Managing Organisational Change and Development - Term Paper Example

 «Managing Organisational Change and Development» Table of contents Executive summary.................................................................................................2 1. Background.................................................................................................3 2. Change approach strategy...........................................................................4 3. Dimensions of change and management of resistance to change...............7 3.1 Identifying the agenda of stakeholders................................................7 3.2 Techniques for stakeholder management..............................................8 3.2.1 Conflict management................................................................8 3.2.2 Motivation.................................................................................8 3.2.3 Leadership.................................................................................9 4. Culture excellence versus best practice approach.......................................9 5. Sustainable organisational change..............................................................12 5.1 organisational learning..........................................................................12 6. Conclusion..................................................................................................14 7. Bibliography...............................................................................................15 Executive summary During the contemporary period, it can be noted that organisations operate in a dynamic environment that is constantly changing. In order to survive in the long run, all the organisations should strive to keep pace with these changes in the environment. In today’s organisations, change is inevitable and is often necessitated by various internal and external factors and this initiative often affects the operations of the company in different ways. This report therefore seeks to critically analyse the implications of change especially on the organisational structure, major operational processes and culture by analysing a case study of an organisation called General Motors. In view of the changes being proposed at General Motors, this report attempts to suggest and establish the best way the organisation can effectively utilize the strategic changes initiated in the development of the company. The report notes that implementing a new order in an organisation is concerned with change of the current operational system. The planned approach strategy to development is more ideal given that in most cases change is met with resistance by many employees as a result of many factors. There is need to identify the agendas of the stakeholders and for the initiative to be successful. Sustaining organisational change in an organisation requires organisational learning where there is need to constantly re-orientate the workers through provision of basic training and development which would be closely monitored upon implementation. 1. Background General Motors (GM) is regarded as one of the largest industrial corporations in the world, employing over 344 000 people globally and operating in 32 countries (GM case study 2005). Ironically, it is one of the least profitable global carmakers owing to various factors. The company was formed in 1908 and it comprised of 25 independent car companies of which GM acted as a holding company. Through the years, it went through various ups and downs it its operations. One of the major challenges if faced was the stiff competition from other rival competitors such as Ford motor company. For instance, the emergency of the low cost Japanese made cars compounded the difficult situation of competition which was already taking a toll on General Motors. Various global changes also took place in the motor industry such as new technological innovations, new marketing strategies that specifically focused on meeting the interests of the customers among other factors. In response, GM invested heavily in its endeavour to keep pace with these global changes. However, the major setback that hampered its efforts was the aspect of bureaucracy resulting from hundreds of divisions within the company which made it difficult to have focused, well coordinated operational systems. GM used to pay very high benefit packages since it was very profitable especially during the mid 1970s when it dominated the US markets. However, due to changing global trends especially the emergency and ultimate dominance of other rival competitors such as Toyota and Nissan, GM has lost some of its competitive advantages to these rivals. GM is now in a predicament of continuing to pay high benefits to its workers against the backdrop of losses. It seems GM’s revenues are higher than those of Toyota but at the end of the day Toyota has higher earnings as a result of the fact that GM spends more money on operating costs and other expenses. GM makes more cars than it can profitably sell which means that it would end up selling at a loss. In fact it is no longer getting profits from its manufacturing business. This price war has often led it to offer discounts and one major challenge is the ability to meet the global changes in customer needs. Thus, these changes in the market have necessitated GM to offload worker health care liabilities, to ensure that new products must be introduced as scheduled as well as changing the corporate culture which is seen as bureaucratic. Thus, the major aim of this report is to suggest strategies that can be adopted and give a critical analysis of the best structure, culture, and systems that are necessary to make the change initiative work. A reflection about the action plan for implementation of the change programme will be used to give an analysis of basic concepts that often affect such initiatives. 