Impact Of Managment Change On Organizational Culture - Case Study Example

Impact Of Managment Change On Organizational Culture 1-Summary Program name: Management and Change experience in Oce. Program location: Holland Program vision: A change in organizational culture by necessitating cascading and spreading the training to the rest of the organization Program partners: Change4U Program timeframe: January 2010-December 2010 Total budget: $1.464 mil 2-Background Contemporary business organizations are faced with greater challenges posed by the demands of the environment. The ability to survive depends on factors within the capabilities of the organizations’ leaders. The competencies of leaders enable them to realize that organizations need stability and continuity as well as innovation and adaptation. Without some stability, any organization cannot function, yet, without adaptation it cannot survive. Organizational change is the essence of adaptation and innovation. People, processes and systems need to be flexible to respond to conflicts and changes in the environment. Change is a necessary component in an organization in order to respond to inefficiencies, conflicts and environmental developments. As the necessity for change looms larger than ever, a more positive attitude toward it is essential. Managers need to plan and control change to give direction and consistency to it. As change agents, their aim is to raise the level of performance of people and groups. Managers must be open to continuous change if they are to be able to cause change in others. According to Martires & Fule (2000, 357) “change, no matter how elegant it appears to be on paper, becomes effective only when it results in people and group actually improving their collective performance”. In this regard, the objective of the essay is to address and discuss the response to the question: when undertaking a planned change, it is the process of change rather than the outcome that requires managing. In developing the response to the issue, theories of change and theories of management, as well as examples of planned change in an organization would be used. For this purpose, the experience of Océ, a multinational organization primarily engaged in providing document management, output and printing solutions would be examined in the light of contemporary perspectives in management and change. 3-Purpose of project As part of this Dutch organization that has over a 100 year history, one is faced with an uphill task of managing a change in organizational culture. With a team of people from various departments, the organization provided opportunities for lean training; and a group has been assigned to pilot this task. The change process necessitates cascading and spreading the training to the rest of the organization. However, one is faced with the adverse effects of resistance to change due to a variety of factors, of which merger, is one. Further, in most parts of the organization, people don’t like change because they are afraid of losing their jobs. In most Dutch organizations, people tend to work there for a long time, say, 20-30 years. Most of the personnel have developed competencies in their area of work, but there is almost never a procedure set in place. Hence when asked what sort of procedure they have in place, it is difficult to evaluate and improve the system due to its nonexistence. An Organizational Strategic Change Plan is a comprehensive analysis of the entire change process of an organization. The first of foremost target of this report is to understand the need for change. This step first step is the most important of all because change is an ongoing process and change initiative. Thus intentional change initiatives can sometimes have severe negative consequences by constricting and disturbing this evolutionary process. The need for an OSCP is usually driven by some strategic shifts in organizations. These shifts can include a change or target markets, vision, management, workforce dynamics etc. 4-Objectives A change strategy is necessary for any type of change. Change managers need to develop an explicit strategy in order to increase the likelihood of successful change. The strategy will consist of a number of activities that should be carried out to help managers initiate and implement changes effectively. For Océ, the most essential components as strategy for making changes are as follows: 1. determine the real need for change 2. look for an idea that suits the need 3. consider the benefits and costs of change 4. obtain support for change 5. change by small steps at a time 6. assign an idea champion 7. determine any post-change problems and address them immediately Outcomes The outcomes of the project basically describe the different measurable results of the entire initiative. There are different types of indicators which can provide measureable results in this program. The leading indicators are the financial outcomes which can show that there has been an increase in performance of the organization. The lagging indicators would be higher satisfaction rates in employees. The higher satisfaction rates in employees would automatically convert into higher satisfaction in customers because of a better customer service. A change management report should be prepared at the end of the year. This report would review the different indicators and audit the initiative. The following outcomes are therefore expected from the process: Improvements in financial performance of the company Increase is employee satisfaction The increase in customer satisfaction The ease of management control Clear improvement in leading indicators Clear improvement in lagging indicators Better employee relationships by increased cultural tolerance A falter hierarchy with more empowered employees The high budget project should ensure that there is a definite change in the organization culture. This change should be not only in habbits but should be reflected in financial performance. That is the only justification for spending a large sum of money on this project. If however the change is achieved an innovative culture would be formed with empowered employees. 