Change Models for Better Understanding of Organizational Changes - Case Study Example

Change Models Management Introduction Regardless of industry, size and how old a company is, ‘change’ occurs frequently in all types of businesses. The world is changing at a fast pace and, hence, organizations should also change rapidly too. Organizations that can handle change well survive, whereas those which do not, struggle to survive and may eventually fail. Today, concept of "change management" is a not unfamiliar most of the businesses. Although, how companies manage change and their level of success varies extremely depending on the change, the nature of the business and the people involved. It also depends on how far the change process is understood by the people within. Kurt Lewin developed a change model for better understanding of organizational changes. The model is known as Unfreeze – Change – Refreeze. He explains ‘unfreeze’, ‘change’, and ‘refreeze’ as three steps of the change process. (Lewins Change Management Model, 2011) Unfreeze: It is the first stage of change which includes preparing the company, more specifically the people involved, to acknowledge that change is necessary. He calls this step ‘unfreeze’ as it is breaking down of the existing status quo before building up a new way of functioning. To achieve the breaking down of status quo one has to show that the things are not working the way they are and it can be done by pointing out poor financial results, declining sales figures or unsatisfied customers. To bring about a change in an organization, one has to challenge the values, beliefs, and attitudes that currently define it. The initial part of the change procedure is often the most stressful and difficult. Everything and everyone is put off balance when the things are not done the way they used to be anymore. Unfreeze part might evoke strong reactions in people. Strong Motivation is needed successfully implement a change. Change: After creating uncertainty in the first part, to resolve that uncertainty people tend to look for new ways to do those things. People are usually resistant to changes and do not readily embrace the new pathway and take part proactively in the change. Therefore, the transit from unfreeze to change takes time. Not every person in an organization accepts the change and there is need of understanding of how the change will be beneficial to people. Refreeze: The final step of this change model is ‘Refreeze’. It occurs when the people embrace the new methods of working. The apparent signs of this stage are consistent job descriptions, stable organization chart, and so on. To make the whole process of change successful it is important that the new strategy is used at times and is incorporated in everyday business. The refreezing part holds a great degree of significance, as without it employees are caught in the transition stage and are not sure in which direction they must go. To see the practical implementation I will discuss this change model in reference with examples from the Ford Motor Company. It is the second-largest automobile company of the world; and is known generally as a producer of automobiles. Ford Motors is also the leading rental company of automobiles not only in United States of America but also the world. It owns The Hertz Corporation, and also produces vehicles under the names Mercury, Lincoln, Jaguar, Land Rover, Volvo and Aston Martin. Ford also operates the Mazda Motor Corporation. (Ford Motor Company). Over the time there have been many ups and down at ford Motors and the Company stabilized their operations by bringing about changes. New Product Development The demand for hybrid vehicles was increasing at a fast pace, and people were asking for more than the pocket sized cars offered by Honda and Toyota that were first on the Market Ford Motor Company decided to be the first automobile manufacturers to produce the hybrid SUV. Bill Ford, the Chief Executive Officer of Ford Motors, raved for many years about strategy for a new car model that would work like a muscular V6 but utilize tiny amounts of fuel and produce minimal emissions. The new model was to be the most technologically advanced vehicle ever manufactured by the company and possibly the most important after the Model T. The Escape Hybrid SUV was an extremely different product from the vehicles already being manufactured at Ford Motors and hence required nine new technologies. Ford did not want to patent licence of these technologies from Toyota’s hybrid system but wanted to develop all nine technologies in-house. Bringing about one main technological change in company is a great challenge and here Ford had to breakthrough nine. This called upon for major changes in the already existing organizational structure of the Ford Motors and re-engineering of the manufacturing processes. At Ford Motors, the engineers and researchers typically did not work closely together; rather they were placed in different departments in different buildings. To meet the challenging schedule for manufacturing the Hybrid SUV and get it on the market, Ford Motors needed to bring together people from different departments. This is the first step ‘Unfreezing Stage’ of the change model discussed above. The employees who had worked separately before this had to work together now. To change the existing method of working, Ford Motors had to motivate their employees on working together and demonstrate the positive results that might be achieved by it. Motivation must be generated for the employees involved to make that change happen. To change the mindset of people, they must be given some sort of incentives. In order to bring about change with fruitful results, high level of understanding and involvement from the employees is also required (Odums, 2007). As the whole concept was new, the employees were encouraged to take risks. The team to work on this new project was selected very carefully, selecting only the people who would be open to changes and would cooperate. According to Lewin’s change model, the second step is change which was brought by making a cross functional team. An Escape Hybrid Team was formed at Ford Motors which was a mix of scientists, researchers and engineers from different departments of the company. This team was given autonomy which was not a common practice here at Ford Motors before. To optimize productivity, the hybrid team was given permission to be entrepreneurial. The decision making was also decentralised and hence making it possible to take decisions there and then