Understanding levers for organizational change the case of AB Ltd - Essay Example

Understanding Levers for Organizational Change: The Case of AB Ltd 0 Introduction Whenever there is a change in the overall organizational strategy for success, it is followed by a significant change in the organization. These changes may be found in the operational management spectrum or in the total organizational culture itself. The changes are due to take place in any organization simply due to the passage of time where the organisation's life is longer and hence it may become necessary to introduce changes in the operating strategies and plans. Such changes are bound to happen just as they happen in the case of any life cycle process. Under those circumstances it becomes the responsibility of the top management of the organisation to perceive the nature and methods of such changes and prepare the organization to meet the challenges of such changes. This necessitates significant strategic practices in all functional areas of management. In order to make the change process successful it is important that the change leaders have a thorough understanding of the context of change. This includes a thorough insight into the basic organizational systems and structures as well as the external environment in which the organisation is operating. Organizational context is created and renewed through tangible and concrete management actions. (Ghosal, S. and Bartlett, C. A. 1994) Unless the changes in the organisation are preceded by an in-depth analysis of the internal and external environments, any endeavour by the management to bring about changes may not produce the desired results. Thus an evaluation of performance of each link in the organization is an essential prerequisite for effecting the organizational change. Another equally important consideration while deciding on the changes in the organization is the impact of the external environmental forces on the effectiveness of the organizational performance. With this background this paper presents a report on the nature and methods of change management in the 2.0 Change Process in AB Limited The following is the change process as evidenced by the senior management in the case of AB Ltd. The process is identified through a series of interviews with the managers and team leaders of Change management in the Company. The description involves a detailed report on the change process being effected by the company. 3.0 Change Process The process of change being a complex in nature must be well planned so that the change process is accomplished without hurdles. The change process involves the following steps: Discovery Process - Making a case for organisational change Commitment from the top management Defining change strategy Alignment of change strategy with the overall business strategy Implementation of the change and Monitoring and refinement (Kaplan Consulting) 3.1 Discovery Process The first step in bringing about any changes in the organisation is to make a strong and airtight case for the introduction of such changes. In this step the change leaders may take the help of tools like (a) Online surveys conducted on various issues that may be the core change aspect (b) High impact interview protocols may also help effectively in the process (c) An analysis of the competitive environment of the business including the analysis of the strengths and weaknesses of the competitors (d) Technique of benchmarking will also be one of the useful tools (e) A well defined assessment of the customers and suppliers may also lead to the identification of change areas (f) Gap analysis is another tool that helps in the identification of changes required in the organisation 3.2 Commitment from the Top Management It is vitally important that the top leaders are prepared intellectually and motivationally for the introduction of changes as they are the people, who have to pilot the change process, sell it among other organisational members and arrange for the deployment of the necessary resources. The steps involved in this process are: (a) Building up a trust is the foremost requirement and this needs to be followed by inculcating a common sense of urgency and also unquestioned commitment from the top leaders of the organisation (b) It is also critical to form the management team responsible for initiating the process and following it ceremoniously (c) It is also the responsibility of the change leaders to inundate the team with a wide range of data and information to act upon (d) The gaps and deficiencies brought to surface by the gap analysis should be hammered by taking series of actions 3.3 Defining Change Strategy The crucial step in any change process is defining the outline of the strategies concerning the changes the organisation intends to bring about. This is the blue-print stage for the creation of a changed organisational environment. The steps involved here include: Conducting future mapping with the inputs of all the team members which will serve as the guidance for the achievement of the changed organisational goals Creating the mission, vision and core values for the transformation of the organisation Defining and creating strategies that are linked to the vision, mission and core values of the organisation For the creation of the change strategies the management may use tools and techniques like 1. Driving forces analysis which gives an insight into the strengths and weaknesses of the organisation 2. Organisational Performance Score card that helps the organisation to measure its own performance to bring about changes for the improvement in specific areas 3. Competency Modeling which enables the company to identify and develop on the core competencies 4. Strategic Performance Development System that facilitates the organisation realize the strategies efficiently 3.4 Alignment of the Strategies The next step in the change process is to align the change strategies with the overall organisational strategy. This involves building the consensus and commitment not only from the top management but also from the entire organisation. The objectives of this step are; preparing the organisational members, aligning the leadership behaviour, and inviting a broader participation from the organisational members. The tools and techniques that can be used by the change leaders for achieving this step are: (a) Providing the organisational members with wide ranging findings of studies enabling them to build response strategies (b) Coaching the change leaders the ways in which the behaviour committed by them can be exhibited (c) Expanding the communication infrastructure as wide as possible to encourage the maximum of two way effective communication (d) Initiating action for working on the levers of change that have the ability to impact the organisational performance (e) Being open to resistance and face such resistance directly with finesse (f) Involving the managers and other members who contribute in Response Initiative Team which will be launched to see the change process through 3.5 Implementation of the change The implementation process involves launching a broad initiative that could capitalize on the various levers of organisational change. The objective of this process is to make use of every available levers of organisational change. 