Change Management - Department Mergers - Literature review Example

Change Management: Department Mergers Name Professor Institution Course Date Change Management: Department Mergers Introduction The 21st century has significantly become competitive for companies and institutions due to intensified globalization. Bielinska-Kwapisz (2014, p.406) claimed that with more countries opening their borders for trade and education, more pressure has been put on institutions of higher learning to innovate, change and survive the competition. In an organizational context, change is defined as a process of transforming an organization to an effective or efficient state. Kotter (2007) defined change management as a collection of processes employed to make sure that change is executed in a logical, controlled and in an orderly manner, thus transforming in the way things are done (Năstase, Giuclea & Bold 2012). While many learning institutions have sort change as the best strategy to survive in the market, research demonstrates that that almost 70 percent of the change plans fails (Burnes 2014, p.2). The situation is attributed to failure in human resource management, particularly employees resistant. One of the case studies in focus is the change process driven by a Dutch University. The University resolved to merge three academic departments to create a business school. Therefore, drawing from literature and journal articles on change management this paper will discuss the way the change process could be managed and resistance can be minimized. Case Study and Why Change Was Needed (Aim of the Case) Competition has been driving the change agenda in the institution of higher learning and making them to review their strategies. This paper focuses on a Dutch University, which reviews its decision to initiate change. In its change strategy, the institution resolved to merge three academic departments to create a business school. The top management made a decision to merge three departments, including finance and management studies, accounting and economics. The merger was as a result of the university restructuring strategy which is aimed at enhancing the general ranking of the university. The studies show that all the departments had different sub-culture hence the merger could be affected by such issue. As such, the paper will draw from literature and journal articles to explain on how to facilitate and manage the change process. Also the paper will discuss how resistance can be minimized. Change Process and Management Change process happens in most organizations today (Correia, Cunha & Scholten 2013, p.324). Despite its intention, research has found that most of them fail due to poor management. This is referred to as economies of scale. The radical changes in the market are about having few departments which are efficient with few roles which ensure there is no job duplication. Managing change and minimizing resistance has been widely discussed by many theorists. One of such management theorists is Kurt Lewin who even recommended model for managing change. Kansal and Chandani (2014, p.212) posited that Lewin’s change process model has three phases including freezing, transition and refreezing. The first phase is called unfreezing and it involves discontinuing the existing culture and sub-cultures, behaviors, attitude and current practices. As stated earlier, Dutch University departments had created sub-cultures which determined their behaviors. It means it would be difficult to introduce the staffs from another department to a new culture. Theory cognitive dissonance holds that staffs attempt to be unswerving or consistent in their behavior and attitudes when they have a sub-culture. It means the merger was going to be opposed because it disrupts their comfort zone and creates difficulty of learning new ways of doing things. Therefore, to reduce situations of resistance, the sub-culture must be discontinued. The second phase is referred to as transition and entails training the employees the new concept (Kansal & Chandani, 2014, p.212). Training and development is an important element in the organization as it enables the staff to adapt to new policies. Experts hold that training and development become essential for the organization if its intention and value matches the business strategy. According to Teena & Sanjay (2014), training and development implies to the practice of impacting knowledge, competence and skills on people to be able to do a specific task. Major business challenges need that the HR departments thoughtfully research about their position in the market and determine knowledge, competence and skills required to be effective (Sharma 2007). The third phase is called refreezing and involves reinforcing the new practices, behaviors and attitude immediately change agenda is adopted. Once Dutch university’s business school is set, new culture and practices should be formulated and reinforced into such practices. When every employee is integrated into the system and culture chances of resistance is reduced. Other scholars and management experts have also contributed towards the theory of management. Kotter developed 8-Stages Change Model to explain the change process. Kotter’s eight steps include creating urgency, forming a powerful coalition, forming an influential coalition, communicating the vision for change, eliminating obstacles, creating a short-term win, building on that change and anchoring the adjustments in the corporate culture of the organization. Todnem (2005, p.370) argued that all organizations ought to create