Organisational Change Management: Human Resource Management, Organisational Behaviour and Tourism - Essay Example

Management Contents Contents 2 Part A 3 Introduction 3 Part B 5 Background 5 Problems 5 Solution Focus 7 Conclusion 10 Recommendations 11 Reference List 13 Part A Introduction Organizational change can be defined as a process of corporate restructuring or removal of key personnel to minor changes in the operating procedures. Organizational change may come from both internal and external sources. There is almost a linear relationship between the two in the sense that external factors often trigger internal pressure. External pressure for organizational change may arise from factors, namely economic, political, socio-cultural and technological. Internal pressure for change may occur from operational inefficiencies, financial challenges and disgruntled employees. Any organizational change is restrained when the organization or management are incongruent with the process of change (Cawsey, Deszca and Ingols, 2011). In this case ELEC, an electricity company based in Europe, is facing a similar situation. The organization has found itself in a state, where external pressure is forcing to bring about change its existing organizational structure. The main external factor in this case was political reforms in the country, which was passed with the aim of introducing efficiency in the electricity market. Prior to this, ELEC was enjoying monopoly in the electricity market and the employees had become complacent due to excessive benefits received from the job. The changes in the external environment had triggered internal pressure within the company, mainly manifesting through changes in the vision of the management. The reforms in the electricity market were made due to the fact that existing companies had created a monopoly in the market, leading to inefficient delivery of services. The management had decided to focus on ‘core businesses’ of the organization and align with the market forces. Such decision had invariably involved operating at the least possible costs by adopting measures such as, layoff of employees. This action was a clear follow up of the change introduced by the government. The work group attitude and norms had altered dramatically at the management level, which caused severe problems among the employees. The second blow to the employees came from passage of further set of regulatory norms by the government to increase efficiency of the electric company. In order to deal with this external pressure, the management had adopted a program called ‘Qualified Development’. This program had aggravated the problem for employees as they were unable to cope with the previous set of changes. Based on the present state, purpose of this report is to understand factors that are causing internal resistance of the employees while accepting the changes arising from both internal and external factors. It has been observed that the main problem faced by the organization is lack of communication regarding changes made by the management with the regular organisational employees. The problems faced by employees can be subdivided into three phases, namely waiting, confrontation and exhaustion. This report, therefore, presents a way by which CEO of the organization can involve employees in the process of organizational change and communicate the changes to them in a transparent manner so as to reduce their frustration. It aims to provide a guideline that would enable organizations to pacify disgruntled employees, making them realize the need for these changes. The report is structured into three broad divisions from this point. The immediate next section provides a comprehensive view of the problems faced by ELEC. The section on findings will clearly demonstrate the course of action that must be adopted by the management to solve the current crisis faced by disgruntled employees. This is followed a conclusion that briefly identifies limitations of the proposed methods. Finally, few recommendations are suggested for the management of ELEC to improve the current scenario of the company. Part B Background Problems Modern work environment can be identified as one of the rapidly changing places that require significant adaptation on part of the employees. Forces of globalization and the urge to become increasingly competitive in international markets are leading both public and private sectors to restructure the existing working environment. This restructuring can be manifested in increase in workforce downsizing, ambiguity regarding the role played by employees and heightened anxiety. These factors can severely downgrade a working environment, which cannot be offset by financial gains accruing to the organization (Avolio and Gardner, 2005). Although the organisational productivity improves, employee dissatisfaction remains. Drastic changes incorporated by organizations can result in cases of employee cynicism, which are mainly characterized by three important attitudes, namely lack of organizational integrity, negative psychology towards organizations and exhibition of critical behaviour towards organization (Dutton and Dukerich, 1991). The case of ELEC can be appropriately fitted into these general findings of the researchers. The employees have