Management of Change - Theories of Organizational Structure and Theories of Organizational Culture - Coursework Example

Management of Change Contents Contents 2 Introduction 4 Discussion 5 Theories of Organizational Structure and theories of Organizational Culture 5 Scientific Theory 5 Administrative Theory 6 Bureaucracy Model 6 Systems Theory 7 The culture of nations 7 Culture of organisation 7 Models to analyse the organization structure and culture 8 Application of change theories for the organization 9 Kurt Lewin theory of change 9 Kotter’s eight stage process of change 11 The McKinsey 7S Framework 12 Critically analyse the effect on the change process 13 The rationale for the change 13 The impact upon organisational structure and culture 14 Relevance of the implementation strategy 15 Roles of key agents in achieving sustainable change 18 Practical recommendations to improve the success of future change initiatives 19 Conclusion 20 References 21 Introduction Change within a business is an important part of the growth of an organization. Organizational changes are varied in nature and can have multiple occurrences in the life time of an organization from the point of inception of the business to the maturity and stagnation stage of the business. The organizations across the globe are facing the urgent need to reshape and develop the organizational, structures, processes, culture, and management and take up new technologies and systems that are evolving with the factor of globalization. The rapidly evolving technologies, changing business processes, environmental resources, cultural diversity and the global economic evolution are driving the need for implementing organizational changes in various businesses. Mergers and acquisitions, devising new corporate strategies, changing the organizational, structure, expanding the business regional as well as internationally are business strategies which involve a high degree of change. Change management is the most critical part of the implementation process of any strategy that ultimately leads to major changes within the organization. Without effective change management, the organization may crumble under the pressure of sustaining the changes and incorporating the changes in the basis levels of the business. The ability of a business to identify the necessary changes and implement these changes in a sustainable long term way are important ways of responding to the internal and external evolution process of an organization. The internal changes made within a business include the changes in organizational processes, people requirements and organizational structure whereas the external changes include competition movements, demands of the market and government legislations. The business expansion process of a business involves both internal and external changes. Therefore, it is critical to support and manage the changes associated with the business expansion process of any business. The organization under study is training and development business set up in the Middle East. The culture of the organization is therefore based on the Arab culture. The organization is focused on delivering military curriculum to be followed in different training centres established in several regions of United Arab Emirates (UAE). Like other businesses, the training and development business also is trying to evolve with the rapidly changing global business world. As such the requirement for expanding the business was identified and the business planned to expand by opening up its operations in several other regions in the UAE. The business expansion is a major form of organizational change. The change management followed by the organization with the reference to a number of organization theories and change management models are explained along with suitable recommendations provided in the write up. Discussion Theories of Organizational Structure and theories of Organizational Culture Theories of organisational structures are important for success of an organisation. These theories describe how efficiently an organisation allocates is resources. It basically deals with the organisational interaction with the environment. Scientific Theory This theory was propounded by Frederick W. Taylor. It is based on the idea that it is possible to improve efficiency on an organisation through scientific analysis and experiments. Through the above means the efficiency of the procedures were enhanced. According to Taylor, it was possible to design processes which would result in delivering maximum output with minimum input of resources and energy. Hence structure was adapted to focus on work processes. This theory was adopted nu large mass producing industrial companies during industrial revolution (Aquinas, 2009, p. 94). Administrative Theory This theory was developed by Henri Fayol which looks after the administrative processes instead of technical process like scientific theory of Taylor. According to this theory, focus was put on administrative processes instead of technical processes. Here administrative principles in the form of pyramid structure formed the basis of organisational activities similar to top down approach. He claimed that the activities of industrial undertakings can be divided into six groups namely, commercial activities, technical activities, financial activities, securities, managerial and accounting activities. According to him these six groups of activities are essential and are always present. Bureaucracy Model According to Max Weber, bureaucracy is fundamental as it represents a basic pattern which exists in many variants. According to him the understanding of an organisations and their structure is found in historical context and he developed a normative ideal for bureaucracy. He