Organisational Change Management - D2 Company - Case Study Example

Organisational Change Management Introduction The French car components manufacturing firm, D2, has experienced problems that have compelled it to make a considerable number of changes to its structure. This is a normal trait that is being experienced by many car-parts manufacturing establishments around the world. The greatest challenges to such institutions come from emerging economies that provide various car-parts at lower prices than those available in the developed economies (Pavlínek, 2008). These markets have cornered the car-parts industry, compelling corporations such as the D2 Company to make rapid decisions on how to remain competitive and survive this onslaught. The strategies that the D2 Company have taken to survive in this competitive industry include closing down its less productive facilities, streamlining production wherever possible so that capital can be saved, shutting unproductive facilities and investing in new facilities that use the most recent technologies. Moreover, the workers of the D2 Company have not been informed of these proposals. There are different theories of organisational change that are used by various corporations to oversee necessary change within their workforces. Theory Y and Theory X Douglas McGregor came up with the ‘theory y and x’ model of organisations (Amagoh, 2008). He asserted that mangers think in different ways as regards the behaviours and work attitudes of their employees. McGregor named the contrasting ways in which managers view the efforts of workers as the theories X and Y. The manager who has a Theory X outlook tends to believe that his or her employees are slothful, and prefer to laze around and do nothing rather than fulfil their obligations. The theory ‘X’ manager also believes that his workers are uninspired and will try to avoid taking responsibility for any tasks whenever they can. This means that the manager will always view his main duty as ensuring that his workers are not allowed to take advantage of company property or skip their duties. He will try to make sure that he is always supervising them to ensure that they fulfil their work quotas and will keep trying to control their actions by means of giving rewards to workers who accomplish the most in the shortest time while penalising the workers that he deems to be lazy. The theory X manager does not believe in the inherent goodness of his workers (Cooperrider and dan Whitney, 2001). To him, it is pointless to allow workers to exercise good judgment or determine how they should conduct tasks because it is their belief that the employees are not really interested in participating in such decisions. For such managers, any acute involvement of the workers in decision making can actually negatively affect product quality. Theory Y managers, on the other hand, do not believe that their employees only live for their pay checks and are not interested in improving the companies that employ them. They believe that when workers are interested in seeing the company achieve its organisational goals, they will not have to be supervised to ensure that they do a good job wherever they are stationed. The managers who support theory Y also do not believe that the only way in which the company can improve is by controlling its workers. This is a deeply important aspect because it affects the managers’ relationships with their employees. In the D2 Company, it would appear that the D2 managers favour the theory X concept. This is evident in the way that employees are not informed about the serious decisions that the company management is making even though these decisions will adversely affect the lives of the employees. Many employees of the D2 Company may be deeply surprised when they are finally informed that the company is struggling because there were no previous hints from the management that this was the case. In addition, the D2 Company plans to shut down the Didcot facility and relocate other employees to more productive facilities in Spain and France. The employees who will be affected by these changes do not even have a hint that the D2 Company is experiencing serious problems. This is because the D2’s managers, as described in the theory X method of assessing workers do not feel that workers really care about their company’s ability to realise objectives. This means that they are only ever informed of the superficial issues concerning the performance of their tasks and are not ‘troubled’ with issues regarding the performance of the organisation. Essentially, when managers encourage the development of an organisational culture that reflects the theory ‘Y’ assumptions, the entire company has the possibility of improving (Ferlie, 2007). Managers who sincerely believe in the ability of their workers and openly show this belief to their employees also tend to decentralise authority in order to give their workers the chance to participate in creating positive change. In such as setting, the manager does not control what her employees think and do but supports their proposals and offers guidance in any challenging areas. The D2 Company might actually have benefitted from the input of its employees if it supported an organisational culture that would encourage employees to volunteer their ideas on how to save the company without cutting jobs or relocating employees. Employees Reactions to Change The D2 Company has plans to retrench the workers who operate in the Didcot plant while relocating others to Spain and France. This is something that the D2 managers might have mentioned in the past so as to prepare employees who will be affected by these moves to make the necessary preparations. Surprising employees with such information is something that can result in legal action because they are adversely affected and had not been previously accorded enough time to deal with the issues they are presented with. Everything in the way that the D2 Company is carrying out its operations shows that its managers are supporters of the theory X views as concerns its employers. For instance, it expects to inform the workers who are to be redeployed to Spain and France about this change just before they are needed in their new places of work. This is probably to spare the company any legal suits or demands from disgruntled workers who will have to swiftly make decisions about whether their families will travel with them or remain behind while they commute on a weekly basis. In reality, if an organisation is not getting the reactions that it wants from its employees, it usually means that the company’s managers have the wrong mind-set; not the employees. The D2 Company must have had previous experiences with disgruntled employees that made this type of reaction seem the safest way of interacting with them in future. However, what the D2’s managers failed to learn is that it was them on the wrong, and not the employees. New changes within the organisational structure such as disposals, targets, structures, and re-locations all form new