Organisational Structure, Culture and Change - Essay Example

Organisational Structure Culture and Change It is said that “real lasting change can only be affected by the leader. Discuss your views on managing change and the leader’s role in being a catalyst for change. For years now, researches and studies have been preaching about the importance of change and how strategic change management can take an effective organisation and morph it into an extremely efficient one as well. Change, to a larger extent is something that people will naturally do anything to avoid. For most people having to change or having to go through situations that are out of their comfort zone is an act that takes a lot of effort to get done. The logical reason for this is that people prefer not to venture in uncharted territory, and even though there will always be those people out there who accept and even welcome change, the larger portion of human race will do any number of things to navigate around or circumvent it. For this reason, organisational change strategies have to be very well thought through and planned in advance so that they can be effective and so that the employees do not react to it in a less than pleasant way. For any organisation, the priorities that are set are different. Some place the most importance on doing well financially whereas there are others who place their customers on the top of their agenda. But researches have generally found out that the organisations that are truly successful usually put their customers first. Truly successful organisations invest their time and money in developing and upgrading their products and services so that they provide the best possible to their customers. Due to this, these successful organisations also have to employ strategic change strategies every now and then to achieve their goals. However, it is easier said than done. As pointed out before, change at workplace is always viewed suspiciously by the employees at first and organisations have to develop particular strategies to make sure that their people accept and welcome that change. According to Appelbaum et al (1998) “Strategic change could be undertaken in either a reactive or a pro-active manner”. This means that the management of an organisation can either predict and foresee the need for the change and develop strategies that will help them implement that change or stand up against the changing forces and resist them. For a larger part, the acceptance of these changes goes hand in hand with the image that the employees have about the organisation. If the employees perceive that the organisation that they work for has an acceptance and liking of innovation and change, they will automatically be aware that they have to develop in themselves a level of acceptance for that change as well. Even though a liking for change cannot be forced into any employee or an individual, an organisation can do its part in making the employees realise the importance of that change and the positive things that the change will bring with it. But saying that is not the same as doing it. It is comparatively easy to say that managers should induce in their employees an acceptance for change but actually doing it is a difficult task. In an organisation where interpersonal relationships are better defined, the managers or leaders of a workforce are the most important people who set examples for the other employees on how to perform. According to Abrahamson (2000), the mantra that “change or perish” is so common that it has rightly become a cliché now. But what most organisations do not realise is that change is so disruptive to an organisation that it can literally rip it apart. For that reason it is imperative that leaders play a significant role in first determining the pros and cons of bringing about that change and having done so, if they find it necessary, they should devise a proper strategy for the process that is beneficial to the organisation and its people in the long run. According to Kotter (2007), he has seen a large number of companies make the “change leap” in the past decade and while some of them have been a success most have encountered terrible failure. Among the many reasons for this, is the lack of systematic planning and the creating of short term wins that act not only as a sort of booster for the employees to raise up their morale, but built up over time create the huge leap forward that is a magnitude of change that is almost impossible to achieve in a short period of time. Kotter (2000) says that “Real transformation takes time”. He thinks that an organization that wants to bring about change will need to remember that their efforts for a renewal will lose momentum if they do not set short term goals for themselves. People by nature are impatient and want to see the results of their efforts and hard work. Abrahamson (2000) notes that “Most people will not go on the long march unless they see compelling evidence in 12 to 24 months that the journey is producing expected results”. Due to this, if the leaders of an organisation do not see the importance of creating short term meet-able goals, they are likely going to have a larger number of their employees teaming up to resist the change process. This point highlights the importance of organisational leaders to develop an effective change management strategy that is not only follow-able but is also a process having Dynamic Stability; a change process which consists of relatively small but consistent change efforts spread over a period of time (Abrahamson, 2000). Leaders and managers have to be successful at managing change because it is a part of their job. According to DeBorde(2006)“leadership provides