become cynical about nature of the organization and strongly believe that the management is acting in “mysterious ways”. The management has not been clear in its directive. It has merely implemented the changes without communicating the need for those with the employees and certainly not involving them in the process. The existing literature presents three transformation models that have been developed in order to explain the process of organizational development. The models were developed by William Bridges and Edgar Schein and the third one by Kotter. Kotter’s model is considered as change implementation model and has been popular in upholding employee engagement in organizational development. Kotter had pointed out eight stages in adaptation of the organizational change. The eight stages introduced by Kotter included creating a sense of urgency, forming a powerful coalition, creating a vision, communicating the vision, employing and enabling others to act on the vision, consolidation of improvements and finally, institutionalizing the change. Kotter had clearly mentioned that success of implementing organizational change depends on facilitative management and continuous support from the top management (Kotter, 1995). This action has not been observed in ELEC as the management has simply decided to carry forward the change without providing support for the employees. The new CEO of the company has merely mentioned the organisational goal without creating a force of effective middle level managers for guiding the process of change. The middle level managers could be considered as functional specialists who can implement the process of change. These middle level managers are absent in ELEC, which is aggravating frustration of the employees. Bordia, et al. (2004) had pointed out that communication of the change in vision is an extremely important element in the change management process. This communication strategy is essential because it serves as a crucial link between need for the organizational change and involvement of the employees in implementing the process of change (Bordia et al., 2004). The study conducted by Salem and Williams (1984) has shown that if employees are not involved in the process of organizational change, then it leads to uncertainty where employees cannot describe or predict their future position in the organization (Salem and Williams, 1984). The research conducted by Frahm and Brown (2007) had also confirmed that weekly meetings with employees helps in removing the negative attitude towards organizational change. This step has also not been undertaken by the top management and most of the employees were dubious about changes that were occurring (Frahm and Brown, 2007). For instance, closing down of certain locations and reduction in working space were subjected to criticism by employees after waiting for too long. Additionally, according to the employees, flexible work timings that were introduced were ambiguous as employees had found themselves working extra hours. Employee engagement in the organizational development helps to instil greater focus and commitment among employees by dispelling their fears and uncertainty (Herzberg, 2009). In short, it can be said that ELEC must firstly explain attractiveness of the change to the employees and clearly confront their expectations. ELEC should take the path of guided coalition to render the process of change successful, which should involve multiple hierarchies in the organization to carry forward the process of change and avoid becoming a top-down approach. Last but not the least, the process of communication must be incorporated as the company has severely undermined the benefits arising from proper communication of the process of transformation. Solution Focus From the discussion so far, it has been established that there are multiple ways whereby ELEC can improve the process of change management. Firstly, the company needs to clearly explain the reasons for implementing the change, which can be done by holding meetings with employees and presenting a more transparent picture of the current state. The top management should be able to articulate exact nature of the government reforms that have been passed in recent times and also the ways in which reforms have directly affected the company. The employees at all levels must have a clear understanding about the brutal consequences of the changes and prepare themselves accordingly. Secondly, it must be realized by the CEO that change cannot be successfully implemented by merely framing strategic decisions at the top most level. There must be involvement of employees in the middle and lower hierarchy as well. This can be done by forming a group of four or five members for dealing with the process of resistance on part of the employees and motivate them to accept the change. These groups should directly report to the CEO and this in turn will help the CEO in understanding viewpoint of the employees. The process of engaging the middle and front-line supervisors can effectively reduce the communication gap between the top management and employees. Thirdly, CEO of the company must ensure that vision set by the top level of the management can be clearly understood by employees. In order to do so, an attitude of empowerment and