5-Activities Task Activity Method Key Deliverable Time Frame 1. Determine the real need for change Gather Data on variables which can affect the process of change The most effective method is surveys. Different questionnaire surveys to be designed to understand the perceptions of employees towards the change process. -Creating a clear vision and mission for change Jan   Under the perception of employees regarding the current culture a)       Establish a team comprising of change managers and veteran employees to understand change initiative       Understand the need for a cultural change as indicated by higher management b)       A study into leading and lagging indicators to identify deficiencies     Task Activity Method Key Deliverable Time Frame 2. look for an idea that suits the need -Identify solutions to the current factors which drive need for change - Seek solutions from inside the organization -Develop and propose a model which can create the necessary organizational change Jan     - Seek help from outside consults         -Look for similar examples for case study approach     Task Activity Method Key Deliverable Time Frame 3. consider the benefits and costs of change -Conduct a cost benefit analysis -Consider financial cost of change -Develop a budget for the change process Feb-March     -Intrinsic advantages should be calculate - Develop a financial model which represents the cost benefits of change       -Consider indirect benefit of change represented by lagging indicators and convert them into measureable objectives     Task Activity Method Key Deliverable Time Frame 4. obtain support for change -Make the process of transition smooth -Communicate the need for change to employees -Make change agents which can communicate the need for cultural change April-July     -Establish the Lewin’s model for change and use it in the transition period - Gather support by advocating benefits of change to employees   Task Activity Method Key Deliverable Time Frame 5. change by small steps at a time -Reduce the impact of change on organizational operations - As manifested at Océ, the merger proposal already increases tension and stress for employees in terms of fear of loss for their job and the demands for new tasks and responsibilities. Therefore, management should prioritize the change that is to be implemented. It is good that the training is initiated in one department first and served as a pilot group for training. Success in the early stages builds support for subsequent changes and creates a momentum for further success Aug-Nov Task Activity Method Key Deliverable Time Frame 6. assign an idea champion -Idea champion are people in the organization who take it upon themselves to initiate and implement changes -Assign idea champions to facilitate the process of change . If the manager himself cannot assume the role of idea champion, this role can be assigned to somebody else who embodies the abovementioned qualities Jun-Dec Task Activity Method Key Deliverable Time Frame 7. determine any post-change problems and address them immediately -Review and Control the process -Surveys and observations from change agents Changes are made to boost the performance of people. If the desired levels are not being reached, something must be wrong. Testing satisfaction levels in employees -Insert rewards and controls (monetary) which ensure that people do not revert to their old ways of doing things -Employees not only change but show high satisfaction levels Nov 2010- Dec 2011 6-Monitoring and Evaluation Objectives Key Indicators Methodology Time Frame Strategy Targets Cultural change and shift in employees to match the new organizational needs Increase in employee adaption to the new culture Reduced turnover in employees Higher satisfaction levels as shown by feedback Monitor employee cultural dynamics to ensure change is permanent Explain advantages of cultural shift Explain organizational needs in the new management system Feedback surveys and observation from change agents Introduce hierarchical system which support change (flatter organization is less resistance to change) The review will be a continuous process which could ensure that the organizations does not fall back to old ways A monthly evaluation of the process and change agents The process would continue for one whole year to ensure that the organization does not go back to its old habbits Introduce a self evolving system which provides opportunities for employees to grow and learn Permanent change in employee behavior Establishment of a new more dynamic organizational culture which is self evolving and learning Continuous positive feedbacks from the employees The employees do not only adopt to the new culture but show satisfaction in the new environment 7-ReportinG Activity Method Key Deliverable Timeframe Establishing of Favorable environment for change Using change agents and idea champions Explain the process and need of change to reduce uncertainty The willingness ratio regarding change in employees should be above ninety percent Jan-March Identify success factors to upper management High role of the upper management in the new