business environments and systems that have to be explained to the workers as early as possible, so that their involvement in improving and validating the new processes can take place (Magruder and Mohr, 2011). Whenever an organisation like the D2 Company enforces new changes on its employees without previously having informed them about the changes, the workers will undoubtedly have difficulty in accepting and implementing the changes. The D2 Company might have used workshops to inform its employees of the necessity of closing down the production plants that were not bringing as much gain as had been expected. It might also have tackled the question of relocations and asked for suggestions on how the employees thought the company could bring improvements without necessarily cutting jobs. It would be impossible for the D2 Company to fulfil its corporate objectives on time if its workers made the decision to refuse the suggested changes. Even if it considered hiring other people to take the place of disgruntled workers, this would take time and completely change the organisational culture dynamics (Paraskevas, 2006). In reality, managers have to facilitate change. They cannot just declare the necessary changes to be implemented and expect for this order to be followed. Organisations cannot impose changes on their workers, if there is to be satisfaction on both sides. Employees have to be empowered to come up with solutions of their own to deal with the problems that they are facing in their particular departments. The changes that the workers finally make are then supported by the managers of the organisation. This is the only way through which an organisation’s workers will trust its management. If managers do not choose to implement the changes that the workers have come up with, the process of change will not take place and the organisation can even end up losing some of its best employees. Recommendations on Change The worker’s responsibility is not to actually oversee the change that takes place, but to come up with practical suggestions to handle a problem. The managers, on the other hand, supervise changes and adopt them in ways that are practical for their employees to use. In today’s contemporary society, managers are tasked with the job of enabling and communicating with their workers during the process of change, as opposed to imposing their views or instructing on how to achieve change (Sherif, 2006). An authority on organisational change management, John Kotter, came up with a helpful model for overseeing processes of change in organisations (McKendrick and Wade, 2010). Each phase of Kotter’s model has a key principle that connects the reactions of employees and their approaches to change. Organisational workers using this model are allowed to see the change, feel it; and only then do they make the change (McKendrick and Wade, 2010). Kotters change model has the following eight steps: 1. Increase urgency – In this phase, managers can encourage employees to comprehend the new objectives and think of different ways of making them real 2. Decide on the guiding panel – In this stage, the workforce in general comes up with suggestions on the people who have the get the right emotional disposition as well as the skills that are necessary to oversee the change 3. Understanding the vision – In this phase, the chosen team from the second stage comes up with a simple and easily understood vision and comes up with the factors that will enhance efficiency. 4. Communicate with others – In this stage, personnel are encouraged to discuss he changes and are given comprehensive responses in all areas where they foresee challenges 5. Empower Action – In this stage, hindrances are removed; thus allowing for employees to be able to give feedback on the implementation of the changes. The managers extend support to the employees and recognise and new developments 6. The use of short-term wins – In this stage, the managers come up with objectives that are easy to attain and ensure that they complete one before taking on another 7. Refuse to give-up – In this stage, employees are encouraged to persist in their endeavours to assimilate to the ongoing changes. All milestones that have been realised are highlighted and employees are encouraged to pursue the remaining ones 8. Making the changes become permanent – In this stage, the managers reinforce the significance of the successful changes by bringing in new leaders, promoting hardworking employees who have been a part of implementing the new changes, and recruiting other workers who are skilled in areas that are a part of the new changes. The D2 Company’s managers could use this model to oversee the changes of operations in the plants where they aim to invest massively as well as in those to which some of the workers from the Didcot plant will be relocated. However, even with all those considerations, change may not easy to implement because all the workers have to undergo a personal change experience for the process to be successful. This will be harder for the workers who will remain after others have been retrenched because they have to get over their anger at not being informed of their relocations to other nations earlier, and they also have to deal with the fear of being summarily dismissed just as their unfortunate counterparts at Didcot. An authority on personal change, John Fisher, came up with the ‘Personal Transition Curve’ to show how people handle personal change (Fisher, 2003). Organisational managers can use this model to help their staff to execute personal change which will be crucial to the realisation of new organisational objectives. Its stages include: Anxiety: In this stage, the worker is made aware that he or she cannot fully understand the importance of all the changes that are necessary. The worker is unsure of how to effect changes that will be in line with the new work situation. How the worker deals with his or her bewilderment will determine how well he or she progresses through the rest of the curve. Happiness: In this stage, the worker experiences awareness that his or her point of view is acknowledged by the other workers. The excitement of being a part of the potential change is one cause of the happiness. However, workers should guard against attributing more to the coming changes than is logical. If this happens, they are likely to experience a feeling of mild disappointment when the change does not accomplish all that they expected it to. Fear: The workers are likely to experience fear about how they will perform in the new system and how their skills will be perceived by others. They may also wonder if they will be able to fit in or accomplish the new tasks even though they claim that they will. Threat: The workers are likely to feel threatened by the new system, particularly those who were instrumental in creating the old systems. Such workers can even take part in acts of sabotage to stop the new system from becoming a reality. The threat of the new corporate changes in the D2 Company is very real for the