. Those under ‘S’ are those people whose support and resource will be needed in completing the change whiles those labelled ‘I’ are those who will merely be informed of the change that is about to take place. Figure 1: The Responsibility Charting of Pervengines Actors Actions MD Jane Hampton Mike Hale Senior managers shareholders Employees Educate potentially affected staff A S R I I S Reallocation of employees A R I A I I Closure of non-functioning branches R I S S A I Appraisal and performance management A S/R R I I S R=Responsibility A=Approval S=Support I=Inform What and Where of Change Under the Pugh OD matrix, four major levels of change are identified. These are organisational level, inter-group level, group level and individual level. Under each of these levels, the behaviour, structure, and context of change are reflected by the questions, what is happening now, what is the required system, and what is the setting respectively. Under these broad scopes of the matrix, two major aspects of the action plan is seen, which are ‘what’ and ‘where’. In consonance with the concept of awareness of changing cultural norm, the levels that have been listed earlier will be identified as ‘where’ the changes are expected. With the concept, the culture change is said to take a different posture at each level of the organisational hierarchy (Lippitt, Petter and Jack, 2005). To this end, at the organisational level, when the behaviour is said to be one that could possibly retard success, Pugh suggests that survey feedback and organisational mirroring be used to rectify the situation (Pink, 2009). At the inter-group level also, when the structure is said to lack integrated task perspective, Pugh recommends redefinition of responsibility in consolidating the structure. When the context at the group level is said to be plagued with insufficient resources, poor group composition and personality crashes, the remedy is given as change in technology and group composition (Scott and Dennis, 2005). With all these factors noted, it would be appreciated that the intended changes at Pervengines will only remain a mirage if what is expected to be achieved at each level of the organisation is not clearly outlined with accompanying organisational development interventions through participation and empowerment. Conclusion To conclude, it will be stressed that change is a process and not an event. For Pervengines to live up to its change dream of ensuring growth and development that reflects in increased net income and through the reduction of its employee base, it will be prudent to bring on board all necessary expertise needed to ensure the success of the change. More importantly as the change will include slashing down on the work force of the company, it will be important to take into consideration critical aspects of the theories and concepts of organisational development discussed so that the core competences of the company will not be cut off. It must be noted that the employees who will be laid off will eventually become the human resource of other competing companies and so it will be necessary to ensure that the best components of Pervengines are not given out easily to competitors. REFERENCE LIST Kotler, P. & Keller, K. 2006 Management, 12thed. New York: Pearson Prentice Hall. Lawler, Edward E. III, Worley, Chris and Porras, Jerry. 2006. Built to Change: How to Achieve Sustained Organizational Effectiveness.Jossey-Bass. Lencioni , Patrick. 2002. The Five Dysfunctions of a Team: A Leadership Fable . Jossey-Bass. Lippitt, Gordon, Petter Langseth, and Jack Mossop. 2005. Implementing Organizational Change. San Francisco, California: Jossey-Bass Inc., Publishers. Pink, Daniel H. 2009. Drive: The Surprising Truth About What Motivates Us. Riverhead Hardcover. Scott, Cynthia D. and Dennis t. Jaffe. 2005. Managing Change At Work: Leading People Through Organizational Transitions. Menlo Park, California: Crisp Publications, Inc. Bradford, D. L., & Burke, W. W. 2005. Reinventing organization development new approaches to change in organizations. San Francisco, CA: John Wiley & Sons. Cascio, W. F., & Aguinis, H. 2005. Applied Psychology in Human Resource Management (6th ed.). Upper Saddle River, New Jersey: Prentice Hall. French, W. L., & Bell Jr., C. H. 1999. Organization development behavioral science interventions for organization improvement(6th ed.). Upper Saddle River, New Jersey: Prentice Hall. Jones, B. B., & Brazzel, M. 2005. The NTL handbook of organization development and change principles, practices, and perspectives. San Francisco, CA: Pfeiffer. Britt, T. W., & Jex, S. M. 2008. Organizational Psychology: A Scientist-Practitioner Approach (2 ed.). New York, NY: Wiley. Axelrod, Richard H. 2000. Terms Of Engagement: Changing The Way We Change Organizations. San Francisco, California: Berrett-Koehler Publishers, Inc. Basu, R. & Wright, N. 2007. Total Supply Chain Management. Elsevier Publishers. Oxford: UK. Black, J. Stewart and Hal B. Gregersen. 