Organizational Change in the Lake Side Hotel - Case Study Example

Organizational change in The Lake Side Hotel Introduction A change can be conceived as a modification of factors that determine the stability of a system or an organization. Change has become a constant of organizational life today (Dunne 1996). Pardo Del Val sees organizational change as an empirical observation of the state, shape and quality of an organization “after the deliberate introduction of new ways of thinking, acting and operating” (Pardo Del Val 2003, p. 148). Andriopoulous and Dawson (2008) see organizational change simply as “new ways of organizing and working” (p. 14). Adaptation to the environment and improvement in performance, geared towards gaining a competitive advantage, are the major reasons that necessitate organizational change. Businesses ensure continuity through change and pertinent to transformational change, which gives an organization a competitive advantage, is the knowledge of how to manage change successfully. “Business success also rests on making the right changes, on choosing the right ideas and implementing innovations that will make a difference (Andriopoulous and Dawson 2008, p. 4). This change management report will investigate whether The Lake Side Hall Hotel needs to implement an organizational change. This will be done through a force field analysis that identifies the forces that work for and against change and reveals ways to move the equilibrium to facilitate change. Lacey (1995) says that, to get credible and actionable information during the change process, it is important to carry out a diagnosis using an appropriate model that considers the internal external and strategic implications of the proposed change. The McKinsey’s seven ‘S’ diagnostic model will be employed. The report will offer thorough recommendations on the changes that are required to improve the business through suggestions on particular types of changes that will enable the management at The Lake Side Hotel to plan, monitor and implement the proposed organisational change. Force Field Analysis Force field analysis is a theory attributed to Lewin (1951). Basically, it explains how people resist change. Lewin observed that virtually all social systems endeavour to maintain stability. He correctly asserted that change in any system is confronted by equal and opposite forces which work for and against the change (Dunne, 1996). Schwering (2003) defines a force as any influence that acts in an organization to change the state of affairs in that organization. Hence, organizations should carry out force field analysis to determine the forces that are for and against that change in order to decide whether a change is necessary, the kind of change to implement and how to implement it. There are several forces that work for and against change at the The Lake Side Hall Hotel. A critical analysis revealed a number of forces that are for the change. Firstly, dissatisfaction; the assessors found out that the hotel staff failed two performance measurement and continuous improvement standards. The customers are dissatisfied over the morality of the hotel environment. In fact complains have been levelled after pornographic magazines have been found in the rooms. The customers do not only question the morality of Lake Side Hall, but they also are dissatisfied on the level of cleanliness observed. Food quality is another cause of dissatisfaction for the customers. The customers are not the only people who are dissatisfied with the status quo in the hotel. Secondly, decline in standards; it is apparent that standards have declined in several areas including food quality, restaurant service standards and employee competence. The hotel has also failed to maintain the ambience of its class with cleanliness issues and ‘un-imaginative set of activities classes’. The third force for change is technology. With increasing competition and globalization, organizations today exist in dynamic economical and financial times. Organizations should keep at par with the technological innovations that could affect its operations. In the current situation, as much as internet has great potential for improved business, the sales manager does not realize and exploit that possibility. His lack of proper understanding of the electronic media points to lack of staff improvement and training. The potential of marketing through the use of electronic media is a strong force for the change required. Fourthly, there is a need for improved staff training and development. As earlier observed, The Investors in People National Quality Standard found the organization lacking in terms of performance measurement and continuous improvement. The remote employees in the marketing department also need to be performance-focused and get more development opportunities. Lack of continuous training and development in technological changes could be linked with the sales manager not having electronic media know how. The last force for change is the need for leadership re-structuring and change (especially in leadership styles). Although the current structure has a good reporting system, whereby six department heads oversee the activities in their departments and report to a duty manager, the duty managers only oversee the day-to-say operational management of the hotel. This implies that there is no one responsible for strategizing company goals neither is there a person responsible for monitoring the performance of all the departments. There lacks vision on where the organization is going or the kind of goals (both short-term and long-term) to be achieved. A leader is supposed to identify opportunities for growth and developments by keeping abreast with technological advances that are advantageous to the organization. However, the hotel sales manager doesn’t seem to appreciate or appropriate this fact. On the other hand, there are factors against an intention for change. Firstly resistance to change; Stephanie (2004) says that “Organizational change is disruptive; it takes people out of their comfort zones, away from what they are familiar with, and into uncharted territories” (p.15). Even in situations where change is necessary, change creates ambiguity and uncertainty among the employees in an organization. When employees have been used to a certain kind of leadership style a change may disrupt them thereby losing their co-operation and support. Secondly, the cost of staff training, hiring more managers and maintaining the heightened standards of operation may be high especially in the initial stages. Thirdly, there could be staff fear of new technology. The hotel sales manager may not appreciate a system using electronic media for sales and marketing. Fourthly, the implementation of this change needs time. This is because the greatest change needed is in staff performance and improvement of the quality of services provided. There could be trouble insisting in staff conforming. Finally, change of leadership style; transforming and changing people’s attitudes may be difficult. Transformational leadership is not easily effected and it needs a patient leader who is willing to invest in people and transform them in a bid to achieve the organizational goals. Below is a diagram representation of the two opposing forces on the