Managing Change - Literature review Example

Managing Change Businesses and organisations must adopt strategies suitable for survival and success in the modern competitive and changing market place. However, adapting to change is normally difficult as most managers are accustomed to traditional way of doing things. Organisational change occurs when a business changes its operations, processes, strategies and/or systems from the current state to the desired future state (Grabot, Mayère and Bazet, 2008). Managing organisational change entails planning and implementing new strategies in a manner that minimises employee resistance and expenses while maximising the effectiveness of the change process. Senior and Swailes (2010) state that the survival of businesses in the 21st century requires managers to constantly and effectively implement change strategies in order to remain competitive. The rapidly evolving economy and the globalisation of markets are factors that all business managers have to cope with in their attempts to improve and manage business activities. Organisational changes normally arise as a solution to the past problems and nasty experiences that the organisation may have faced. The current changes in organisational management are occurring under the impetus of young and enlightened leaders and/or managers who identify and exploit the dormant potentials in organisations for improvement. However, organisational change is also resisted leading to failure in some organisations. In most cases, failure results from the manner in which managers visualise, announce and implement change or the general internal resistance. Development of successful strategies that exploits external opportunities and overcomes threats related to changes in the external environment requires detailed analysis of organisational capabilities. This is necessary in the establishment of a fit between the company’s resource capability and the reality of the external situation (Wall, Zimmerman and Klingebiel, 2010). Internal analysis will enable managers to identify the organisational capability in relation to the environmental changes in implementation of favourable strategies that promotes business success. Many of the strategic development issues are involved in changing the strategic capability of an organisation to fit well in a changing business environment. Additionally, stretching and exploiting the organisational capability in the creation of more opportunities is crucial in understanding the inherent capability that the organisation possesses. Balogun and Hope Hailey (2008) purport that the organisations strengths and weaknesses, together with its ability to execute its strategies is more crucial in enhancing performance than the contribution of environmental factors. Internal capabilities and process execution enables organisations to gain a competitive edge to its competitors even with the disadvantage of inadequate resources. Organisational capability is a product of the resources possessed. These resources are identified as assets, capabilities and competencies. Assets, as the factors of production, ensure that the organisation maintains a competitive external environment through constant provision of goods and services. Assets are classified as tangible e.g. property or intangible e.g. organisational culture. Maximum utilisation of the factors of production requires the managers to develop and utilise the talent within the company. Egelstaff and Chattopadhyay (2008) suggest that two firms may add value in varying levels with similar assets. The difference emanates from the manner in which the two companies utilise the internal capabilities in the utilisation of the assets. For instance, the difference in the output levels among companies operating in the same industry and with similar resource levels has been noted in Indian companies such as Hindustan Unilever (Kundu and Malhan, 2009; Egelstaff and Chattopadhyay, 2008). The disparity in the skill utilisation within the two companies causes the differences in productivity in these companies. The managerial capacity to analyse the internal capabilities and its relationship to the changes in the business environmental enables the manager identify the success critical factors. Success critical factors are the factors that contribute to success of an organisation operating in a competitive environment. One of the critical sources of success factors that a manager should invest attention is industry characteristics (Isaksson, 2006:632-645). For instance, the critical success conditions for an airline industry are fuel efficiency, impeccable reservation services and efficient load factors. The critical success factors of an organisation may also be determined by its competitive position. Most business industries are dominated by large players that determine the success factor for the small players. For instance, large players in the airline industry determine the factors that should be maintained by the small airline players in ensuring competitiveness (Trkman, 2010:125-134). This implies that the manager must analyse the external environment in terms of competitiveness and formulate effective strategies necessary to maintain a competitive edge. Organisations that live the test of time in coping and adapting to change are the ones that managers inspire passion and not problems as well as counsel or coach rather than control and command. They also possess the capability to sustain these qualities in ensuring that an organisation thrives competitively in a changing business environment. The organisation is required to streamline its internal processes and systems to reflect and adapt to external changes, a role predominantly spearheaded by the management. According to Senior and Swailes (2010), the dimensions of change that organisational management should focus on when managing organisations include the long-term corporate objectives, the quality of human resources, organisational culture and value, business strategy, management style and the working climate. The corporate objectives of an organisation are the quantified