2. The change approach strategy Change can be described as a transition from a current situation or the status quo to the desired future state (Amos et al 2008). Change is usually necessitated by both internal and external forces. The internal factors include human resources problems such as low productivity while the external factors include global and national dynamics that impact on the organisation such as technological changes, market, political, social and economic changes (Schultz et el 2005). Thus, the business person needs to conceptualise change as the gap between the current reality and the desired situation for the betterment of the organisation. Change is not a one day event since it requires proper planning and implementation (Amos et al 2008). In most cases, change initiative is not readily accepted by the employees hence the need by the leaders to carefully entice them to accept the idea. The workers form the backbone of an organisation and this is the reason why the leaders have to effectively influence them to share the same vision for the organisation. In some instances, workers are sceptical about change for fear of losing their jobs or being rendered powerless by the change initiative. Against this background, there are mainly two approaches namely the planned and emergent approach to strategy development. The planned approach posits to the effect that change is properly planned and a change-management programme is in place (Amos et al 2008). This is the most appropriate approach as far as implementing change at General Motors is concerned. Planning in this case is the foundation of the strategic approach where steps are taken to ensure the success of the programme. Strydom (2003;36), suggests that, “failing to plan is planning to fail.” This approach has various advantages to the organisation as a whole. There will be clearly outlined steps that can be followed where it will become relatively easy for the management to implement the suggested change strategy since it will be clearly outlined. However, one notable shortcoming of this approach is that the planned strategy may not conform to the situation obtaining on the ground. Concerted efforts should be made to ensure that the planned course of action is attainable and can be revised. The emergent approach on the other hand is primarily concerned with dealing with emerging situations within an organisation. Changes such as technological as well as the other human resources related issues can emerge within the framework of the operations of the organisation and appropriate action should be taken to cater for these changes (Werner 2007). The emergent approach is short term based compared to the planned approach though it also attempts to address the pertinent issues that can affect the operations of an organisation in the face of imminent changes. However, there is a correlation between the two strategies where the planned approach can go hand in hand with the emergent approach and the management can integrate these two into an implementation framework. A planned approach is clearly outlined but there may be some changes that can emerge along the course of implementation of change hence the need to take cognisant of these emergent factors. GM has the potential to perform better and even outclass its competitors if it tries to implement certain strategic measures in its operations that would result in the reduction of operational costs. Reorganizing the company’s hundreds of division into a single, manageable entity is the most effective strategy that can certainly bail out GM from its loss making status into a formidable profit making organization. In this regard, the divisional companies are competing against each other instead of working together to improve the quality of certain specific models of cars then work as a single entity. 3. Dimensions of change and management of resistance to change 3.1 Identifying the agenda of stakeholders Organisations are primarily concerned with fulfilling their set goals in their day to day operations. However, given the changing environment in which the organisations operate, the needs and wants of the stakeholders are also likely to change. Stakeholders are comprised of workers, customers, management as well as all the other people who are affected by the operations of General Motors. One easy way of identifying the agenda of the stakeholders is through analysing the shifting tastes and needs of the consumers in particular. Rising or declining demand of certain products shows the stance taken by the customers towards that product. The agendas of various stakeholders have different impacts on the organisation as a whole. If the customers shun the products offered, the organisation is likely to suffer revenue losses as there will be a decline in business. Implementing change in an organisation is not often an easy task to do as it would be met with different reactions. Various constraints are likely to be encountered and in this case, one notable one is resistance to change that may result in sabotage in the event that there is lack of understanding among the employees. Unhappy employees with the new initiative may not support it hence its implementation may be problematic which can result in poor performance by the employees which leads to decline in business. 3.2 Techniques for stakeholder management Management of change is mainly affected by the following concepts which include leadership, conflict management, and motivation of employees as well as offering human resources development (HRD). 