stated that a public employee must act in such a way that his seniors’ interest is his own interest and thus he must stay in his bureaucratically assigned role. He believed that bureaucracy must consist of neutral employees so that organisational hierarchy can function effectively and smoothly as possible. According to him, bureaucracy must have established distribution of work among the members of an organisation. There should be an administrative hierarchy and a rule oriented system which describes the performance of work. Further there should be separation of personal rights and possessions for the office. Again the selection is staff should be made according to technical qualifications which they possess. Systems Theory This deals with the interrelatedness of all parts of an organisation. It basically indicates that any change in one part of the organisation will affect other parts. Systems will not always interact in a lineal manner and thus small changes in one part will result in significant changes in other areas. Thus organisations acts as system interacting with their environment and the equilibrium of the organisation is changing constantly as organisation adapts to the changing environment. Organisational culture acts as inherent law within the organisation which all of the employees follow. There are many organisational culture theories. The culture of nations This was propounded by Greet Hofstede. According to him national culture is revealed in different ways. He describes these as heroes, symbols, values and rituals. Symbols are gestures, words, objects and pictures which are easily visible to the people outside the cultures. Heroes are individuals who are living or dead or imaginary and serve as models of behaviour. Rituals can be regarded as collective activities which are technically surplus in reaching required ends but are measured as socially indispensable within a culture. Values are the core of national culture and indicate the broad tendencies for preference of certain states of affairs over others. Culture of organisation The culture of organisation consists of heroes, symbols and rituals which are externally visible. The main characteristics of organisational culture are holistic i.e. the whole is more than sum of the parts. It is decided by a group’s history. It is related to anthropology with respect to symbols and rituals. It is socially constructed by groups of people who work together for an organisation. It is largely soft in nature consisting of behaviours rather than tangible goods (Baligh, 2006, p. 50). Models to analyse the organization structure and culture The organisational structure is hierarchical in nature. The company is based in Middle East with an Arab culture. In the organisation, there is formal system of communication between the top management and lower level employees. The orders given by the senior team must be followed accordingly. In the organisation there is a concept of work specialization which indicates division of labour or the degree to which specific tasks are broken down for each of the employees. In the organisation work specialization is extensive as here the managers assign single tasks to an individual as part of larger work. In the organisation there is a concept of departmentalization where the organisation groups different segments or jobs of the company together. Since the company has hierarchical organisational structure there are many levels of authority and it takes time for implementation of any work. The top management retains the maximum authority and hence the staffs follow the orders. There is complete centralization of power and authority. Because of this the organisation will respond slowly to the changes of needs of the customer and organisation in which it operates. Again the communication across many departments of the organisation is poor especially in case of horizontal communication. Again the decisions of the departments will benefit the company will rather than organisation as a whole in case of Inter-department rivalry. The culture type of the organisation is control type. The organisation is characterized by control, stability within the organisation. This is clear because the leaders are not ready to change and hence they focus on integration. The management of the company values control, standardization and a well-defined structure for decision making and authority. In the organisation, leaders who can manage, organized, coordinate and monitor people and processes are termed as effective leaders. It is clear from the above discussion that the organisational structure and culture prevents any change within the company. In case of expansion, many features of the organisation will change like the Staff, skills sets, systems etc. In a bureaucratic organisation, those in powers will not let go of its power so easily and hence they will oppose to such change structure. They will not be comfortable with sharing the same platform with their subordinates. In case of any change process to be successful, the senior management of the organisation must first be ready to accept the change. Here the senior management are not prone to change. Application of change theories for the organization There are three theories of change management. Kurt Lewin theory of change (Source: Cummings, T. Worley, C. 2014, p. 22) It is a three stage model of change. The first stage is unfreezing where the employees needs to be motivated to implement the change. Change in such cases requires adding new force or removing the existing ones which are at play in perpetuating the behaviour. Here the organisation is concerned with training and development of world class military curriculum to students across UAE. The staffs need to be made aware of the key