goals that the organisation is predicting to achieve such as the return on investment and profitability. Objectives represent the strategic vision of an organisation under normal business environment. However, achievement of the objectives depends on the strategies that the management puts in place to ensure minimal impacts related to change in the business environment. Therefore, the manager should identify opportunities to clearly utilise them efficiently and effectively. The manager should also ascertain the extent of communication and decision-making progress within the company. This helps them estimate the extent of role delegation and decentralisation within the organisation. It also helps in aligning the internal processes to conform to the current cultural changes as well as utilise the traditional cultural concepts that enhances the business performance. Another area crucial for the manager to ascertain the organisation’s preparedness to change is the analysis of its policy objectives. One of the methods of analysis is determining whether the company’s strategies are consistent with each other. The manager should also investigate the organisation’s response to the external environment through reference to the successes of failures of the past (Burnes, 2009). Human resource management factor includes the promotion or rewards offered depending on the employee performance. Armstrong (2008) projects that this aspect of change also focuses on the policies that the company adopts in enhancing personal growth e.g. job rotation or enlargement. Any changes to human resource management should be primarily focused on the extent of motivation and the commitment levels among employees, particularly the ones occupying the low levels ranks of management. Their sense of commitment should be ascertained to investigate whether it is rewards related or it is self-motivated. This assists in enacting change strategies that encourages self-generated motivation attitudes of the employees for sustainable organisational growth. If the commitment is reward-based, employee performance deteriorates once the rewards fade. The manager should also ascertain the ability of the employees to work as a team and share credit for the achievement made from the team-based activities rather than individuals. Focus on culture and values will involve analyses of the values and aspirations that characterise the performance improvement strategy of the organisation (Zulu, Murray and Strydom, 2004). The cultural configuration of a company is a product of the values that defines the high standards of performance and the work ethics that the employees possess. Zulu, Murray and Strydom (2004) posit that the cultural change in an organisation is a product of both external and internal factors. The composition of the workforce may lead to change in the culture whereby new or overtime workers entering an organisation may impinge on the inherent culture of the organisation. Most of them introduce foreign cultures in their designated roles. Organisational culture may also be changed by mergers and acquisitions. Most organisations rarely give necessary attention to the acquired firm’s culture although research has confirmed that incompatible cultures leads to culture clashes that, according to Zulu, Murray and Strydom (2004:207-217), have negative impacts on the organisational performance. The planned organisational changes may also lead to cultural changes. For instance, application of new technology leads to cultural changes through transforming the employee behaviour as well as organisational productivity. Analysis of the cultural set-up of an organisational enables the manager to identify the most effective change strategies suitable for improving performance. For instance, the manager can compare the successes of the current culture with the possible benefits that the organisation stands to benefit through adoption of a different culture. The organisational management also determines the degree of integration of innovation by the company. Effective formulation of change strategies will also require the management organs to evaluate the work organisation within the firm. The work organisation structure should be characterised by the clarity of roles, obligations and relationships; otherwise, change is necessary. The change enacted in work organisation structure should allow solving of any potential problems and enhance entrepreneurship (Wall, Zimmerman and Klingebiel, 2010). To manage changes related to the culture of an organisation, Senior and Fleming (2006) advise the new managers to identify the basic beliefs and practices and challenge them if they do not conform to the goal of enhancing the organisational performance. The stated and unstated core values should be defined or re-defined depending on whether they are relevant or irrelevant to the organisational growth. The cultural change strategy should also involve the analysis of the organisational climate to decipher whether it is suitable for the enhancement of employee motivation (Zulu, Murray and Strydom, 2004). The manager should analyse the current management style and the compare with the intended changes to identify whether the one being introduced will be efficient in delivering the expected performance. The analysis of the above factors should provide the necessary information on the aspects that requires to be changed and the ones that does need to be changed. The power to alter the cultural orientation of a company lies squarely under the obligation of the management. Changing the culture of an organisation is not easy because employees have been conformed into a unique and defined way of acting i.e. tradition. The manager should understand that changing the culture of an organisation requires patience because the behaviour is normally deep-rooted. Some of the strategies that the management can apply in changing the culture of an organisation include facilitation of integration, creation of new departments or jobs responsible for presiding over the new roles or jobs and eliminating unworthy departments in an