Organizational Development and Change, Ethical Business Leadership - Coursework Example

Organizational Development and Change Student’s Name Institutional Affiliation Section 1 Summary of the Case Context The establishment of Society A, a building society in New South Wales, took place in 1959. Its management team consists of the managing director and six general managers; hence, it is likely that the organization has a slightly flat structure. It was not until 1980s when the Federal Government deregulated the banking industries to allow building societies become banks and limit new entrance of foreign banks. By 1988, Society A had extended its operation to include credit and commercial facilities because it had become a bank, Bank A. Originally, the mission of the organization was to provide house and small person loans out of members’ deposit. Thus, some important characteristics of Society A development are the rise in the number of staffs and products’ diversification and acquisition. Considering, for example, in 1974 the number was 200 and exceeded 1200 by 1990. Prior to becoming a bank, the society value was $ 1 billion that doubled by 1990. It is worth mentioning that the society branches and the new products and services raised the overhead costs more than that of major competitors; thus, the firm requested management consultants to review its operations and recommend areas of reducing the operating expenses. As an assumed change agent, I base this project on the case “Integrative Case Study on Managerial Politics of Organizational Change.” Section 2 The Development/ Change Plan and Process i. Identification or Diagnosis of the Problem. In 1986, the enterprise management team sought assistant from management consultants, B Agencies, because its operating expenses were above those of the competing firms in the same industry. The experts reported that the firm could tap more than $ 1 million savings from head offices and branch networks. Unluckily, these consultants failed to specify those areas although they promised to work closely with the society in the identification. However, Society A did not accept the offer, and instead it decided to adopt the Total Quality Management (TQM) technique in an effort of minimizing its overhead costs. It is worth mentioning that the process of adopting the TQM technique did not involve the entire firm’s departments; thus, it was highly likely to have hazardous impacts on the individual departments. Here, the senior managers failed to share the firm’s vision with the individuals who are going to implement the policies as well as to whom the policies have more impacts. Specifically, the firm approached the issue of raising the savings by adopting the bottom-up strategy that proved to have little positive impacts because many departments resisted the change, did not really feel the impact of the new technique, the managers had not started the technique themselves and no one had sought their consent or contribution. Worsening the situation, the managers pointed out that their primary responsibility was to support and not to implement the system; thus, lack of follow-ups and consistency. Neither did the seniors endorse compulsory involvement in quality management team nor appreciate those involved in the system; thus, managers could not influence the actions of their workers. Another problem managers caused is lack of commitment that led to the loss of the strategic direction. For example, no one communicated the senior managers’ TQM message because everyone was busy in their departmental activities. In fact, the TQM method proved to be beneficial in a number of areas such as reducing the number of workers and overtime working hours that leads to greater serving. The bottom-up strategy having failed, the management decided to employ the top-down approach in 1991. This was in consultation with another management consultant, Agency B, who devoted themselves to helping the company realize its objectives of seeking cost effective or cost saving strategies. Importantly, the argument was that senior managers play a crucial role in quality performance; hence, their commitment and involvement would help motivate the middle-level managers who had proved to be resistant. Closely related with this, in 1991, the lending general manager amalgamated the housing and consumer loan sections to eradicate duplication of roles that created inefficiencies of management of clients’ accounts. Although the administration employed managers who have experience in both the sections, it failed to provide a platform where employees would develop to multi-skilled workers. In addition, the physical amalgamation took longer than usual time. Though it helped reduce the number of workers by eight, it did not provide the firm with sufficient resolution. The top-down approach was resulted-oriented rather than being means-oriented because it aimed at winning the confidence of the middle managers instead of focusing on how it achieves this. Unluckily, the management could not add value to its members because it rarely promoted those employees who had been in the firm for many years, which is why workers roughly resisted the newcomers’ control. Lastly but not least, communication was always an issue since no one asked for suggestions from individuals before redesigning the departmental operations. Instead, the seniors dictated how the workers should