change. To effect change, it is more effective to reduce the forces that restrain change rather than to increase the forces that drive change (Dunne 1996). The best action is to leverage the forces that help change while mitigating the forces that hinder change. The situation as it is calls for change since the forces for change are stronger than those opposing the change. To move the equilibrium to mitigate the factors that are against the change, it is important to first address the fears of the staff. The sales manager may not appreciate the technology change since he is not conversant with electronic media. But training on the importance of electronic media in marketing and in turn the reality of the proposed improvement in marketing would make him support that change. With good communication and involvement of the staff in the change planning process, the fears of disruption or changes would be addressed. The cost of the strategic change may only be high in the initial stages but the results from the change results in increased business which translated into increased returns. Preparing the staff for change and clear communication of the need for change as well as the goals to be achieved would motivate the employee allegiance to the change. Diagnostic Model Force field analysis as Schwering (2003) notes may be influenced by heuristic errors and cognitive bias. Therefore it is important to deploy other diagnostic models in the change planning process. He advises change planners to select a diagnostic model that elucidate the issues germane to the change they want to realize. Such a diagnostic model is the McKinsey seven ‘S’ model described by Waterman et al (1980). This model is very useful where innovation and strategic change are involved (Pascale, 1990). The model consists of seven issue clusters that influence organizational change. The clusters include; structure, skills, systems, strategy, style (leadership) staff, and shared values (and motivation). Schwering (2003) considered a combination of the model with force field analysis to prompt thinking about how the forces impact organizational change. This method was chosen because it is not only simple but it also addressed all the areas the force field analysis identified as requiring change of some kind. Asking questions in each of the seven ‘S’ clusters would advise the change manager on the practicability of a desired course of action. The seven clusters are interrelated a change in one area affects all the other areas. Strategy is a category of factors that alludes to how resources are allocated to reach the set goals. One looks broad organizational goal, how clear the goals are to the employees and how change would affect key stakeholders (Schwering 2003). In the Lake Side Hotel, one of the organizational goals has been to maintain high quality service to ensure that guests come back time and again. However, with the decline in performance and quality standards, there seem to be a lack of clarity of the goals. Failure to establish goals and keep everyone focused on achieving them has resulted in gradual deterioration of the commitment to organizational standards. Hand in hand with that, it has been observed that the sales department needs to keep the ‘remote’ employees focused on performance and provide them with realistic goals. The proposed strategic change would impact the whole organization since with the formation of realistic visionary goals, geared towards giving the hotel a competitive advantage, would increase performance in all areas. Formation of the strategy would the key to bring a revolution to the hotel. Style relates in key leaders and managers act in not only setting but also achieving the organizational goals. The leadership style a leader adopts determines whether or not the organization meets its goals or not. Decision-making, communication style, preferences and the social needs are some key elements to consider in this cluster of factors. The most apparent leadership style issue is that of the sales manager who has served the hotel for the last 40 years. Line in line with that, as earlier noted, the two managers are tasked with the day-to-day running of the activities of the hotel. This is a kind of ensuring that the daily activities are performed. But more results would be achieved if leadership would propel employees towards a change of attitudes in order to achieve the set goals. Staff is another category in the model. It is closely linked with the skills cluster of factors. These two clusters look into whether the organization has the right people for the change. This looks at their capabilities (training and competence), their motivation and commitment to the change process. Andriopoulous and Dawson (2008) point out that to implement change, it is important to get the staff into creative sessions where they highlight ideas that would benefit the change process. The staff members are directly in touch with the clients and their behavior and competence will affect the relationship of the organization with its customers. Management training, an area already identifies as a potential area for improvement would give support to a strategic change. Shared values are a cluster of factors that asks questions such as what are the guiding concepts the hotel instills in its members? What are some cultural elements and values would support or not support the change? Training is important to the hotel and all members go through NVQ in their areas of specifications. The hotel employees also share the culture of dedicated focus on customer service and exceeding the expectations of the guests. These values coupled with clear strategic goals for each department would greatly support change. Structure, another ‘S’ cluster of factors is closely linked with systems. While structure looks at how the organizational structure might affect the proposed change, the systems cluster looks at the daily procedures and activities the people in the organization are involved in. The duty managers who are responsible for all the seven department heads need someone to report to who will be in charge of monitoring the implementation of the change as well as ensuring that the daily activities contribute to the achieving of the organizational goals. Actions Andriopoulous and Dawson say that “Making the right decisions on the change also rests on evaluating the current situation and generation and identifying new ideas on the speed, direction and choices for change (2008, p. 7). One of the complaints facing the hotel management is having un-imaginative set of activities classes. This can be dealt with through creativity, an activity described by Andriopoulous and Dawson (2008) as a thinking process where employees are brought together to generate new ideas. The change process does not stop at generating ideas, but the ideas are converted into innovations. A set of actions will help the organization take on the change process. 1. Convene a task-force responsible for planning. This group will be responsible for defining the problem more accurately, identifying the goals and generating creative ideas (Paton and McCalman 2008). It will also be responsible for suggesting the innovation for the ideas. The group should include the managers, department heads and a fair representation from each department. This group will come up with a time bound strategy for the hotel. 