3.5.1 Critical Levers for Implementing the Change The major critical levers that help the organisation in bringing about the necessary changes in the organisation are: 1. Delivering a series of operational targets broken down from the overall strategy aimed to providing the members with some near term win targets is the main lever for the organisation in the implementation of the change process 2. Elimination of the barriers which act as a counter vision for the organisation; It is important that such barriers are eliminated without fail so that they do not deter the progress of the process of change 3. Realignment of all organisational systems and members as also the organisational practices with the changed vision and core values is another important lever that contributes largely to the implementation of the change process 4. Holding quarterly review meetings on the basis of the detailed reporting to the change leadership team; a real time corrective actions is considered as vitally important to take the fullest advantage of the change process. This requires a periodic review of the implementation process on the basis of the reports filed to the change managers. 5. The line managers should be assigned with the responsibility of being members of Response Initiative Teams which are responsible for interacting with the other organisational members for the successful implementation of the change process 6. The involvement of the organisational members should be maximized and a proper feedback mechanism evolved for any possible improvement in the total process of implementing the change 7. Last but not the least is the training of the people in various competencies that have a close association with the vision of the organisation. This lever operates to improve the skill and knowledge of the employees to make them adaptive to the changed organizational environment and operating conditions 3.6 Monitoring and Refinement The last step in the process of bringing about changes is to monitor continuously and refine the change management process already initiated to assess its effectiveness. The step involves continuously testing the change process and rework, the process if deficiencies are found at any stage. The objective of this step is to create an organisation which slowly adopts itself fully to the changed circumstances. The helpful metric tools for carrying out this process are the 'Strategic Performance Development System, 360 degree feedback instruments, Organisational performance score card and other mechanisms that facilitate continuous leaning process in the organisation and also to embark on other improvement mechanisms. 4.0 Changes in the Nature of Organisational Forms According to for the organization to compete successfully in the global landscape it "requires a careful reappraisal of the traditional command and control system - in which a clearly defined, functionally specialized, hierarchical structure served as a buttress for stability and continuity and experimentation with more flexible and agile organizational forms which support and encourage innovation, exploration and learning" The literature in change management has developed various themes of studying and improving the organizational forms which focus on organizing around processes and social and relational dimensions. Fenton and Pettigrew (2000) in their study have distinguished between innovations in organizational structure, organizational processes, and organizational boundaries. They have identified three themes in the area of organizational forms which are interrelated with each other. The first theme relates to the external environment in which the firm's position in a highly competitive, technology oriented global environment where the changing consumer preferences have necessitated a change from the sheer profit maximization to value addition is defined. Here the concentration of the firm in a single industry and shifting of the non-core activities to outsourcing is stressed. The second theme narrates the internal knowledge management within the organization. This theme talks about the change in the focus from the traditional hard and tangible features of work organization to more softer and intangible features. This involves changing the spectrum of knowledge from strategy, structure, and systems to the application of leadership skills, shared values of an organization, and staff knowledge. It is related to the first theme of developing knowledge about the core business focal point. Organizational learning is the process by which organizations change their cultures and systems in relation to market conditions. (Heracleous, L. 1995) The third theme deals with the formation of 'net-work organizations' where the emphasis is shifted from the hard and rational content oriented approach to a more soft approach which is based on a process and relation oriented approach. Within these three themes various key indictors of change have been developed. 