falter organization Improve the acceptance of the new system in the upper management Feb-Jul 8-Budget Task Cost TOTAL Project Director(1) 10K Monthly 10 Research officer (3) 4K Monthly 12 Contract statistical analyst (1) 12 K Monthly 12 Workshops 5 K per event 20 Change Agents (4) 6 K Monthly 24 Idea Champions (10) 2 K Monthly 20 SUB-TOTAL (Monthly) 98,000 The first half of the programs would last for 12 months therefore the total project cost would be this phase would be 98,000 x 12= 1,176,000 The second phase of the program would only be centered on monitoring to ensure that the organization does not fall back into old practices. This phase of the project would only involve four change agents working directly under the CEO. Therefore the cost of phase two would be must less i.e. 24,000 x 12= 288,000 9- Human Resources Project Personnel required: Project Director It is always most suitable to select project directors from within the organization. However the project director must share the vision of change and must be an idea champion himself. The importance of this project calls for an experienced professional, who has enough industry experience in project management. The evidence of ability to manage a significant project and of teamwork and consultative skills will be an integral aspect of his role. Research Officer The role of the research officer would be to directly assist the project manager and provide him with the required research for decision making purposes. The personal in this role should be experienced change agents with years of change agents. It is most advisable to hire them outside the organization. This is because in-house research officers are susceptible to many different research biases. The research officers must not only have the required technical skill set but also an easy going personality which would encourage respondents to share information. Commissioned statistical analyst The statistical analyst would be very important in determining the results from data collected. He will have to develop models which can make the information collected concise and meaningful for decision making. This contract-based statistical analyst will assess consistency, values, comparability, sample strength and provide advice on interpreting and using data in written reports Workshops There will be a number of different workshops organized during the transition period and before. These workshops will play a very important role in preparing the employees for the expected change. The employees would be explained and trained in the new role expected in the new cultural environment. The idea champions would be a very important part of these workshops. These workshops will not work as a motivational gathering but also as a research platform for change agents. They will get feedback review from employees and understand the different resistances to change. Moreover the organizations would work with each employee in providing more opportunities for career growth in the new system. Change Agents The change agents would be hired from inside and outside the organization. They will be mostly HR specialist. Their main role would be assisting other participants of the change process. Idea Champions The idea champions would be energetic people hired from inside the organizations. They will work more like hidden agents of the change manager. They would continue with their previous roles and just indirectly motivate people into accepting the change. They would also provide project director with information of different barriers and sentiments from the employees. Timeframe 2010 Project Deliverable/Milestone Timeline JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Determine the real need for change Look for an idea that suits the need Cost Benefit analysis of Change Obtain Support for change Change by Small steps by Assigns idea Champions Determine any post-change problems and address them immediately 2011 Project Deliverable/Milestone Timeline JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Monitoring to ensure change is permanent Risk and Assumptions The change management initiatives are always encompassed by many different risks. The aim of the change management team is to ensure that these risks do not exist or their impact is minimized. The following are some risks that are considered: The employees do not accept the change implemented There is a mass turnover due to incompatibility of the initiative The levels of dissatisfaction are high in employees Employees form resistance groups and try to eliminate the change process The organization reverts back to its previous practices The report assumes that these different risks have been considered. The style of the initiatives has therefore been designed to maximize employee involvement and remove these potential risks. The report assumes that once the change process starts the project director will tackle issues on the ground. Resistance to Change The employees in any organization develop an adherence to organizational systems which had been used for a long time. The traditional maintenance system at Océ had been utilized since incorporation. Therefore, being habituated to this system, the employees naturally resist a proposed change in the system because these are seen as threats to the status quo. The supervisors who received the messages indicating resistance to change should employ the abovementioned strategies for managing change. Some supervisors could actually call in group meetings to explain the changes that were critical and necessary to improve the human resources system at Océ. Any personnel who openly resist change and relay that