carry out things instead of guiding them. Clearly, the above incidences show that management cannot keep up the promoting forces nor monitor the resisting forces, which is the reason for the episodic change management. Secondly, the change only focuses on the financial aspects instead of including the technological, social, cultural, communicational and relational matters. Further, the team does not recognize the effects of its actions on means and staff morale. Of importance, there lacks research into mutual understanding that leads to the continued resistance. By induction and logical reasoning, the business struggle in this case is because of the unethical business leadership that has barred innovation. ii. The Approach to Change as an Agent/ Organizational Consultant Ethical Business Leadership Regardless of whether they recognize them, managers always face moral dilemmas in their day-to-day operations. The rising demand of businesses to build ethics into business strategic plans is not only the regulator requirement, but also the employee and the societal expectations. Importantly, the firm is confident of its employee performance if it embeds the management culture with ethics. Furthermore, the business ethics help managers in making informed decisions. In this theory, there are five pillars that can aid this business enterprise achieve its objectives both in the short term and in the long term. Firstly, the commitment component forms the basis of a manager who wishes to hold onto business ethics. In this pillar, the management team has the task of fully engaging in the firm activities to symbolize their sacrifice, courage, wholeheartedness and willingness to share their ethical position. In fact, commitment always starts within individual managers and then passes on to the existing employees. Thus, a committed manager is always aware of what is right, displays responsibility and accountability and possesses values of respect for one another, honesty, openness and integrity. Essentially, commitment calls for managers to make difficult choices while ensuring their companies are doing the right thing. Apparently, committed leaders inspire themselves as well as their employees. Secondly, the relevance pillar ensures that the business ethics are in line with its operations. The world including the major business stakeholders expect the firm to conduct itself responsibly without harming anyone. That is, the firm should positively contribute and not negatively. However, there exist many ways through which a business can pursue its ethical values; thus, the set of the choices is confusing. For instance, a firm may have to engage in corrupt acts so that it can win its sales or hide its identity for privacy reasons that can harm its reputation if exposed to the public. Hence, deciding what is relevant choice to a business is not a cost-benefit analysis, but a moral choice. The third pillar states that leadership should add positive value. Some corporations such as Exxon aggressively oppose any idea that is likely to threaten their huge profits. Sadly, such activities are devastating; thus, they do not add positive values to a particular firm. Unethical acts stem out of invested interests and are hazardous because they raise operational costs, lower productivity, taints a firm brand name, and lower customer loyalty and sales. One should note that ethics drive in behavior change, alter employee mindset and promote a healthy business culture. Relationally, ethics add positive value by permitting recruitment practices, performance appraisals, training and promotion. Fourthly, the influence pillar dictates that business leader actions should positively trigger employee emotions. An influential leader should not be myopic in meeting legal standards or profit maximization. Instead, he or she should yearn for values such as love, justice, kindness, self-control, courage, integrity and fairness. By being accountable and responsible, the leader sets an example that the employees emulate. The last pillar, the means and not just ends pillar, says that managers should complement their organizational goals with ways of achieving them. This pillar suggests that leaders should view their organization from the macro perspective that enable them go beyond the financial bottom line. Consider, for example, reducing operating expenses can be ethical, but it may be wrong if how management achieves it say, harming employees, is unethical. Evidently, the pillar obliges the manager to act without regard to his or her personal interests; thus, building a relational agency. Here, the pillar suggests ways such as corporate governance, protecting reputation and risk management. iii. The planned change process/ Ways A method, the gap analysis, shows that there exists a large difference between the desired result and the actual result. Regardless of the management effort to adopt the TQM technique, they always experience unfriendly welcome. That mismatch communicates that the corporation should induce a high level of urgency and capability to gain more savings. The firm should strive to use the double looping system so that it can review its governing principles, which necessitate the managers to be committed. In the TQM strategy, the managers become engaged through direct participation in the implementation of the system as well as supporting it. They enhance every department