advantages of bringing about the change. The employees should be made aware of advantages of flat organisational structure like fast communication among the peers, decentralized decision making system which will result in low cost of change implementation. The employees will be given adequate freedom to exercise their innovation. The organisation should try to remove all the anxiety of defensiveness and resistance in this regard. The employees should be made aware of increased profitability that the organisation can earn due to change. The second step is implementing the change process. During this process the employees should be kept sufficiently motivated so that they don’t return back to old state. The organisation should try to remove any queries and dissatisfaction which might exist among the employees. The organisation should present a role model in front of them to aid in the change process. The Third step is making the change permanent. Here the organisation will make the employees accustomed to the new state so that they become habitual in it. Kotter’s eight stage process of change (Source: Kotter, 1996, p. 76) The first stage is creating a sense of urgency. The leaders of UAE Company must make the employees understand that they are losing field to their competitors and that the organisation must expand their business to achieve sustainability. The second stage is creating a guiding coalition. Here the UAE organisation will put together a change team who will lead the change. The third step is developing a strategy and vision. The UAE organisation will create a vision and develop strategies to achieve the change like recruiting more staffs, hiring a change agent. The fourth step is communicating the change vision. Here the UAE organisation will use every vehicle to communicate new strategies and vision to the employees to motivate them. The fifth step is empowering broad based action. Here the UAE organisation will get rid of obstacles like rigidity of the organisational structure and resistance of the leaders to implement change. Next the UAE organisation will reward employees who help implement change. The company will then consolidate gains and produce more change which is helpful to the organisation The McKinsey 7S Framework (Source: Plant, 2000, p. 53) These models indicate that there are seven S’s which an organisation needs to consider implementing the change. The structure of the UAE Company is hierarchical and thus it needs to be changed to a flat organisational structure. The employees need to train more number of students after expansion by improving their skill level. The UAE Company adopted authoritative style of leadership which will be changed to democratic where all the employees will be given the opportunity to contribute to organisational effectiveness. The Staff of the UAE Company will increase after expansion. The Skill set of the staff will improve as they need to train large number of students and teach new courses to them. The shared value of the company is to be the foremost organisation in their field of work. The main strategy the UAE Company will adopt is to expand its operation and deliver high quality education to achieve sustainability. Critically analyse the effect on the change process The rationale for the change The business expansion of the training and development centre is an important corporate strategy devised to increase the markets share, the profitability and sustainability of the business. The training centre focused on expanding the business in different regions of UAE. UAE is a rapidly evolving economy that provides high opportunities for growth and profitability for a business. The absence of taxes like corporate tax and income tax, cent per cent repatriation of profits and capital and the non-existence of controls on foreign exchange makes the UAE one of the most promising and high potential market in the globe. Since, the training and development business already had an expertise in running a business in a part of the UAE; it was a perfectly rational decision for them to move into other regions of UAE where the business experience could be properly used. The rules and regulations in the main areas of the UAE including Dubai, Sharjah, Ajman, Umm al-Quwain, Ras al-Khaimah, Ras al-Khaimah, Fujairah are almost similar. Also, these areas have the benefits of high foreign investments and no taxation rules which make these locations perfect for expanding the training and development business. The establishment of the training centres in new regions of the UAE also provided the business with new opportunities to increase their customer base, revenues and market share by capitalizing on their business experiences and skillsets. The expansion process was started with the objective to increase the market share and profitability of the business as well as to have increased competitiveness and sustainability for the business in future. The impact upon organisational structure and culture Though the company benefitted from this change in the long term but it faced a number of challenges in the implementation stage of the change. This was due to a number of factors including the senior managers being resistance to the changes and being comfortable in a dominant and guarded hierarchical organizational structure followed in the business. The management of the changes that occurred with the expansion of the business could not be done efficiently in the beginning due to the high resistance faced from the management and the lack of communication about the major changes with the staffs of the company. The hierarchical organizational structure of the training centre was changed by the expansion process. The business expansion created the need of dividing the responsibilities and