some sense of urgency if they are to compete. Kotter pointed out that creating urgency helps the organization spark some motivation to get the operations moving. In this perspective, the urgency for Dutch University is to merge the departments which have been dragging behind the efficiency of the institution. The administrators creating urgency is not enough. Creating a powerful coalition with top management is necessary. Change management takes powerful leadership and support from influential individual within the firm (Kotter, 2007, p.99). Together with influential people and support from the customers, a powerful coalition has to be made (Lines, 2007, p.145). For the Dutch University, a coalition can formed by former heads of three departments coming together to see change being adopted. When managers first begin thinking concerning change, there will perhaps be numerous outstanding ideas, concepts and solutions coming up (Kotter, 2007, p.104). The managers can then connect these ideas and concepts to a larger vision which employees can seize and easily remember. The vision must clearly be employees to help them understand why the manager is requesting them to change (Self, Armenakis & Schraeder, 2007, p.213). Other stages of the change process entail removing obstacles, creating term goals and building the change culture. Resistance to change Change also has its faults when poorly handled (Weber & Drori, 2008, p.34). Departmental Mergers have its effects on managers, employees, systems alignment and sub-culture. Just like employees, in mergers, managers are likely to lose their jobs as the company consolidates some positions and responsibility. Emerging three departments means two departmental heads are likely to lose their position or be demoted to just staff. Some employees are also likely to be laid off, hence increasing the job losses. The research has found that the panic about job loss can make employees and middle level managers to sabotage the change process (Zell 2003, p.74). Mergers also affect systems alignment. The three departments, finance and management studies, accounting and economy have different systems or operation and how they link up with the rest of the organization because they offer different courses. Correia, Cunha and Scholten (2013, p.326) argued that doing away with such system disorients the alignment hence disrupting the flow of operation. Creating or restricting a new efficient always takes time and within that time the University can be affected in terms of performance. As much as a sub-culture affects merger, merger also affects sub-culture. Sub-culture has kept the departments going for many years and has created a work flow because the employees understand what is required of them. However, doing away with the department creates confusion among employees. Cording, Christmann and King (2008, p.746) argued that mergers are crucial organizational life situations which create strong internal causal ambiguity and confusion. Cording, Christmann and King (2008, p.746) stated that causal ambiguity exists not just at an inter-firm level, because of the cultural differences which could hamper the knowledge transfer during the post-merger phase, but also at a level of intra-firm, especially among the middle executive who work as implementers of the strategy, and employees who are afraid of failure of career development and job loss (Lakshman, 2011, p.608). Merger also comes with employees’ resistance. Usually organizations have cultures and behaviors which members get rooted to after spending many years hence getting used to their members and even their position inside the company and find a comfort zone (Burnes 2014, p.12). Therefore, moving from such comforting creates a high resistance. While employees are being forced to change, they become less motivated and could even resign. Resistance may occur to be moderated by the nature of transformation itself, which is the degree in which it challenges an individual’s psychological framework. Van de Ven & Poole (1995, p.518) held that change always causes tension between the value and behavior of the employees, and their roles. In summary, this hypothesis indicate that the forces driving change may cause differences hence preventing change, which will lead the organization to acquire change which might enable them adopt an advance to adjust therefore allowing those who are concerned to reflect on their behaviors and attitudes (Burnes 2014, p.21). Some of the expectations of the employees may include promotion prospects, pay, training and the list is endless, while the employers’ expectations may include faithfulness, respect, work effort, commitment, responsibility, and so on. Once both sets of expectations are agreed upon, then virtual agreement may prevail, but when the employers decide not to adhere to the agreement, this may cause rebellion and conflicts from the employee (Baker 1999, p.55). Employees also resist change due to uncertainty, fear of unknown and stress that comes with it. During this time, employees often lose control of their behaviors. The process leads to increase in stress and less productivity. Erwin (2009, p.31) opined that at the period change, organization is full or rumor mill since employees may become skeptical concerning whether the process will favor them or not. At the time of introducing change, employees can be in the emotional state, which might not be externally apparent (Todnem 2005, p.372). In the first stage of reaction to change, employees normally experience fear, since they feel removed from their comfort