a mission, a plan, or a pathway for those who follow; while management provides the structure, policies, and procedures by which to accomplish the mission” . It is an inherent part of the job description of a leader to lead and guide its organisation through the process of change and devise a strategy that takes the organisation closer to its desired objective. Leaders also play a great part in the development of the “shared vision” of the organisation’s future in the minds of the employees .This shared vision is a great tool that plays a significant part in the road to success for most organisations. According to Hoe(2007), “A shared vision is intended to generate a clear organizational purpose and promote the necessary changes in the organization so that it can achieve its desired future outcomes”. Leaders that are good at what they do make sure that their vision is fully transmitted to the employees. This ensures that the employees have a good idea of the future “ideal” organisation and this vision and the good that will come out of the change will help them accept it in good faith. Countless of researches have uncovered the fact that a workforce that is committed to its organisation is a workforce that at the end provides the necessary result. And it also means that a committed workforce is one which is involved to a certain degree in the decision making processes and knows that their say will also be given value. Every human being, at one time or the other thinks of what he/ she will be getting out of any decision that their organisation makes and it is the job of the leaders to develop a strong system of trust and communication within the organisation that will encourage the employees and ensure them that their management will always put their interests into perspective before making any big decision. Doing this will ensure that people do not automatically assume that the change is going to have a harsh impact on them and accept the prospect of change with the thought that since their management always thinks of them before making a decision, this time too they must have thought about them too. Developing the working atmosphere within the organisation is also part of the job of a leader. The type of environment that is prevalent in an organisation is in the hands of the management and the leaders of the organisation from the beginning. For example, the leaders at Ford preferred a more formal environment hence in the workplace environment; employees were much less laid back and more formal. Similarly, leaders who want their employees to enjoy the freedom of a much relaxed atmosphere, where they can knock on the doors of the top-level management whenever they need help, have the power to do so. It is also a good point to note that organisations where there is a little less rigidity find that their workers have a little more trust on the top level management. So it pays for the organisational leaders to put some thoughts into the type of environment that they want to develop at their workplace. The above discussion sheds a little amount of light on the different aspects of the organisational change that a leader controls and it would be safe to say that even though for complete and successful change to occur, each and every person on the organisational team has to play their part; the leader is still the single most important person in the organisation who controls, implements and formulates a strategy for that change. Even though, as I have pointed out, it is important for the leaders to consider the opinions of their employees, it is much better if they provide these employees a clear cut picture of how the change is going to benefit the organisation in the long run. This way, even if the change seems a sudden jump into unknown territory, at least the employees will know that there lies a better and brighter future ahead if they put their efforts into making the change a successful one. 2. Your company (or family) is going to acquire (buy) a new business. Since you are in the MBA program you are tasked with the assessment of the new company. Using the assessment tools we have discussed, provide your management or family with a complete assessment of the target company. Include the current and future organisational charts and explain your recommendations for change. Introduction: The business that my organization is planning to buy is a health concern and is currently privately held. The organization that I work with, the NHS Haringey PCT is planning on acquiring a flourishing and popular private hospital in the area. The National Health Service is the world’s largest public held health concern that provides medical and other services to people in the United Kingdom. The company exists on a monumental scale and employs 1.7 million people currently. The NHS department of health provides services absolutely free of cost to the residents of the United Kingdom and apart from charging fees for dental and optical services and for some prescription medicines, the services is free for everyone. For an organisation that is running on a small level, comparison with the services provided by the NHS is a sort of benchmarking that may seem too harsh and unrealistic. The major portion of the funding for The National Health Services comes directly from the pockets of the UK’s tax payers. For an organisation the enormous size of NHS, not only a huge budget is required there is surprisingly little that can be done to correctly calculate the efficiency of the NHS as a business. However, the Company as a business has grown to a very large extent. On an average the NHS serves some 60 Million people in a year and the services provided “cover everything from