controls of the business among the new training centres opened up in other regions of UAE. The strict organizational culture was to be replaced by a more flexible and adaptive culture. The lack of communication with the staffs regarding their new roles and changing responsibilities resulted in confusion and led to a fall in the Key Performance Indicators (KPIs) of the employees and subsequently generated a fall in the performance level of the business. The culture factor in UAE is a significant aspect to condition the minds of the employees and also the customers towards accepting the changes in the existing business. The expansion process of the training centre in the UAE instigated the development of many cultural issues regarding the changes taking place within the organizational processes and practices. The management of culture and the incorporation of flexibility in the organizational beliefs played important roles in making the training centre turnaround from the initial drop in performance experienced after then expansion process. Though the company faced several obstacles in the beginning phase, yet it overcame these challenges by properly managing these changes through effective communication and participation of all levels of employees. Relevance of the implementation strategy The implementation of the business expansion as a process of change was not effectively managed from day one. This created much chaos and hurdles in the business expansion process thereby exposing the expansion process to a threat of failure. The implementation method should ideally be supported by the application of relevant change management models which would ensure a company to integrate the various processes and manage the changes associated with people and processes within the organization. The Kurt Lewin’s Change Management Model is a popular model for managing the risks associated with changes in a business by the understanding of the response of people in the business towards the change. The three stages related to change include the unfreeze stage, transition stage and the refreeze stage. Since the management of the training centre mainly composed of Arab nationals who were much resistant to new methods and structures being implemented in the organization, therefore, it was critical to introduce a period of unfreezing in which the tendency to resist changes was to be overcame by motivational factors and the understanding of the long term objective sand vision of the business (Andrews and Thatcher, 2008, pp.47-48). The transition period in the expansion process involved the major hurdles in which effective leadership and guidance was provided by then managers to keep up the morale of the employees and boost them to improve their falling KPIs. The training centre experienced a transition period of three months in which several obstacles like confusion among the staffs, lack of client relationship, maintenance, fall in KPIs, understaffing and instability of the business were noted. The refreeze period was reached early due to the effective change management process. According to the Kurt Lewin change management model, the more effective a process of management in the organization is, the more quickly it will reach the refreeze stage. Therefore, the company became stable in the next few months and the professionalism of the staffs and management of the leaders made the organization capable of becoming profitable through the new expansions. The McKinsey 7S Model is another model that is of critical importance for implementing and managing changes in an organization. The 7S model was considered as a framework to implement the business expansion process and integrate the important parts of the organization to work collectively towards the achievement of objectives. The shared values of the business and the employees were focused on and considered in the setting up of new training centres. The strategies involved in the expansion process were decided after a proper evaluation of the short term and long term objectives of the business. The structure of the organization was modified from a hierarchical structure to a more flat structure to create equal levels of responsibility in the various departments of the business. The management style was made more flexible and less controlling to encourage and motivate the staff. The skills of the people were developed through proper training and communication related to the new expectations from their roles and responsibilities. The McKinsey model combined both the emotional factors and the rational factors for consideration in change management which helped the company to mitigate the risks associated with the expansion process. The Kotter’s 8 Steps Change model could be considered as the most appropriate model that should have been used to implement the changes in the expansion process and ensure proper change management (Wood, Zeffane, Fromholtz, Wiesner, Creed, Schermerhorn, Hunt and Osborn, 2010, pp.90-92). The main challenges faced by the training business in establishing successful expansions were the resistance form the people and the lack of transparency within the organization. In this respect, the Kotter’s model would have been most effective in convincing the management as well as the employees regarding the need for the expansion process in the business. Kotter’s 8 Steps Change Model (Source: Tushman, Anderson and O’Reilly, 1997, p.45) The eight steps involved in the Kotter’s Change Model are: creating an urgency for change, developing a team working towards the change, creating and communicating the need and objectives of change, empowering the employees with the ability to participate in the process, devise short term objectives, maintain persistency in implementing the steps