3.2.1 Conflict management A conflict is an active disagreement between people with different opinions, values or interests (Kleynhans 2007). There are different sources of conflict in an organisation but their impacts in most cases have far reaching consequences with regards to performance of the employees in particular. Whether for the betterment of the company or otherwise, change is one aspect which is often treated with suspicion by the employees. Whilst the change strategy advocated by General Motors is a noble idea in response to turning around its fortunes, it may be problematic to convince the employees in particular about the benefits that would be brought about by that particular change. Where there is a conflict, performance is likely to be negatively affected which can result in decline of business. Concerted efforts are ought to be made in order to carefully deal with conflict which can derail progress if not properly managed. 3.2.2 Motivation Motivating the workers is one viable option of managing change. Basically, motivation is the enthusiasm employees have for their jobs and factors which influence how hard they may try to do the job (Michael Armstrong 1999). The employee must be persuaded and inspired to do the job. A demoralized person may not be very happy to continue working when there are clear indications that he will not benefit. Communication plays a vital role in enlightening the otherwise sceptical workers about the benefits of the new change programme. 3.3.3. Leadership Another basic tenet of managing change is found through leadership which is defined as the ability to influence a group of people towards the achievement of organisational goals (Robins S.P., Odendaal A.& Roodt G. 2001). Basically, leadership is concerned with the vision of the organisation. The leaders of the organisation ought to take a leading role in spearheading change such that the subordinates will also be inspired to follow suit. On top of adopting the above mentioned concepts in the management of change, it can as well be noted that human resources development (HRD) plays a vital role in change management. There needs to be constant management of internal development of human resources. During the contemporary period, it can be noted that the market is dynamic hence the need to ensure that the employees also keep pace with such changes that would be taking place. 4 Culture excellence approach versus best practice approach Schermehorn, Hunt and Osborn (1997:267 as cited in Rosouw 2003), describe organisational culture as a system of shared actions, values and beliefs that develop within an organisation and guide its members’ behaviour. Against this, the culture excellence approach gives precedence to the shared values within an organisation as a way of promoting better performance in the face of the ever changing business environment. To enhance an organisation’s cohesion, it is imperative to create a culture that promotes innovative ways of identifying a problem and finding a solution (Locke and Kirkpatrick, 1995). Brand (1998), posits to the effect that innovative and supportive culture will encourage better performance and cohesion while controlling and directive culture will hamper it. Performance can be effective where organisational culture can integrate with individual’s values, perceptions and capabilities in the workplace just like change which also has to incorporate these values for optimum results. Culture in an organisation is influenced by various factors such as organisational structure which defines how job tasks are formally divided, grouped and coordinated (Robbins, Odendaal & Roodt 2001). Whilst there are different types of organisational structures, a flat structure with decentralised features is likely to be more effective and ideal in the case of General Motors which is embarking on implementing some changes that are likely to affect its operations. In a decentralized organisation, action can be taken more quickly to solve problems and more people would provide input to decision making and the employees are likely to feel less alienated from those who make decisions that affect their daily operations at work. Adaptive organisational forms which emphasize the flexibility to adapt to change can enhance better performance while bureaucratic structures will inhibit it (Kleynhans 2007). The best practice approach is mainly concerned with performance that is geared towards producing best results out of an operation (Robbins 2001). Particular focus is on the product than on the welfare of the individuals. The aim of this approach is to maximise the profits especially in a competitive environment. Indeed, every organisation ought to have a competitive advantage over the other rivals in order to remain viable. However, this approach puts more emphasis on the needs of the company more than the needs of the individuals working within that company. In some cases, this stance results in demoralisation of the employees since their needs and interests are not prioritised at the expense of profitability by the organisation. This approach often results in workers working overtime in order for the organisation to meet its targeted goals. To a certain extent, the best practice approach is good for General Motors since it aims to maximise production and revenue generated. However, as far as change is concerned, the culture excellence approach is more ideal for General Motors. Whilst culture is not the sore determinant of what happens in an organisation, it has an influence on what the organisation’s members accomplish and how they accomplish it. Rossouw (2003), concurs with this idea and suggests that the internal culture has the potential to shape attitudes, reinforce beliefs, direct behaviour, and establish performance expectations and create motivation to create them. Thus, for General Motors to succeed in its endeavour to implement strategic changes in its operations, these have to be influenced and shaped by the organisational culture. 