which otherwise would have taken several days. The third step ‘refreeze’ is to sustain the change. The team worked according to the new methods to successfully produce the desired results. The Ford Escape Hybrid was launched in the market right on schedule meeting all the challenges of working under changed condition with new technologies effectively. This new model was declared the best truck at the 2005 North American International Auto show. Ford Motors decided to use the newly developed technologies for next three years to and use them to introduce four more models of hybrid vehicles. The whole change process was a success at Ford Motors (Daft, 2009). Downsizing and Implementation of Information System One other remarkable breakthrough at the North American Accounts Payable Department of Ford Motor Company was when a few of the organization’s managers in their visit to Mazda in Japan found out that the work which was performed by five hundred people at Ford Motor was performed by five people at Mazda. The management realized that there was a need to rethink the entire process of procurement instead of only attempting to enhance the accounts payable system. This was the unfreezing stage when the management realized that less people could perform the same quality of work. This part was very difficult and stressful as it meant that employees had to be fired. It was essential to make the remaining employees understand that whatever was being done was for the ultimate good of the organization. This change reframed the entire business problem faced by the company, giving a new perspective for finding a solution where the receiver of the payment could approve payment for goods sold backed by relevant purchase orders. An appropriate information system was used to support this new process. At once the need of staff to perform the old function of accounts receiving decreased. The staff was reduced to five percent of the original number. A small finance team was formed to handle exceptional state of affairs (Morgan and Zohar). The permanent installation of the appropriate information system refroze the change that was implemented. The people were trained to work in accordance with the new system. This change was a success. Ford Motors got the idea to change the accounts receivable function when they saw a better system implemented in Mazda, Japan. Company profited from this breakthrough process and it was only possible because the executives were open to implementing new ideas in their company. Changes Yet to be Made The businesses have entered the era of continuous change now leaving behind the era of continuous improvement. Leadership vs. management, adaptation vs. adherence, and flexibility vs. rigidity are the philosophical changes that many organization’s chief managers now acknowledge as crucial to prospect growth and sustainability. The concept of doing things faster, cheaper and better is no longer applicable as the ‘things’ have changed. The focus of an organization must shift to leading the organization through continuous change process. This would help to raise awareness of the employees regarding the significance of innovation and challenge the existing products and service. This would not only change the pace of competition, it is also important for a company to stay in competition. Nowadays, the competitive market place is determined by the consumers. They are the ones who dictate the value of services and goods, specifies acceptable performance levels concerning the delivery of services and goods, and dictates the location where they prefer to purchase their services and goods. A business is supposed to focus on how to keep pace with these fast shifting demands. The key solution is continuous change. Even though Ford Motors is one of the leading automobile organizations of the world, to maintain its reputation the company needs to undergo changes on routine bases. The company has introduced several new products, launched entirely new product lines and has acquired many companies throughout their existence. But, still there is a need to make more changes. It’s high time that Ford Motors should start online booking of cars. The introduction of safe and secure methods of online payment has encouraged the customers to make online orders and also pay the companies online. It is a more convenient way for making purchases for the customers as sometimes they cannot visit the physical showrooms. Trust of customers is not an issue for the customers as Ford Motors has already build their name in the market. The introduction of this new service would require some changes as the concerned employees would need training to use the specific software. It may also require some changes in the organizational structure. Conclusion As seen from the above examples of Ford Motors it is quite evident that change is imperative not only for success but also for survival. A change process might have yield adverse effects but it does not mean that the decision to make a change was wrong. It might be the change one decided to implement was not the right solution or it was not implemented the right way. Organizational behaviour is a main factor n the success of a company. The conduct of the organization must be open to changes (Grant, 2010). There are certain steps which help to bring about the change successfully. Time at which the change is implemented is very crucial. To yield maximum results applying change at the right time. Another essential element of making effective change is communication. The people involved in change process require time to comprehend the changes and the need of these changes. They also want to feel well connected to the business during the transition period. Managing a change might require a great deal of effort and time. Hands-on management is one of the best approaches. References Daft, L, R. (2009). “Organization Theory and Design”. Retrieved from http://books.google.com.pk/books/about/Organization_Theory_and_Design.html?id=CmFjF5tNmuEC Grant, S. (2010). “Diversity in Healthcare: Driven by Leadership”. Frontiers of Health Services Management. 26(3). Pg 41. Lewins Change Management Model. (2011). Understanding the Three Stages of Change. Retrieved from http://www.mindtools.com/pages/article/newPPM_94.htm Morgan, G. and Zohar, A. (n.d). “Organizational Success Stories are Stories of 15% Change”. Retrieved from http://www.imaginiz.com/provocative/change/success.html#ford Odums, G. (2007). “Now that you have them, how do you retain them?”. Diversity Factors, 15(2). Pg. 12. Read More