empathy must be maintained by the CEO. The CEO must convey to the employees that ELEC is an organization, which cares for its employees and understands their problem. Fourthly, the management should immediately introduce measures for rewarding employees on the basis of the work done. The employees are frequently complaining about long working hours that have been introduced by ELEC under the heading of flexible hours. As a result, employees are caught in the process of long working hours without proper rewards for their work. Such a drawback must be immediately rectified by ELEC and employees must be rewarded based on extra hours that they work. Finally, training and coaching of the employees must also be done regularly to keep them updated with the process of changes implemented by the organization. Three action plans can be incorporated by ELEC in order to solve the present crisis. The first one should be a communication management plan, followed by a training plan and lastly an action management plan. Table 1: Communication Management Plan Audience Key Message Delivery Method Length of Session Middle-level managers The change pertaining to this level and the immediate impact. Regular meetings 2-3 months Lower-level mangers Same Same 2-3 months Junior Employees same same 3-4 months (Source: Author’s creation) Table 2: Training Plan Session Module Learning Outcome Objectives Length of training There should be separate modules for each of the hierarchy, pertaining to the change in responsibilities. This should clearly explain ways in which individual goals of the employees should be aligned with the broader organisational goals. Transparent objectives of the training session that clearly identify the reason for taking the training at the first place. Should be set for a standard two months. However, it should be modified as per needs and grasping power of the employees. (Source: Author’s creation) Table 3: Resistance Management Plan Key areas of resistance Actions to address resistance Responsible person Resistance relating to decisions taken by the organization. Resistance related to work roles and responsibilities. Employees must be initially provided with a logical explanation to resolve their resistance. Stubborn employees must be dealt with coercion. A committee should be specifically set up for this purpose. (Source: Author’s creation) It can be expected that implementation of these plans can help ELEC to directly address issues that are being faced presently. Another action can be taken by the management in order to deal with employee resistance and cynicism. It has been observed that employees are experiencing nervous breakdown due to the current state of affairs and work related stress. Medical help in the form of counselling should also be provided to the concerned employees. Following these steps meticulously can instil significance to the employees’ work, which in turn will further motivate them. The findings made by Milliman, Czapleurski and Ferguson (2003) had pointed out that employees must be engaged in their job tasks and only then they can derive meaningfulness from their work (Milliman, Czapleurski and Ferguson, 2003). The findings of Kahn (1990) also indicated that engaging employees in the organizational development can contribute positively towards minimizing employee cynicism (Kahn, 1990). Conclusion ELEC is presently facing a major crisis relating to the issues of employee cynicism regarding organizational change. Though there have been no instances of employee protests or violence, yet work climate in the organization is under stress as employees are highly dissatisfied with nature of the organizational change. Analysis of the case has revealed that the organization has not been transparent in explaining the need for change. Most employees have no idea about necessity of the changes occurring, which is creating fear in the mind of employees as they are being unable to rationalize the modifications. The organization must firstly explain the urgency of introducing change so that the employees are able to share the vision of the top management. Such can only be done properly if employees are involved in the change management process and all necessary organisational changes are communicated to them in advance. Having knowledge about the changes can help to reduce their fear and cynicism towards the same. One of the major limitations of the proposed organizational methods in the previous section is nature of the organization itself. It has been pointed out in the case study that ELEC was initially enjoying a monopoly position in the market. The employees working with the organization had become extremely complacent with their job tasks. The company had often been humorously referred to as “Mother ELEC” owing to the opportunities and benefits provided to the employees. Hence, any change to be implemented in such an organization would be met with resistance. The reason is any change will require the employees to work harder, which they will resist. The second limitation is that employee engagement may reduce the pace at which the organization may want to implement changes. Such a drawback appears because proper training and management of the employees and preparing them for organizational change is a time consuming process. It