involvement to help communicate the vision of the firm. By digging more into the pre-existing stories of the banking industry, the committed manager helps himself or herself and his or her employees predict the likely outcome. It’s noteworthy that the management’s commitment helps seniors avoid relaxation and sometimes use the power of command so that the subordinates perform. While remaining committed, the managers lead in research work involving data collection, analysis, interpretation and system control. Relevance is vital in the success of the TQM in the operations of Bank A. Surprisingly, this system harm others as it leave them jobless while coercing some departments to work, which has led to the accumulation of work overload. Thus, the managers should view the TQM implementation both from the moral and financial perspectives. In relation with this, managers have a pool of choices from which they have to select the appropriate strategy that does not harm any sector; thus, the choice is more moral than monetary. As a responsible management team, it ensures that it adds positive value to help lower the operational costs, raise productivity, build a gradual culture of change and boost staff morale and mutual understanding. The managers proceed to identify the future of their organizations by regular identifying its weaknesses as well as establishing relation agency that alter the employee mindset and response to change. In the application of the fourth pillar, the management treats each employee fairly and equitably, which triggers positive response. Furthermore, the managers pay attention to reducing operational costs while maintaining human dignity and upholding virtues of justice and love. Lastly but importantly, the managers understand that the organization (Bank A), the groups (quality teams) and the individual (staff) have varying needs, but they have close interaction; thus, the management team opts to consider the organizational objectives as well as how it uses the individual and groups to achieve the desired goals. Here, the senior managers resist their personal interests, say, of pleasing or winning loyalty of middle managers while exploiting the low-level workers. iv. Handling communication and Readiness Communication in the banking industry is very vital because it determines the firm efficiency. As a committed team, the managers communicate the business needs in the entire organization and request a feedback so that they can determine if the communication was effective. Moreover, before employing a change, the managers make timely communication to the concerned parties so that the stakeholders are aware of the change in advance; thus, high likelihood of fitting into the new system. Significantly, the organization can organize training and awareness programs beforehand to reduce members’ worries and fears; hence, reduced resistance. Alternatively, the seniors equip themselves with relevant skills, delegate tasks and reward qualified workers to deliver the right message to the subordinates. v. Evaluation of Change Effort and Learning from the Unanticipated Outcomes The use of the theory of business ethics leadership to manage change is highly likely to produce optimal results in the daily operations of this firm because it assists in filling the gap stemming out of change averse. Indeed, it creates a positive attitude whereby everyone views change as part of the business development; thus, embraces it. The fact that managers become accountable and just leaders prepare workers to emulate them in an effort of achieving the organizational goals. In the above case of Bank A, business ethics aid in reducing the operating expenses, boost employee morale, enhances fairness; promote mutual understanding and create a healthy working environment. It also makes everyone understand that change is a gradual process, and there is a need to have a regular review of the system progress so that if one identifies a deviation; he can take the appropriate corrective measure. Therefore, the change efforts lead to reduced resistance and increased savings. In the case of unanticipated outcomes, the theory gives insight into checking the organizational structure, design and workability. In this discussion, it is evident that TQM technique has no problem rather the manner in which managers adopt it worsens its effectiveness. I strongly recommend the management to embrace the above ethics of business leadership for successful organizational change, development, management and innovation. References Braverman, H. (1974). Labor and monopoly capital. New York: Monthly Review Press. Child, J. (1972). Organizational structure, environment and performance: The role of strategic choice. Sociology 6(1), 1-22. Costa, J. (1998). The ethical imperative: why moral leadership is good business. Reading, Mass.: Addison-Wesley. Dawson, P. (1994). Organizational change: A process approach. London: Paul Chapman. Dawson, P., & Patrickson, M. (1995). Quality management: The theory and practice of implementing change. Melbourne: Longman Cheshire. Dawson, P., & Patrickson, M. (1991). Total quality management in the Australian banking industry. International journal of quality & reliability management 8 (5), 66-76. Dunphy, D., & Stace, D. (1990). Under new management: Australian organizations in transition. Sydney: McGraw Hill. 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