involved in the change and lastly monitor and measure the changes to make them permanent and have long term benefits from these changes. The use of this model would have ensured the organization was prepared beforehand for the change and therefore the transition phase would have experienced lesser constraints and challenges. Roles of key agents in achieving sustainable change The key agents involved in influencing the business expansion or any other process involving change are the people, management and the teams which take the responsibility of supporting and influencing the existing behaviours, trends and practices in the organization with an objective to effectively manage the process, risks and benefits associated with the implementation of the change process. The leaders in the organization and the senior management are the key agents driving the change process within the business. The roles of the leaders are significant in managing and controlling the perceived risks and deciding the future course of the change (Carless, 2005, pp.411-429). A dedicated team should be formed to support change management with respect to the structural and cultural conflicts and the risks arising out of the expansion process. The training centre in UAE improved the selection and recruitment processes with an aim to remove the problem of understaffing faced after the expansion. The training centre also established sessions to communicate the changes and the expectations from the employees to them so that they had a better understanding of their changing job responsibilities. The basic understanding and acceptance of the employees for the change and the support of the senior management in the change process are critical for the success of the process in future. Communication in Change Management (Source: Oakland and Tanner, 2007, p.10) Practical recommendations to improve the success of future change initiatives The success of any change initiative depends largely on the acceptance of the employees and the streamlining of the business processes and changes with the objectives of the organization. Managing the culture and cross cultural values within the training centre in the UAE would be critical with respect to the expansion of the business in other regions of UAE. The training centre should focus on preparing the organization and the employees before the actual implementation of the change process so that the people and processes of the business scan are managed effectively during the execution of the change. The training organization should also focus on maintaining uniform values and beliefs in all its regional training centres. This will help to motivate the employees as well as facilitate a clear level of communication among various regional offices and departments of the business. The employees in the regional offices should be empowered to some extent to encourage and motivate them in supporting the expansion process. The implementation of relevant change management models should be done in the business to ensure the sustainability of any change process initiated in the training organization. Understanding and adhering to the cultural values and beliefs of the employees is critical, especially in a stringent country like the UAE where the cultural aspects play a major role in shaping the future of a business. Also, since military training centre has to deal with a trainees from different cultures and backgrounds it would also be important to maintain effective customer relationship management processes while implementing the expansion process or any other process involving the internal changes within the business. The training centre should keep on motivating the staff of the business by introducing lucrative performance rewards and appraisal systems and by providing different benefits to the employees in the training centres established in different regions of the UAE. Conclusion Business expansion can be considered a milestone setting activity for increasing the scale and operations of a business. But the challenges and obstacles associated with the implementation of a business expansion process should be carefully considered so that the process does not backfire by decreasing the performance of the business. The training and development organization should have evaluated the perceived risks associated with the regional expansion to remove the problems faced by the business in the initial stages of the implementation of the business plan. The reduction of the KPIs of the staffs, the understaffing problems and the lack of communication were the initial problems emerging from the expansion process. This was mainly caused due to the lack of understanding of the management regarding the importance of change management in the business. The change management process should ideally have involved the preparation of the business and the people assets before the starting of the expansion phase. This would have helped to build up the confidence of the employees as well as adopt the business processes, organizational structure and culture to sustain the expansion activities. Thus, the cultural aspects, the structure and flexibility of the organization and risk management are the most critical components that ensure the success of the expansion process. References Andrews, J. & Thatcher, H. 2008. All change? Managers’ experience of organizational change in theory and practice. Journal of Organizational Change Management. Vol. 21(3), pp.47-48. Aquinas, P.G. 2009. Organization Structure & Design : Applications And Challenges. New Delhi: Excel Books India Baligh. H.H. 2006. Organization Structures: Theory and Design, Analysis and Prescription. Stanford: Springer Carless, S. A. 2005. 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