the new system would be difficult to implement should divulge their reasons for resistance. The managers should assure them that the proposed system would require extensive training and orientation to all members of the organization. Senior members who expressed fear in learning a new system or process in training should be assured that there is relatively no difficulty in adapting to a new system. The newly graduates and newly employed members of the organization are likely to be supportive of the change. They are more adept in structures processes, systems and technological advancement as exposed those accorded by the computers and the internet era. Further, they acknowledge that the old system do not provide opportunities for employee development especially those had been with the organizations for years. However, it was immediately eminent that by soliciting feedback from the employees who openly resist change, the supervisors would be able to immediately address the problems through clarification of points discussed and by enumerating the benefits of the new training system. The supervisors should not take sides but clearly and objectively enumerated costs and benefits of both the traditional system and the new training program, as the alternative. Supervisors and managers were fully aware of the resistance to change. Martires & Fule (2000) identified four bases of resistance to change: rational, emotional, social and political. At Océ, the possible resistance could be a combination of emotional and social. There is the desire to retain the status quo so that there wouldn’t be any job dislocation or movement. The group forces and teams that have been established over time support the status quo for their own personal objectives. In addition, older personnel are apprehensive of the new training system for fear that they could not adjust and adapt to the new methods. To manage this possible resistance, management can employ the following strategies: (1) information and communication prior to the change to prepare the employees of the new training program; (2) consultation and participation by soliciting employees’ comments, suggestions, apprehensions, and the like; (3) emphasis on benefits of the new system; (4) orientation and training to show easy use of the new training program; and (5) assurance that the new program would not disrupt employee’s security but rather contribute to a higher level of productivity and morale (Wynn, 2010). Likewise, as averred by Cartwright (1951), the change efforts should make use of group forces constructively by treating groups as a medium of change. The chances for change are increased whenever a strong sense of we-feeling is present. If both management and workers share a strong sense of belonging to the organization, then changes initiated by either group is more likely to be understood and accepted. Projected Outcome of Change Process An organization’s level of adaptation is not improved until many of its employees have adopted new patterns of behavior in relation to each other and to their jobs. In other words, adaptation is accomplished through the adoption of new behavior patterns by individual members and groups that comprise the organization. Individual change in behavior involves a complex process of personal and social learning. It is a process whereby people unlearn old patterns of behavior and adopt new ones. The learning process comprises much more than the mere acquisition of new cognitive and intellectual skills through a classroom lecture. Instead, the change process which involves the three steps of unfreezing, changing and refreezing, is in fact a journey that requires managing. Various literatures have identified the roles and responsibilities of managers as those encompassing the basic functions of planning, organizing, staffing, leading and controlling all aspects of organizational responsibilities (CliffsNotes, 2010), including change. With goals of improving productivity, enhancing the development of human resources by providing opportunities for personal and professional growth, training proves to be an indispensable function of human resources. The present fast obsolescence of knowledge and skills in any area and increasing number and complexity of jobs render it proper for workers to be hones for their specialties with new concepts and applications. The development program provides motivation for meeting self-realization, status and recognition needs. Resources should be committed for the development action-based programs and projects (Martires, 2004). Further, despite the low-turnover at Océ, management should foresee at in a number of years, those personnel who developed competencies in their respective endeavors need to be replaced upon retirement. Therefore, there is still a need to create training programs to acquire the skills needed for the tasks at hand. The development of structured training at all levels of the organization (at entry point, upon regularization, upon promotion, and even during managerial levels) need some amount of training and career planning to assist these personnel as they move towards greater personal and job growth and responsibilities. Analyses When undertaking a planned change, it is the process of change rather than the outcome that requires managing. The outcome of change is already the product of a well managed change strategy in the organization. The discourse initially explained the nature of change and the process that change has to undergo before the organization’s objective is achieved. Management needs to understand that there is indeed a strategy to manage change, as a process. With