antenatal screening and routine treatments for coughs and colds to open heart surgery, accident and emergency treatment and end-of-life care” (NHS website) For a larger part, the business that my organization plans to buy, works on the same principals as NHS. Like the NHS, the standard business philosophy behind this organization is that medical healthcare is for everyone no matter the financial condition of the person. The Company that we are planning on buying is a non-profit organisation that works to help people in the society by taking care of their basic and other medical needs on the charge of a nominal fee that is charged to the customers. The people who sign up for the services pay a small amount of money each month that goes into a fund and provides the member medical coverage for major illnesses and other medical problems that occur from time to time. At the current moment, the business that we are planning to buy is operating in a single location and is very successful in the area but is operating at a very small level as compared to the NHS. The health services that it is providing to the people in the community include primary health care facilities such as clinical services, mental health services and public health services. The organisation also has its own research labs and clinical laboratories that cover the customer in the basic health plan and where all sorts of tests and scans etc are carried out free of charge. Currently the organisation does not have an ambulance service and apart from giving general medical services, the fund does not cover the costs of major surgeries that people might have to go through. Due to this reason there is a lack of an integrated system running the business that needs to be sorted and a level of expansion will have to be made if the organisation has to provide its patients with a level of service at par with NHS. The 7 s Framework: There are countless models of organisational effectiveness that have weathered the wear of time. Among them one is the McKinsey 7s Framework. This model is based around the theory that all external factors aside, if an organisation has to succeed there a number of internal issues that it needs to align and according to the authors Tom Peters and Robert Waterman, these factors have to be streamlined if an organisation wants to succeed. The factors that were pointed out by the authors in the McKinsey framework consisted of seven internal factors that were divided into two groups . One group comprised of the following three “Hard Elements”: Strategy, Structure and Systems. And the following four “Soft Elements”: Shared values, Skills, Style and staff. The model defined the hard elements as having a lot more structure and tangible value. These were said to be under the control of the management to a larger degree and could be changed or modified accordingly to the wishes of the management. The structure, of course is something that the top level management and the leaders of the organisation set and as a rule they are the ones who have the most say in any alteration made to the hard elements within an organisation and the strategy, structure and the system which runs the organisation is usually the choosing of the leaders of that organisation. The other four elements, known as the soft elements are much less tangible and are not as much under the control of the management of an organisation. To say that these elements are ‘soft’ in no way implies that they are of any less importance and if an organisation wants to succeed, these elements also have to be aligned together with the other three so that they can give rise to a vision that is shared by every individual of the organisation. At NHS, as the diagram obtained from the National Health Service’s UK website indicate, the structure of the organisation is basically divided into two units. A Primary care unit and a Secondary care unit. These units are controlled by separate managements who follow the same style of management that the entire NHS follows as a unitary organisation .In the primary care unit, General practitioners, pediatricians, dentists and other medical professionals are hired on contractual term. The secondary care unit comprises of trusts such as the ambulance trust and provides emergency medical care as well as “planned specialist medical care such as surgery” (NHS website) Figure 1. The entire NHS is controlled by the Department of Health. The department of Health in its turn is controlled by the Secretary of the state for Health and reports directly to the prime minister of United Kingdom.(NHS website). This system ensures that an organisation the size of NHS is well monitored, something which seems an impossibility, going by the size and span of the scope of NHS’s work. The workforce hired by the NHS is roughly 1.7 million. According to the organisation’s website “Just under half [of the 1.7 Million] are clinically qualified, including 120,000 hospital doctors, 40,000 general practitioners (GPs), 400,000 nurses and 25,000 ambulance staff”. Controlling, monitoring and evaluating such a huge task force seems a difficult task but the structure of the organisation is such that this task is managed effectively. The NHS employs a system of work that introduces each person to the ‘vision’ that is the essence of the services that NHS provides. All the employees are aware of the shared values that the organisation promotes and they know that their organisation puts the ability to meet the medical and clinical needs of every person irrespective of the person’s ability to pay for those services. SWOT Analysis Strengths: The biggest strength of the NHS is that it is a publicly held organisation and there is a lot of