zone. Sub Cultures According to Khatib (1996, p.20), the subculture is described as a subset of the institution’s members who interrelate frequently with no one being distinct on the group in the organization and create collective understandings. Subculture is often present within departmental separation or geographical designations as demonstrated by three departments within Dutch university. Since subcultures are often spread all over an organization, employees could be unmindful to other departmental subcultures a situation which may result to conflicting relationships. When more departments of an organization merge, culture conflict is foreseeable. In some cases such as Dutch University, departments have sub-cultures which guide their behaviors, values and operations. Stoltzfus, Stohl and Seibold (2011, p.6) pointed out that as the employees get to familiarize with one another, there will certainly be divergence and real or imagined losses on all the departments. Staffs could fear jobs loses or missing the opportunities which they could have (Correia, Cunha & Scholten 2013, p.327). Such fear might negatively affect productivity and could make the employees to leave Dutch University to look for jobs somewhere else. It is vital for the Dutch administrators and HR managers to understand this and offers opportunities for staffs to know one another, to candidly tackle these concerns, and work towards the formulation of the new culture. However, some management professionals think resistance is sometimes good because it enable the company to identify human resource management weaknesses so as to rectify them (Burnes 2014, p.11). Understanding sub-cultural differences have been found to reduce employees’ resistance. Sub-cultures play a critical role in the failure or success of a new department, particularly in the process of the merger (Weber & Drori 2008, p.25). For instance, it has been found that sub-cultural differences were mostly blamed for failure in the merger between Daimler and Chrysler. In this merger, the managers did not pay attention to those employees from both Daimler and Chrysler had difference travel expenses, varying pay scale and different approach to life (Kansal & Chandani, 2014, p.213). Also, Daimler preferred structured and formal style, whereas Chrysler preferred a freewheeling and relaxed style. Failure to inspire a transition between these two groups of employees led to the merger downfall. Therefore, leaders need to spend time with employees to know their differences and what affect them. Recommendations Merger also creates negative competition. When staffs are worried regarding their job security, they sometimes create competition with colleagues that can lead to conflict. During departmental mergers, it is critical for the university administrators and human resource manager to be keen to indications of the negative competition in order to make sure that staffs are informed concerning the effects on the job. Whereas some competition can be regarded as good, some are bad, particularly when it results in negative conflict and tension within the organization (Darwish & Singh 2013, p.675). Employees Involvement Change is a new form of a policy or operations; hence everyone is needed on board (Graetz, Rimmer, Smith & Lawrence 2010, p.62). As such, employee’s involvement is highly required to reduce situations of resistance. Employee involvement provides an opportunity and platform for staffs and managers from the three departments to have the knowledge about how every unit worked. When the staffs interact, they disseminate knowledge concerning the systems, process, budget and operations. In this way, the employees will build trust which is essential in knowledge creation. Clear communication Having a clear goal and communication is important in managing change and reducing resistance. Senior administrators at the Dutch University need to create new goal, vision, policies and value for the business school before it is launched. Kansal and Chandani (2014, p.213) asserted that the employees need be clearly informed about the goals so as to provide direction of what the institutions requires. Employees who are informed of the company goal feel valued and part of the organization (Năstase, Giuclea & Bold 2012, p.8). Research has found that organization with no clear goals, create less ambitious employees. Integration plan Integration of plan is another way of managing change and reducing employees’ resistance. The first stage ought to be creating a change process team consisting of the senior managers from the three departments. Instead of concentrating on day-to-day activities, the managers needs be in charge of carrying out post merger management efficiently (Kansal & Chandani, 2014, p.213). It is prudent they communicate the change process to the employees early enough. The process can do be done using intranet, group meetings or webcast. Hill and Jones (2007, p.71) opined that informing every staff uniformly will reduce the possibility for spread of half truths. These managers need to convince the staffs realize the advantages of the merger. Conclusion In conclusion, changes that have taken place in the business arena in the recent past are the confirmation of the dynamics in the world of business. Modern organizations must discontinue from remaining rigid in the face of that change. Even though, change comes with challenges such as insufficient resources and employees resistant it also brings organization effectiveness and competitive advantages. 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