must be remembered that the external environment is no longer the same and changes in the government regulations have already raised the pressure on ELEC. In such a situation, delaying the process of change implementation may prove costly for the organization. Finally, deploying resources for training employees and maintaining resistance management teams are likely to heighten the company’s financial expenditure, which may be difficult to bear owing to turbulence in the electricity market. Recommendations In order to implement changes that have been mentioned in the previous sections, certain actions need to be adopted. The use of employee assistance programs (EAPs) and team working are two ways in which these goals can be achieved. Employee assistance programs are specially designed to help troubled employees at the workplace by way of providing them with proper guidance and caring for their mental well-being (Osilla, et al., 2010). Such type of a program will be extremely beneficial for the employees of ELEC as they have been under extreme psychological stress owing to the difficult work environment. Incorporating EAPs will prove helpful not only to employers, but also to the employees. The action plans that have been recognised in the section of findings provide a clear requirement for the employee assistance programs. For instance, the employees who are unable to cope with the new work environment must undergo counselling in order to be able to overcome their inhibitions. The second way of implementing the changes smoothly is to form T-groups. T-groups provide excellent opportunities for the participants to become aware of their own selves and the ways in which their actions can impact lives of the others working in the organization. Employees of ELEC have been found to exhibit high degree of sceptical attitude about the manner in which the organization is currently articulating the changes framed. Several employees have similar doubts and fears, which are affecting them adversely. So T-groups can offer a good platform, where employees can meet and discuss the nature of their problems. Such a forum will allow them to understand own behaviours. The informal nature of this training group distinguishes it from any other formal training group, where trainers provide a definitive framework for the participants to learn. T-groups will be more appropriate in order to address the employee problems prevailing in ELEC as most of the employees’ doubts concern the organizational culture and can be resolved without the active help of an external trainer. The external trainer can act as a moderator between individuals present in the group and provide them the full autonomy to discuss their problems. The trainer has a passive responsibility to ensure that the participants are able to discuss their behavioural problems in an effective manner. The final recommendation for ELEC in this report concerns downsizing. However, such a step should be undertaken only if all other resorts fail. Such a measure involves appointing downsizing envoys in advance, if and only if ELEC decides to undergo further downsizing. The envoys are trained professionals who undertake the task of delivering the bad news of job losses to the victims and subsequently helping them to deal with the immediate repercussions (Ashman, 2012). Reference List Ashman, I., 2012. Downsizing envoys: A public/private sector comparison. [pdf] ACAS. Available at: [Accessed 3 July 2014]. Avolio, B. J. and Gardner, W. L., 2005. Authentic leadership development: Getting to the root of positive forms of leadership. Leadership Quarterly, 16, pp. 315−338. Bordia, P., Hunt, E., Paulsen, N., Tourish, D. and DiFonzo, N., 2004. Uncertainty during organizational change: is it all about control? European Journal of Work and Organizational Psychology, 13(3), pp. 345-65. Cawsey, T. F., Deszca, G. and Ingols, C., 2011. Organizational change: An action-oriented toolkit. London: Sage. Dutton, J. E. and Dukerich, J. M., 1991. Keeping an eye on the mirror: Image and identity in organizational adaptation. Academy of Management Journal, 34(3), pp. 517−554. Frahm, J. and Brown, K., 2007. First steps: linking change communication to change receptivity. Journal of Organizational Change, 20(3), pp. 370-87. Herzberg, F., 2009. One more time: How do you motivate employees? Cambridge: Harvard Business School Press. Kahn, W. A., 1990. Psychological conditions of personal engagement and disengagement at work. Academy of Management Journal, 33(4), pp. 692−724. Kotter, J. P., 1995. Leading change: Why transformation efforts fail. Harvard business review, 73(2), pp. 59-67. Milliman, J., Czapleurski, A. J. and Ferguson, J., 2003. Workplace spirituality and employee work attitudes: An exploratory empirical assessment. Journal of Organisational Change Management, 16(4), pp. 426−447. Osilla, K. C., Miles, J. N., Zellmer, S., Watkins, K., Larimer, M. E. and Marlatt, G. A., 2010. Exploring productivity outcomes from a brief intervention for at-risk drinking in an employee assistance program. Addictive behaviors, 35(3), pp. 194-200. Salem, P. J. and Williams, M. L., 1984. Uncertainty and satisfaction: the importance of types of information in hospital communication. The Journal of Applied Communication Research, 12(2), pp. 75-89. Read More