management’s functions of planning, organizing, directing and controlling, the change process is effectively managed. Change disturbs the existing equilibrium in order to attain a new one. As such, it creates tension and anxiety among people that makes them respond in various ways. The one that most concerns change managers is resistance to change for it has to be minimized if change is to succeed. To facilitate change, management creates a climate for it through adequate consideration of human needs. This climate is characterized by open communication, consultation, participation, shared rewards, and employee security. The dynamics of group behavior can be used constructively to effect changes in individual behavior. To this end, groups may be used as a medium of change. As exemplified by the pilot group to show the results of the new training program, the group’s successful improvement in the conduct of both personal and professional tasks proves to be the impetus for others to change. Through positive example and results, the change process could be replicated in other departments of Océ. The natural reaction for the change process was resistance from the personnel – especially those who are used to the traditional system where no active training programs were instituted. The objective principle of clearly indicating cost-benefit analyses of both alternatives paved the way for a better understanding of the change process. By soliciting feedback, all points of apprehension and fear were clearly communicated and properly and immediately addressed. The change process would be successful and sustainable because the present system had its loopholes and was already outdated. The practice of gaining competencies through experience over time would eventually take a toll in terms of lowering morale, productivity and affecting profits. By keeping pace with technological advancement and new methods in training, the benefits provided by the new program would be realized by the personnel and by management as viable, feasible and practical. Since the new system would not displace any personnel and can in fact produce returns in investment in a very short time, this change can definitely be considered successful and sustainable in the long run. The next phase is communicating these facts effectively to the employees. The effective communication here would mostly mean, communicating the right thing at the right time. Therefore employees do not feel left out neither do they feel negative anticipation. Conclusion In creating an environment for performance, organizations must continuously innovate to survive and to lead as well. Innovation deals with searching for creative solutions to human relationships, structures and processes, and ability to assess and adjust to the changing environment. An explicit strategy for initiating and implementing changes should be adopted for any type of change in organizations. After all, it is the process of change rather than the outcome that requires managing. A strategy for managing change is especially needed for large-scale changes, like those proposed by Océ, where the stakes are high so as to minimize the risks of failure. As identified in the strategies for managing change, these prevent haphazard initiation and implementation of change that only creates confusion and frustration. By managing resistance to change, the new processes, systems, or technology, can be implemented smoothly. Further, managers cannot afford do overlook the fact that groups exert considerable influence on members’ behavioral patterns. The influence of groups on the behavior of members is a subtle but powerful one. Any attempt to change must consider the dynamics of groups or the forces operating in groups. Change efforts can be supported or blocked by pressures on members coming from the group. Change is initiated, implemented, and maintained in organizations to increase the level of competitiveness and boost the productivity of its people. Changes can be made in strategy, structure, technology, products and services, or people. The relevant thing to remember is that effecting the necessary changes in the organization could temporarily disrupt existing equilibrium. Management can minimize any resistance to change by emphasizing that the benefits for all far outweigh any costs associated with it. To reiterate, it is the process of change rather than the outcome that requires managing. Change is an intricate and complex process that needs to be managed and addressed. The need for change has to be established despite success in an organization. The demands of the changing environment necessitate parallel appraisal of the organization’s adaptation to the clients’ needs. Managers, therefore, must be vigilant of the various forces in the environment that interplay and affect the operations of the organization. Adaptation can be achieved in a reactive or pro-active way. Organizational change can be reactive in the sense that the internal changes are made in response to external forces. As it happens, constant environmental change is the reality of modern life. The markets and industries develop, grow and mature. Industry competitors come and go, increasing or decreasing the intensity of competition. All these require appropriate responses from the organization or it will simply be left behind. Complacency is the enemy of effectiveness. In order for people or organizations to succeed, they must be willing and able to change. Changing for the better seems like an old cliché. But in today’s competitive world, usually, nothing else will suffice. The role of the manager is to manage change skillfully. Read More