organisation. Additionally, managers can alter culture through developing the organisation to improve its capability to adapt to change, enhancing communication to ensure information dissemination, training employees on the new ways of operation within the organisation and recruitment or new work force (Palmer, Dunford and Akin, 2009). For the manager to succeed in the modern shifting marketplace, they should first accept the inevitability of change. Some of the signs of the failure to manage change include mass confusion on the direction and goals of the organisation, failure of the leaders to cope with the changing demands and customer dissatisfaction. Effective managers apply change strategies that enhance diversity management among the organisational stakeholders. Armstrong (2008) defines diversity management as the process that involves creation and maintenance of a positive work environment that values the differences and similarities among the work force. This encourages employees to work towards organisational goals. Diversity is a form of positive change in an organisation. In ensuring the corporate social responsibility, the proprietors of the change process should involve all the stakeholders involved in a change process. Stakeholder engagement will involve establishing and maintaining relationships. It also involves arresting the commitment of the stakeholders to implementation of change. The stakeholders that the manager has to handle include shareholders, employees, community, interest groups and customers. Stanford (2007) posits that a stakeholder oriented strategy includes assessment of their interests, and influence, identifying the risks and mitigating strategies, identifying the outputs from stakeholder mapping as well as creation and mapping of stakeholder action plan. Change is effectively managed in an organisation through intervention. Intervention refers to all the strategies formulated to facilitate change at all levels of organisational configuration (Palmer, Dunford and Akin, 2009). These intervention strategies are meant to improve the functioning of an organisation; ensuring efficiency and effectiveness. The internal changes are caused by organisational employees while hired consultants facilitate the internal change process. In this case, the manager should enhance close interaction between the consultants and employees to ensure that the changes promote business activities. However, the current business management culture has led to the change in these roles; reversing them to managers. The manager can undertake intervention strategies at the task, process or system levels. For instance, in Coca Cola Company the determination of the strategy of making a decision can be at a task level while creating better synergy at work can be conducted at the system level (Senker and Foy, 2012). The various intervention strategies that a manager can undertake in response to change can be classified according to their focus and purpose as well as their intensity (Stanford, 2007; Burnes, 2009). The focus on intervention can be intrapersonal or interpersonal, intra-group or intergroup, system or sub-system, organisational and external environment. The purpose of an intervention strategy is the improvement of processes, performance or provision of feed back for an enacted change process. Additionally, an intervention intensity can be less or more intensive. The most effective interventions that promote and implements effective change are team interventions. Team intervention entails the focus on four prominent substantive areas: diagnosis, task accomplishments, relationships among the team members and organisational process. The focus on enhanced change processes has been enhanced by the recent upsurge in the global competition and the evolution of the information age, where information is the basis of organisational management (Wall, Zimmerman and Klingebiel, 2010). This has thrown many organisations into disarray because information dissemination is compulsory for effective management. This implies most managers have been obligated with a compulsory obligation of ensuring that all structural necessities are implemented to enhance information spread in an organisation. The management has been forced to spearhead the changes involved in abandoning the traditional processes, systems and skills and applying new strategies that meet the requirements of the industrial era. According to Senior and Swailes (2010), the frequency and magnitude of change is greatest in the 21st century than before. Effective undertaking of a change strategy can be conducted through application of organizational development model. The model incorporates three phases of change. Unfreezing (first phase) involves creating the awareness of the need for change. The second phase (freezing) involves exploration and identification n of new strategies of performing roles. The last phase is refreezing; involves integration of the new behaviour into system functioning (Kljajić, 2009:119-128). Most of the change strategies enacted by managers are geared towards transforming an organisation into a system. According to Palmer, Dunford and Akin (2009), a system is a set of interdependent entities or sections that forms an integrated whole. Systems’ thinking is transformation from elements and functions into structures, processes, relationships and outcomes based on holistic reality (Haines et al 2005). The idea of systems thinking is an attempt by the managers to apply the concept of system thinking in solving organisational problems. Change management may involve the inclusion of hard or soft systems of thinking depending on the magnitude of the causes for change (Lenka, Suar, Mohapatra, 2010:79-101). Hard systems thinking is most appropriate in solving technical problems while the soft systems thinking is applicable solving change problems with less magnitude. The hard systems model of change involves designing and implementation of change in the situations characterised by complexity of problems. Such situations are the ones that most of those involved confirm of their existence. Hard model