5 Sustainable organisational change 5.1 Organisational learning In order to be better positioned to sustain change in an organisation, members of the organisation ought to engage in collective learning that creates norms, shared assumptions and beliefs that become organisational culture. Learning organisation can be defined as an organisation which facilitates the learning of all its members and continuously transforms itself (Peddler, Boydell & Burgoyne, 1988). Senge’s concept of learning organisation also described it as, “organisations where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free and where people continually learn how to learn together,” (cited in Robbins et al 2003). Against this background, the culture of the organisation can be continually moulded on the changes taking place. The following steps can be taken into consideration to ensure sustainability of the change initiative through organisational learning. Managers should lead by example every time. Indeed, they are the ones who determine how the organisation ought to operate. Democratic, participatory leadership style can enhance positive performance of the subordinates if they are given high levels of autonomy. In this regard, the leaders must communicate a vision that is conducive to their operations and can encourage subordinates to find solutions to problems in an innovative way. It can be noted that leaders who empower the individuals in decision making or solving problems are more likely to produce better performance standards. Training is very important in ensuring the sustainability of organisational change. One advantage of offering training and development skills to the employees is that it promotes learning within the organisation where they would have hands on experience with its operations. In this regard, there ought to be open channels of communication in the organisation where there is free flow of information and the employees should take a role in contributing towards decision making as a way of creating a sense of belongingness. On the other hand, another lesson drawn from the case study shows that the system to be employed ought to be accommodative to a diverse range of views and ideas in order for it to be sustainable. Learning is no longer restricted to individual experience but has become teamwork which requires new and innovative ways of learning and managing performance improvement. Change is a process and it usually requires the involvement of various stakeholders particularly the workers. The process of team formation is influenced by different factors. Basically, the process begins by identifying multiple skills among the workers who can play a vital role in ensuring meaningful contribution towards work. This process also involves identifying people with experience and skills in a bid to effectively utilize employee talents. Thus, according to Robbins et al (2001), teamwork is where individuals participating collectively, work together towards the attainment of certain goals as well as objectives within a given organisation. Real learning which forms the basis of teamwork takes place in teams where team members learn from each other, learn from their achievements and mistakes, and continuously learn to optimise their efforts and contribution towards the achievement of organisational goals. From this assertion, it can be noted that the underlying principle towards the success of teamwork is sharing of ideas and the willingness to learn from other team members among the team. 6 Conclusion Over and above, it can be noted that implementing a strategic change is not a one day off event but requires concerted efforts especially by the human resources involved in the organization’s operations. The planned approach to change is more ideal in this case of General Motors which has been witnessing a negative development in its operations. There is need to identify the agendas of the stakeholders as well as put in place techniques to manage resistance to change such as conflict management, leadership as well as motivation. For the initiative to be successful and sustainable, there is need for reorientation of the workers through provision of basic training and development which would be closely monitored upon implementation. It can be noted that learning in an organisation is greatly influenced by how people relate and interact and communication plays a vital role in achieving this feat. Bibliography Amos T.L. et al (2008). Human Resources Management. 3rd Edition. JUTA Brand, A., 1998, Knowledge management and innovation at 3M, Journal of knowledge management, Vol. 2 No.1 Carrell, R. et al (1995). Human Resources Management: Global Strategies for managing a diverse workforce. 5th Edition. NY. Prentice Hall. Case study: The General Motors bankruptcy—GM arises from the ashes (2005). Available at: http://support.dell.com/support/topics/global.aspx/support/security/security?c=us&cs=19&l=en&s=dhs [Accessed on 16 September 2010]. Jackson, S.E. & Schuler R. (2000). Managing Human Resources: A Partnership Perspective. NY. South Western College Publishing. Kleynhans R. et al (2007), Human Resource Management: fresh perspectives, Prentice Hall SA Locke, E. A. and Kirkpatrick, S. A., (1995). Promoting creativity in organizations. London. Thousand Oaks: Sage Publications. Peter Senge and the learning organisation (n.d). Available at: http://www.infed.org/thinkers/senge.htm [Accessed on 16 September. 10]. Pfeffer J. (1998). The Human equation: Building profits by putting people first. Boston MA: Harvard Business School Press. Robinson W (1997), Strategic Management and Information Systems, 2nd Edition, Prentice Hall, UK Robins S.P., Odendaal A.& Roodt G. (2001), Organisational Behaviour, Pearson Education Schultz et al (2003). Organisational behaviour. CT. Van Schaik Publishers. Rossouw, D. (2003). Strategic management. CT. NAE. Strydom J. (2004), Marketing, 3rd Edition, Juta & Co Ltd, SA. Susan EJ & Randal S (2000), Managing Human Resources: A Partnership Perspective, South Western College Publishing. Werner A. Et al (2007). Organisational behaviour: A contemporary SA perspective.2nd Edition. Van Schaik Publishers. Read More