exposure that the organisation receives due to that fact. While there are many other hospitals in the UK, there is none that operates on the magnitude of the NHS. Due to this fact the organisation does not have any direct competitors. Another strength that the organisation has is that it provides services to a large number of people and “On average, it deals with 1m patients every 36 hours. That’s 463 people a minute or almost eight a second” (NHS website). This shows the penetration of the organisation in the health sector and highlights the fact that over the time NHS has become the single largest health care service provider in the world, something that is very hard to follow for any competitors. Weaknesses: Being an organisation the size that it is, there are more than a few weaknesses that NHS has. The population of UK is expanding at a fast rate and due to that, the services encounter difficulty in handling the amount of people who turn up at the NHS centers. There are a number of waiting lists for surgeries and for other specialized medical care, which is problematic for people. A person who needs medical attention straight away will not be done justice if he/she is made to wait for medical help and due to this NHS will have to start expanding its operation in the coming years if it plans to meet the demands of all the patients who believe in NHS for their personal medical needs. Opportunities: There are a number of opportunities for NHA in the future. The organisation has the backing of the government, and due to that expansion plans will be beneficial for the organisation in the long run. Over the years there have been a lot of changes in the NHS system; from the start of the “Primary Care Groups” to the “Health Action zones”, the top level management at NHS have continually developed different programs in accordance with the latest technological developments. According to Lamb and Cox (1999) “Continued technology change is inevitable and is likely to develop at an even faster rate, therefore managers must be responsive to such change’. Therefore, as time advances, the number of patients increase and the technology advances, NHS will have the backing of the Government to replace outdated procedures with new improved ones. Threats: One of the threats that NHS faces is the fact that it is fast outgrowing the amount of patients that expect medical help from the organisation. If changes are not initiated, the organisation will find itself in a situation where it is not able to provide proper help to every individual who is seeking it. However, that situation is not seen to develop in the recent times and is more of a long run issue. Among the top current threats that NHS faces is the very high employee turnover. Most of the GP’s are also working for NHS on contractual terms and that means that if any issue arises due to their negligence, the name of NHS will be taking direct blame. Balanced scorecard: The balanced scorecard approach is an assessment tool which lets organisations develop a vision and a strategy by assessing four major aspects of the organisation’s functioning. According to Olve et al. (1999), the balanced score card not only lets organizations devise an attainable future strategy, it also helps them organize a management system that allows them to implement the necessary methods so that those future goals are achieved. It analyses the Financial perspective of the organisation along with the customer’s perception of the organisation, the internal business processes and the amount of learning and growth that the organisation will have to under go to achieve a sustainable development and a vision that is beneficial for the organisation in the long run. To create a balanced score card for the business that we are going to acquire, we will have to first start off with the financial perspective: Financial perspective: As we have set the NHS as the target that we want to achieve, we need to create a similar financial perception of the company in the minds of the people. Although the business that we are planning on buying is not be a publicly funded organisation, to achieve the goal that we have set ourselves, we will need to provide the patients with a better service for less money. NHS gives free of cost medical care but if the services of the dentists or other specialized services are used, then the patients have to pay for these. The costs of the medicines are also not covered for these treatments. To achieve the desired goals, our organisation will have to provide excellent services for very nominal fee. Internal Business Processes: To achieve success our business will have to develop a set of strategies that make us not only successful as an organisation, but also set us apart. Currently we are in no position to even come close to the magnitude or scale of the services that NHS is providing and by setting NHS up as our target that we want to achieve, we will be by no means trying to set p a strategy to give competition to the organisation. Therefore, we will have to make our business processes as close as possible to the ones that NHS employs. Learning and Growth: The business that we plan on acquiring has yet to go a long way if we want to achieve the targets that we have set for our selves. For this purpose we will have to employ a change management strategy that allows us to grow in small continuous steps that not only take us forward but also helps our organisation set itself apart by providing innovativeness to the customers. We will have to continually implement the necessary learning and growth activities if we want the customers to view our organisation as a place where they can get quality service absolutely