2002. Leading Strategic Change. Upper Saddle River, New Jersey: Financial Times Prentice Hall. Blanchard, D. 2007. Supply chain management: best practices. John Willey & sons publishers. Hoboken. New Jersey. Cameron, Kim and Quinn, Robert E. 2011. Diagnosing and Changing Organizational Culture: Based on the Competing Values Framework. Jossey-Bass. Chopra, S. & Meindil, P. 2007. Supply chain management: strategy, planning, and operation. Pearson Prentice Hall. University of Michigan: Michigan Collins, Jim. 2001. Good to Great: Why Some Companies Make the Leap... and Others Don't. Harper Business. Collins, Jim. 2005. Good to Great and the Social Sectors: A Monograph to Accompany Good to Great. Harper Business. Conner, Daryl R. 1998. Leading At The Edge Of Chaos: How To Create The Nimble Organization. New York, New York: John Wiley & Sons, Inc. Dyer, William G. 1994. Strategies for Managing Change. Reading, Massachusetts: Addison-Wesley Publishing Company, Inc. Galpin, Timothy J. 1996. The Human Side Of Change. San Francisco, California: Jossey-Bass Inc., Publishers. Geunes, J. 2006. Supply chain management: models, applications, and research directions. Kluwer publishers: Miami. Gladwell, Malcolm. 2011. Outliers: The Story of Success. Back Bay Books. Greenleaf, Robert K. 2002. Servant Leadership: A Journey into the Nature of Legitimate Power and Greatness. Paulist Press. Hardy, J. 2010. leadership. New York, NY: Peter Lang. Heath, Chip and Heath, Dan. 2010. Switch: How to Change Things When Change Is Hard. Crown Business. Heifetz, Ronald. 1998. Leadership Without Easy Answers. Harvard University Press. Heifetz, Ronald. 2009. The Practice of Adaptive Leadership: Tools and Tactics for Changing Your Organization and the World.Harvard University Press. Kanter, Rosabeth Moss, Barry A. Stein, and Todd D. Jick. 2002. The Challenge Of Organizational Change. New York, New York: The Free Press. Kanter, Rosabeth Moss. 2009. When Giants Learn To Dance. New York, New York: A Touchtone Book. Kirkpatrick, Donald L. 2005. How To Manage Change Effectively. San Francisco, California: Jossey-Bass Inc., Publishers. APPENDIX List of OD theories and how they were used in relation to the OD Model of Change in developing the main points Stage on the OD Model Sub-theme OD theories, concepts, principle used Link to main assignment Stage 1: Company Analysis The Past Lewin’s three step theory organisational culture These two theories and concepts rightly relate to the past models of running the company, where it was established that practices in the past account for the current organisational culture with which the company operates with. The Present SWOT analysis The SWOT analysis gave a very vivid picture of the company in terms of internal and external factors that affects it. This was related further to the future in terms of how the company can make its change proposals work effectively to turn weaknesses into strengths. The Future Organisational Diagnosis Creative thinking Action research Through these 3 theories and concepts, it was realised that for the vision of the company to be achieved, it is important to commit to the effort, thorough research based investigation of what currently prevails and how the future would be shaped. Stage 2: Gaining commitment to the vision Pugh’s Principle 1 Porras and Robertson model of organisational change This model established that because the organisation is an organism, it is always important to pay attention to individual organism’s behaviour Pugh’s Principle 2 Use of power General system theory As organisms create a political system, it is important that the power that comes into the hands of leaders are used effectively and not to sabotage other employees. Pugh’s Principle 3 Burke-Litwin theory of organisational change Under this principle, it will be realised that change must take place in a simultaneous order because when some members accept change and others refuse, there is no way proposed success can be achieved Pugh’s Principle 4 Organisational climate Once change becomes accepted by all successful people within the organisation, it leads to the creation of an organisational climate that is based on uniquely accepted principle for the organisation Stage 3: Action Plan Pugh’s OD Matrix (who) Equilibrium theory Leadership Leaders are needed to create a state of stability if they are expected to act as change agents for the vision of change proposed by the company Pugh’s OD Matrix (where and what) Awareness of changing cultural norms Participation and empowerment Once differences in cultural norms are identified within all levels of the organisation, the efficiency of the company will be enhanced through participation and empowerment. Appendix 2: The Pugh OD Matrix Behaviour Structure Context Organisational level Lack of awareness of the need for change and low morale in terms of support for change Organizational mirroring Lack of understanding for organizational structure Rebuilding the organizational structure Information technology, labour market competition Redistribution of available resources Inter-group level Lack of coherent cooperation between employees and agents of change within Pervengines Conflict management interventions Difficulty for staff of different departments to interact effectively on the same vision Appointment of liaison officers and personnel Differences in sub-unit values and physical distance Implement group integration policies Group level Leaders refusing to integrate employees in the change agenda Redefined leadership to incorporate democratic leadership style Poor description of tasks, roles and duties to be performed by staff Creating self directed work groups Lack of adequate resources to run motor factories effectively Outsourcing of resources Individual level Individual needs of employees not met, lack of promotional opportunities Career planning seminars for individual employees Job availability too easy to execute Job restructuring Inappropriate allocation of training facilities to deserving employees Human resource management emplowerment Read More