systems may also be applied in situations requiring application of quantitative criteria in testing the options necessary for change. According to Lenka, Suar and Mohapatra (2010), the model is suitable for situations that experience the predominance of unitarist ideology. The hard systems approach of change management involves problem definition, choice of objectives, systems synthesis, systems analysis, systems selection, systems development and current engineering. However, the drawbacks of this system originates from the fact that it does not take into consideration the fact that all the information that may be required by decision makers may not be adequately available. Testing various models is a time-consuming process especially if the models will be built and tested. The manager can also apply the soft systems change management model if the situations cannot be quantified e.g. employees holding several and conflicting frames of reference (Lenka, Suar, Mohapatra, 2010). The soft change approach views organisations as social entities requiring negotiation and participation for attaining goals. The approach takes the form of a consensus view of the organisation. This approach aims to identify and improve problems. The soft systems thinker manager will interpret an organisation as a complex system full of socio-cultural phenomena. The soft system model contains seven stages that help a manager to understand employee motivations, interaction and choices. This enables them to address change through application of both quantitative and qualitative change situations. The seven stages include: investigation of the unstructured problem situation, expressing the problem situation through vivid models, clear definition of the relevant problems, application of the conceptual models, comparing the unstructured problem situation and the situation analysed, debating on the desirable changes and implementing the changes (Lenka, Suar and Mohapatra, 2010:79-101; Palmer, Dunford and Akin, 2009). Conclusion Organisational change occurs when a business changes its operations, processes, strategies and/or systems to superior structure that delivers the required performance. The essay discusses change management through analysing the relationship between environmental change and organisational capability and the nature of change. Additionally, relationship between organisational culture and change was evaluated. Some of the contemporary issues discussed include globalisation, corporate social responsibility, diversity as well as hard and soft models for managing change processes. Reference has been made to Hindustan Unilever and Coca Coal Companies. Success in the modern change management requires enlightened leaders and/or managers who identify and exploit the dormant potentials in organisations for improvement References Armstrong, M. (2008) Strategic human resource management: a guide to action, London, Kogan Page. Balogun, J. & Hope Hailey, V. (2008) Exploring strategic change, Harlow, Pearson Education. Burnes, B. (2009) Managing change, London: Pitman Publishing. Egelstaff, R. & Chattopadhyay, G. (2008) Application of performance measure frameworks for improving asset utilisation, Brno, Czech Republic, Czech Society for Non-Destructive Testing. Grabot, B., Mayère, A. & Bazet, I. (2008) ERP systems and organisational change: a socio-technical insight, London, Springer. Haines, S.G, Aller-Stead. G. & McKinlay. J. (2005) Enterprise wide change – superior results through systems thinking, Wiley, San Francisco. Isaksson, R. (2006) ‘Total quality management for sustainable development: Process based system models’ Business Process Management Journal, vol. 12, no. 5, pp. 632-645. Kljajić, M. (2009) ‘The relevance of systems methodologies in the development of organizational systems’ Organizacija, vol. 42, pp. 119-128. Kundu, S.C. & Malhan, D. (2009) ‘HRM practices in insurance companies: A study of Indian and multinational companies’ Managing Global Transitions, vol. 7, no. 2, pp. 191-215. Lenka, U., Suar, D. & Mohapatra, P. (2010) Soft and Hard Aspects of Quality Management Practices Influencing Service Quality and Customer Satisfaction in Manufacturing-oriented Services Global Business Review, 11, 1, 79-101. Palmer, I., Dunford, R. & Akin, G. (2009) Managing organisational change: a multiple perspectives approach, Boston, McGraw-Hill Irwin. Senior, B. & Fleming, J. (2006) Organisational change, London, Financial Times Pitman Publishing. Senior, B. & Swailes, T. (2010) Organisational change, London, Financial Times Pitman Publishing. Senker, C. & Foy, D. (2012) Coca Cola: the story behind the iconic business, London, Wayland. Stanford, N. (2007) Guide to organisation design: creating high-performing and adaptable enterprises, London, Economist. Trkman, P. (2010) ‘The critical success factors of business process management’ International Journal of Information Management, vol. 30, no. 2, pp. 125-134. Wall, S., Zimmerman, C. & Klingebiel, R. (2010) Strategic reconfigurations: building dynamics capabilities in rapid innovation-based industries, Cheltenham: Edward Elgar Pub. Zulu, N., Murray, L. & Strydom, J.F. (2004) ‘Quality, culture and change’ Quality in Higher Education, vol. 10, no. 3, pp. 207-217. Appendices APPENDIX 1: Team Building Source:http://www.management4all.org/2009/11/interventions-for-change.html APPENDIX 2: Organisational Development Model for Change Source:https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcRmPX9gwALoA2dfti4ANxl933Ffz9_BurrFO4NRh1gdhZFIwMkt APPENDIX 3: Stakeholders of a Change Process Source:https://encrypted-tbn3.gstatic.com/images?q=tbn:ANd9GcRxed0lUZShq6HpkZmYkdUg1yegNdDuALT3o7upyTodZCyO4paX APPENDIX 4: Hard Systems Approach of Change Management Source:http://www.open.edu/openlearn/science-maths-technology/computing-and-ict/systems-computer/systems-engineering-challenging-complexity/content-section-3.8 APPENDIX 5: Soft Systems Approach of Change Management Source:http://www.open.edu/openlearn/science-maths-technology/computing-and-ict/systems-computer/systems-engineering-challenging-complexity/content-section-3.9 Read More