hassle-free. Customer Perspective: As I have pointed out before, to succeed, this organisation will have to make a long lasting impression on the people that we serve. For this purpose, if we want to succeed, we will have to initially prove service quality at par, if not better than that provided by other NHS PCT‘s. Only then will people recognize us a prospective source of Medical care. For people who are getting medical services absolutely free of cost, we will have to provide proper incentives so that they will think twice about going somewhere else. Organisational Chart : Figure 2, shows the current organisational structure that is defining the business that we are planning to buy. In this organisation, currently, there is a top level executive known as the Director, who controls the various offices under him. The Office of extramural activities and that of the Science policy and communication are responsible for handling matters that are not related to clinical issues. These offices report directly to the Director. The recruitment office is also accountable to the director and is responsible for the selection and hiring of Doctors and other staff. The business that we are planning on acquiring is a thriving set up based in a single location. We, on the other hand, plan on expanding the current set up and taking it to a bigger level. We plan on expanding this current organisational chart and will be adding a top level management body that will make centralized decisions for the entire organisation and its different regions. These decisions will include policy planning and recruitment decisions. Having a centralized policy making system will develop a more systematic decision making and there will be a uniform code of ethics and work for each region that will be formulated within the central decision making body. This body will consist of a Commissioner and a deputy commissioner who will be controlling the department of Clinical services, Public health, Mental Health and the Department of Policy making, planning and recruitment. These will overlook the Offices of the regional directors. The rest of the organisational chart will remain same with the exception of the removal of the offices between the regional directors and the various departments such as the department of Neuroscience, pediatrics and gynecology etc. Figure 1. Current Organisational Chart Figure 2. Proposed Organisational Chart. Financial ratios: Financial ratios are usually a very good way to judge the current financial condition of a company. However in this case, our target company is a publicly held organisation that provides medical services free of cost to the residents of UK. Due to that reason it is clear form the ratios that the particular part of the NHS that we are analyzing financially may not have a lot of cash in the bank, but its effectiveness can only be measured correctly by the fact that t operated within the budget that it is allocated and provides healthcare facilities to thousands of people free of cost. Some of the ratios are as follows: Ratio Formula The Model Company Current Ratio Current assets / Current Liabilities 0.26 Fixed assets to owners equity Fixed assets/ total owners equity -3.8 Debt to owners Equity Total liability/ owners equity -5.7 Current liabilities to owners equity Current liabilities/ total owners equity -5.7 Fixed assets to owners equity Total fixed assets / Owners equity 3.8 The Owner’s equity for the NHS Haringey, is in a negative value due to which all these ratios are coming out to be negative. The owner’s equity basically is the net value of the company that is distributed within the owners of the company in the case that the organisation has to sell off all its assets in the case of insolvency. Even though there are usually reasons that must be looked into when a organisation has a negative owners equity in the balance sheet but in the case of NHS it is just a clear indication that the organisation is not existing for the purpose of creating wealth. The above used tools give us some information into the workings of the NHS and by setting ourselves a target like it, we will be starting a tough journey forward. But with the thought in mind that we have to serve the people with the best innovation in the medical world and by following policies the likes of which are followed by the NHS, we will most surely get to our desired vision of where we want to be. References Abrahamson, Eric. (2000). Change without Pain. Harvard Business Review. July- August issue. Retrieved from www.hbrreprints.org on 1st April 2010. Appelbaum, Steven H., Normand St-Pierre &William Glavas.(1998). Strategic organisational change: the role of leadership, learning, motivation and productivity. Management Decisions. Vol. 36. No. 5. PP 289-301. Cox. Mike. A.A. & Mike Lamb. (1999). Implementing change in the National Health Service. Journal of Management in Medicine. Vol 13. No. 5. pp 288-297. DeBorde, Meredy. (2006). Do Your Organizational Dynamics Determine Your Operational Success?. The O&PO Edge. Retrieved form: www.oandp.com/articles/2006-02_03.asp. On 1st April 2010. Hoe, Siu Loon. (2007). Shared vision: a development tool for organizational learning. Development and learning in Organizations. Vol. 21, No. 4. pp 12-13 Kotter. John P. (2007). Leading change: Why Transformations fail. Harvard Business Review. January Issue. Retrieved from www.hbrreprints.org on 1st April 2010 National Health Services Haringey. Annual Report. Year Ending 2008/2009. National Health Service Official Website. www.nhs.uk/ accessed on 1st April 2010. Olve, Nils-Goran, Jan Roy, Magnus Wetter (1999). Performance drivers: A practical guide to the Balanced Scorecard. NewYork. Wiley . Read More