2. Appointing of the change agent. He will be responsible for overseeing the implementation of the change. 3. Change of the leadership style to a more strategic and transformational style which will include dropping the sales manager who has served for forty years. Although he has a commitment to the organization, he may not be able to appreciate a more dynamic approach to sales and marketing 4. Changing the hotel ambience and classes of activities. This should be replaced with a more attractive and competitive package. 5. A training program for all staff with an emphasis to staff development. 6. Form a complaint response group responsible for addressing customer’s queries and dissatisfactions. 7. Adoption of new technological developments that will drive the strategic plan and contribute to attaining the identified goals. Types of Changes Organizational change can be classified into two general categories; first order and second order changes. The first order changes are evolutionary and incremental in nature. They only alter certain small aspects of organizational operation with an aim to improve the current situation but maintain the general working framework (Pardo Del Val 2003). On the other hand, the second order changes are transformational, revolutionary and strategic. They encompass change in a radical nature whereby the essential framework in an organization is totally changed. Dunne (1996) advices that, “without proper understanding of the type of change that is being planned, poor diagnosis and inadequate formulation and implementation result” (p. 5). Organizational change that follows Lewin’s model goes through three stages; “unfreezing the patterns of attitudes, feelings and behaviour, introducing the change and refreezing attitudes around the change to ensure take up and stabilization of the change” Dunne 1996, p. 6). The Lake Side Hall Hotel needs the second order change. Importantly, the change leader should pay special attention at how he communicates the need for the change to the involved parties. In addition, how he will involve them in the change process. Those involved should also be aware of the benefits the proposed change offers them. The change cannot be successive if the manager does not have the employees’ commitment to the change. This calls for an attitude change on the part of the employees and that translates to a transformational style of leadership on the part of the manager. Planned change is another type of change. It is defined as those initiatives that are driven from the top of the organization, that is, the management, moving down (Bamford and Forrester, 2003). The purpose of committing to a planned change is to increase the effectiveness of an organization. It is important that when the management decide on a planned change, they need to define the objectives of the change and then they come up with a step by step approach to attain the objectives. There are several models involved in coming up and implementing a planned change process. They include the Lewin’s change model, the action research model, and contemporary action research model. Structural change is a type of change that involves re-designing the structure of the company. It is mostly influenced by external environment. This kind of change involves a modification of the hierarchy of authority. In the Lake Side Hotel’s case, hierarchy to authority is well organised but the operational managers are heavily tasked and may not be very productive. Structural change also involves re-structuring organizational goals. The change process in the hotel will involve this kind of change. Structural change will involve re-structuring the ambience, the class of activities and other structures in order to respond to customer needs more effectively. Human change, another kind of change, involves altering the skills, performance, behaviours and attitude of the employees within the organization. In the Lake Side Hotel, this kind of change will involve the training and development of employees, motivating them towards better performance and attaining organizational goals as well as leading them through the process. This kind of change is as important as the Technological change. As Anjani and Dhanapal (2011) observe, technological change cannot be overlooked. They say that technological innovation is a strong force that demands change in organizations and those who ignore it fall behind. This change involves implementation of new technology, ensuring that the staff members acquire new skills in use of technology as well as upgrading technology periodically. Strategic change: With increasing competition and globalization, corporations today exist in dynamic economical and financial times. This may lead an organization to change its structure or even its strategy in order to heighten and maintain its competitiveness and survival in the long run. Transformational change is central to strategic change. Transformational leadership does not come in the comfort zones. It calls for the courage to look and act beyond the ordinary and the obvious. Bierly et al (2000) affirms that, “Success does not necessarily go to the firms that can make the best use of what they know, but to firms that can make the best use of what they know and know what is strategically most important to the firm and to the society at large” (p. 596). Real transformation and change calls for strategic leaders to focus beyond accruing short-term financial gain for the shareholders and take the challenge of propelling the organization in exploiting its potential to a ‘deeper meaning’. Transformational change, takes technological change as an aspect that requires a combination of technical and human relations aspects. The leader takes on “the role in translating top management’s vision through exercising skills of path finding (give direction), problem solving, and implementing to introduce technological change” Appelbaum 1998, p. 295). The Lake Side Hotel needs this kind of bold change that will encompass all areas of operation. Conclusion Change is not easy to humans especially if it is a strategic and planned change. The success of a planned change is determined by how well it is planned and how well it implemented. Since a planned change flows from management to employees, the proportion to which a change leader gets the employees to agree with the management is the extent to which the change will receive support. This requires a force field analysis combined with other diagnostic models to ensure that thorough analysis of the current status as well as the idea or desired outcome. The major factor in dealing with resistance is proper communication. There should be clear articulation of the reasons for change, the targeted outcomes of the change and free flow of information in the change process. Carrying out a diagnosis prior to action cannot be overemphasized as the success of the change relies heavily on it. Taking bold action to actualise the plan translates intention to reality. Formation of a strategic plan and sticking to it throughout the change process helps the people to remain focused on the change. The change process is as important as the change itself. 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