5.0 Changing Organisational Processes The next logical step in the organizational change to follow the changes in the structure is bringing about the necessary changes in the internal processes of the organization. These changes usually take the form of improvement in vertical communications, additional investments in information and communication technology and adopting best practices in human resource management. Though delayering and decentralizing being the indicators of structural changes do not altogether remove the traditional hierarchical structure, they promote an increases cross communications among different levels of organizational members. This enhances the importance of vertical and horizontal communications in the change process. The latest development in this regard is the application of available technological advancement of electronic media for 'remote monitoring' of the members of the organization. According to Greatz et al "between 1992 and 1996 investment in information technology increased fourfold with 82percnet of the companies reporting increased investment in information technology infrastructures that would help them improve and extend vertical and horizontal integration". It is also crucially important that any large investment in the information technology hardware should be accompanied by an equivalent investment in software required to make use of the hardware. Dawson et al (2003) opine that the investment in the information technology should also take into consideration the social and political fabrics of organizational life. On the new and best practices of human resources team-building exercises, work-life balancing, inter-company training seminars and workshops and other forms of mission-building activities are identified and included. As put forth by Greatz et al "large scale change must involve the simultaneous and continual management of the behavioural agenda as well the intellectual and management agenda." 6.0 Changing Structures Changing structures involves the activities of delayering, decentralizing, and project based organizing. Stace and Dunphy, (2001) suggest that it is important that the managers and change agents must understand and attend to some basic issues while undertaking any change management process. The changes envisaged here are to improve the performance of the firm to acquire a higher competitive advantage in the globally developing technology oriented environment. A study into the basic performance areas and assessing the need for changes in the respective areas is the highlight of this process. Delayering, decentralising, and project-based forms of organization would go a long way in improving the organizational performance. 7.0 Changing External Boundaries The competitive strength of any firm is enhanced by its capabilities to develop and make use of an improved skills and knowledge within the broad framework of the organizational culture and its ability to improve upon the processes. This involves the continuous review and improvements of the skills and expertise in a single industry and in a focused manner rather than diversifying into many areas and loose track of the improvements requited in the area of core strength. It is also better for the firms to concentrate even in a single industry in the core functional areas and the services required in the non-core areas may well be outsourced. This process of organizational change works within the third theme already discussed that deals with the formation of 'net-work organizations' where the emphasis is shifted from the hard and rational content oriented approach to a more soft approach which is based on a process and relation oriented approach. There are three different components identified with this theme. The first among them is 'outsourcing' which has become more popular in the recent times in respect of the information technology (IT) companies and the IT enabled services companies allover the world. Networking also involves developing alliances. As complementary to the outsourcing most of the companies resort to various forms of strategic alliances with their vendors or suppliers in order to share the complementary skills and expertise which are either unavailable in-house or is expensive to acquire. Downscoping implies useful and unique combination of technical expertise, skills, and knowledge with other companies in activities related to the core activities of the firm. As against the trend of diversifying in to unrelated activities downscoping enable the firms to improve the knowledge in the core activity. 8.0 Issues and Problems of Introducing change The following are the dilemmas the managers usually encounter while adopting change process in any organization: "Adaptive or rational strategy development Cultural and structural changes Continuous improvement or radical transformation Empowerment or leadership and command and Economic or social goals" (Stace and Dunphy, 2001) It is always the case that one approach takes the opposite direction with the other and hence it is for the managers to select one which fits appropriately to the organizational situation. It may be observed that these dilemmas reflect the ongoing rift between the existing structures and processes and changes proposed in respect of these. 9.0 Conclusion Thus the change process is a complicated one which involves a series of steps and changes to be brought about in the organizational forms, structures, and processes in alignment with the external environment in which the business is operating. The commitment of the top management and the involvement of all members of the organisation is an essential prerequisite for the successful implementation of the change process. The change process also poses some issues and dilemmas to the management in the whole process of implementing change and it is for the change leaders to mitigate these issues in time to avoid any delay in the implementation process. References Dawson Mary Elizabeth, Steven Skinner, Arthur Zeirlin 'Rules of Engagement: Proceed with Caution when Integrating Multimedia Learning Tools into Existing Course Formats' Electronic Journal of Science Education Vol. 7, No. 4, June 2003 Fenton EM and A M Pettigrew. 'Theoretical perspectives on new forms of organizing,' in Pettigrew and Fenton, editors, The Innovating Organization, Sage London, 2000, pp.1-46 Ghosal, S. and Bartlett, C. A. (1994): "Linking Organizational Context and Managerial Action: The Dimensions of Quality of Management", Strategic Management Journal, Vol. 15: 91-112. Graetz, F, M Rimmer, A Lawrence, and A Smith Managing Organisational Change, Wiley, Milton, 2nd edition, Chapter 5 Heracleous, L. (1995): "Spinning a brand new cultural web", People Management Vol 1, No. 22: 24-27 Kaplan Consulting Group 'Building a High Performance Organization that is Value - Values Driven Stace, D & Dunphy D. (2001) Beyond the Boundaries: Leading and Re-creating the Successful Enterprise, 2nd Edition. Sydney: McGraw-Hill.An Organizational Renn2001 Read More