workers; particularly after they see their co-workers from the Didcot plant being relieved of their jobs. They might wonder if they are next in line to be fired if they do not show signs of understanding the new system. Depression: In this stage, the employee experiences confusion about what is really happening and whether it is beneficial for him or her and a lack of motivation. Most of the workers will feel uncertain about where they fit in this new model of organisation and if they will be able to remain there in future. Gradual acceptance: In this stage, the employees start to get a sense of their new environment and of their place in the change. They start to get the sense that they were right in their estimations that change was necessary and begin to manage their control over the adjustments that are taking place. Moving forward: In this stage, workers start to feel comfortable with their new responsibilities experiment more effectively with various functions in the environment Disillusionment: In this stage, the employee is disillusioned because he or she understands that the former practices are not compatible with the new system of organisation. At this stage, most employees just carry on operations without much motivation. Hostility: The employee in this stage experiences problems in embracing the new changes and is incredibly frustrated because the old way of doing things does not work. The employee is caught between being unable to embrace the new way of doing things, and constantly experiencing failure when she or he tries to use the old method to accomplish new duties. Denial: The employee refuses to accept that any change is necessary for life to continue as normal by constantly trying to use old methods to fulfil new duties in spite of failure. In this way, the worker removes the existence of the problem from his or her consciousness. Anger: In this stage, for those employees who have change forced on them, as is the case with the D2 Company employees, the anger will be directed towards the management; and may come in the form of strikes, lawsuits, or other social disturbances. In other cases where the employees were well informed of the coming changes, the anger may be directed at the self for not registering complaints or changing the move towards change when it was possible to do so. Complacency: At this stage, the worker has survived the organisational change, rationalised its occurrence, and adapted to the new reality. The employee moves to a new comfort zone with a feeling of great satisfaction and sense of indestructibility because of having survived what at first appeared to be a serious threat (Fisher, 2003). It is obvious from this transition curve that it is vital for employees in companies that are going through organisational change to be able to comprehend the fact that if they wish to be a genuine part of the change, they will have to alter the way they themselves think. Organisational change always has implications for a workers’ self perception. Even small changes can affect an employee be causing a divergence between the existing ideals of the worker and the projected ones which are expected to come with the organisational changes. Discussion The D2 Company has a mechanistic organisational structure that is based on theory X assumptions. When an organisation’s surrounding environment surrounding is stable, its higher ranking executives are likely to depend on a mechanistic structure to that can predict the behaviours of employees. In a mechanistic structure like the D2 Company, there is centralised authority or a vertical hierarchy that allows the management to be able to control the behaviour of employees. With order and discipline being the two factors that are most stressed on, this organisational structure is the most efficient in a stable environment as organisational managers have the option of gaining inputs at reduced cost. This method gave the D2 Company control of its conversion processes and facilitated the resourceful production of car-parts while incurring the least expense. However, to remain competitive and make the necessary changes to its organisational structure, the D2 Company will have to adopt a more organic model. When its external environment is experiencing change, it is hard for a company such as the D2 to be able to get access to the necessary resources to create its products (Mason 2007). This means that the organisation’s managers have to be ready to cooperate with others and make swift decisions get the resources when they are availed, and be in a position to react swiftly to the unexpected. In an organic structure that is based on the theory Y assumptions, authority is not centralised. Instead, first-line and middle managers have the authority to make decisions affecting their departments. This empowers them to respond swiftly without having to look for authority from higher ranking executives when they are looking for resources that are in short supply. The authority to make decisions that will affect the organisation basically rests with the personnel and different organisational divisions are best positioned to solve the issues that are affecting them. It would be important for D2 managers to re-examine the distribution of authority in order to determine which model best suits the present requirements. It might also be important for the D2 Company to review its policies in order to find out if its managers are acting in a fair manner towards the employees and if its policies are ethical as regards its dealings with its workforce. References Amagoh, F. (2008) ‘Perspectives on organisational change: systems and complexity theories’, The Innovation Journal: The Public Sector Innovation Journal, vol. 13, no. 3. Cooperrider, D.L. & dan Whitney, D. (2001) A positive revolution in change: appreciative inquiry, on Robert T. Golembiewski (ed.), the handbook of organisational behaviour, second edition, Marcel Decker, New York. Ferlie, E. (2007) ‘Complex organisations and contemporary public sector organisations’, International Public Management Journal, vol. 10, no. 2, pp. 153-165.  Fisher, J. (2003) The process of personal transition, viewed 10 May 2013 from . Magruder, W.J. & Mohr, B.J. (2011) Appreciative inquiry: change at the speed of imagination, Jossey-Bass/Pfeiffer, New York. Mason, R. (2007) ‘The external environment’s effect on management and strategy: a complexity theory approach’, Management Decision, vol. 45, no. 1, pp. 10-28. McKendrick, D. & Wade, J. (2010) ‘Frequent incremental change, organisational size, and mortality in high-technology competition’, Ind. Corp Change, vol. 19, pp. 613-639. Paraskevas, A. (2006) ‘Crisis management or crisis response system? a complexity science approach to organisational crisis’, Management Decision, vol. 44, no. 7, pp. 892-907 Pavlínek, P. (2008) A successful transformation?: restructuring of the Czech automobile industry, Physica, Heidelberg. Sherif, K. (2006) ‘An adaptive strategy for managing knowledge in organisations’, Journal of Knowledge Management, vol. 10, no. 4, pp. 72-80. Read More