Managing Organisational Change - Case Study Example

Introduction Organisational change is defined as the process through which approaches to issues in the organization are shifted from the current state to desired state (Frahm and Brown, 2007). The argument that an organisation must develop capacity for a rapid and continuous change is the most practical and appropriate claim in today’s business environment. The reason for this is that developing capacity in terms of financial resources would enable the organisation to capture and embrace the change process. Additionally, developing capacity in terms of human resource development would increase the expertise required to increase the level of creativity and innovation for an organization to be competitive in the market (Ashmos, Duchon, McDaniel and Huonker, 2002). However, while some commentators hold on to the argument above, others argues that organisations should attempt to introduce painless change. Hence, the purpose of this paper is to explore the two arguments presented by different commentators regarding organizational change in order to reach a concrete position on which of the two arguments is practical in the contemporary business environment. According to Selden (2006) change in the organization can either be planned or unplanned. Planned change refers to the type of change that result from deliberate attempt by the management to alter the way different processes sin the organization are undertaken. Unplanned change on the other hand refers to unforeseen changes that are imposed on the organization and which affect the organizational processes in one way or the other. Changes in policies and government regulations are some of unforeseen changes that occur significantly in the organization that affect the organizational operations. Capacity refers to time, staff and other resources such as money that can be used to enhance change in the organization. Selden (2006) noted that for unplanned and planned organizational change to occur effectively, resource identifications should be the initial step. Organizational management should ensure that appropriate resources are provided and available for rapid and continuous change to occur. With reference to money, Stone (2005) held that money should be made available at all times to cater for both planned and unplanned changes. The author noted that money is required to hire new employees required to enhance organizational change. Additionally, money serves as the key input through which the organization is able to acquire new technologies and physical capital required during organizational change process. Hence, developing this capacity means factoring in a certain amount of money meant for organizational change processes in the organizational budget. In this regard, the author agreed that organisations must develop a capacity for rapid and continuous change. Kotter (2002) concurred that allocating a significant amount of money to organizational change enables the management to undertake both internal and external changes as well as planned and unplanned changes with minimal difficulties because the organization has sufficient funds to undertake the change process. Hence, in terms of financial resources, developing capacity by allocating a substantial amount of money to the change process in order to embrace the rapid and continuous changes that are inevitable in the organization is an important consideration the management of the organization should bear in mind. Kottler (2002), therefore, concluded that organisations must develop a capacity for rapid and continuous change. In addition, developing capacity for rapid and continuous change can also be viewed from the perspective of developing the human resource capacity in the organization. Kotter and Rathgeber (2006) noted that people in the organization hold key intuition, information; instincts and ideas that can help bring effective change in the organization. In this regard, developing capacity for rapid and continuous change means establishing a conducive environment for people to participate in the change process. Hence, Kotter and Rathgeber (2006) agreed that developing a capacity for rapid and continuous change by providing an enabling environment for the people in the organization was important during organizational change process. Clampitt, Williams and DeKock, (2002) concurred that encouraging personnel to participate fully in organizational planning process is one of the most significant ways of developing capacity for rapid and continuous change in the organization. The level of participation must come from intended and conscious effort by the management to extend and expand opportunities for employees below them to engage in the organizational planning process. Clampitt, Williams and DeKock (2002) continued that expanding and widening the democratic space in the organization to encourage employees to participate fully in organizational planning is an important phenomenon that leads to effective job performance and high job satisfaction. Clampitt, Williams and DeKock (2002) held that highly satisfied and effective employees become champions of change in the organization rather than obstacles of change. Hence, the authors concluded that organizations must develop people’s capacity as an important resource that enhances rapid and continuous change in the organization According to Pierce, Kostova and Dirks, (2001) developing capacity for rapid and continuous change means that capacity builders and developers must identify the pre-existing expertise in order to single out areas of training and improvement. Organizations must engage in comprehensive assessment and study of areas that need improvement in the organization. For example, technological changes in the contemporary business environment are the most critical components of organizational success. In this respect, organizations must have key capabilities and expertise to embrace technological changes. This is only possible when organizations have well developed capacity to embrace and implement changes for the benefit of the organization. Pierce, Kostova and Dirks (2001) noted that one of the key areas for capacity development where organizations must focus on is knowledge building. This entails investing heavily in knowledge as the foundation capacity for establishing a strong system of education for capacity building among the employees in the organization. Continuous learning and development of professional skills in the organization should be undertaken as a key step towards developing capacity for rapid and continuous change. The reason behind human resource development as one way for capacity development is that people can hinder change in the organization. Similarly, well prepared people embrace change easily and use it for the benefit of the organization. As a result, Pierce, Kostova and Dirks (2001) concluded that organizations should develop people’s capacity through training as an important resource that enhances rapid and continuous change in the organization. Basing their arguments on the issue of organizational culture, Synnot and Fitzgerald (2007) held that organizations must develop capacity for rapid and continuous change in order to overcome the resistance brought by organizational culture towards change in the organization. Synnot and Fitzgerald (2007) observed that developing capacity involves educating the employees on the need to embrace different cultures in carrying out activities in the organization. For example, employees should be guided through different ways of interacting with machines (computer-human interaction). Such guidance involves equipping the employees with computer skills required to undertake different activities in the organization. The need for capacity development through provision of basic skills is to eliminate and prevent any form of resistance to change brought by the use of one method of carrying out activities in the organization. Synnot and Fitzgerald (2007) concluded that organisations must develop a capacity for rapid and continuous change. Contrarily, other commentators have argued that organisations should attempt to introduce painless change. According to Deborah (2003), today’s dynamic environment is characterised by volatile and hyper-competitive markets. This requires the organisation to undertake positive strides towards effecting positive changes that can enhance organizational processes and performance. The proposition that organisations should attempt to introduce painless change arise from the fact that organizational change comes with numerous risk factors that can cause pain both among the people and the organizational processes. Among the most painful risk factors that arise from organisational change are associated directly with costs. One of such risk factors is budget overrun where the anticipated change takes more than the allocated financial resources. This does not only amount to financial loss but it also amounts to unnecessary delays in schedule targets. Deborah (2003) noted that delays in targeted objectives plunges the organization into further financial losses which means that the organization suffer more when the anticipated change is not completed in the right time. Hence, the author concluded that organizations should attempt to introduce painless change in order to avoid beating unnecessary costs. Additionally, change can result into pain associated with poor communication between organizational departments and teams. Poor communication between teams and departments involved in the change process result into re-work of already completed processes (Clampitt and Williams, 2005). Re-work may also arise when unforeseen challenges manifests in the course of the change process. Other risk factors associated with organisational change that may translate into painful costs on the part of the organization include resistance to change particularly from the employees. Hence, organizations should attempt to introduce painless change in order to avoid resistance from employees that may hinder proper performance of the employees. Abrahamson (2000 noted that abandonment of projects when incomplete is another risk factor that increases the costs incurred by an organization during the change process. Abandonment of projects is a pain that manifests itself during harsh economic times such as during economic recession when funds allocated to the projects are channelled to other activities in the organization in order to sustain the firm during the short term period. Such abandoned projects are regarded as losses to the organization because they do not generate the anticipated benefits to the organization. Organizations introduce painless change in the organization through impact analysis and risk assessment. The aim of impact analysis and risk assessment is to evaluate the impact and risks associated with the anticipated changes (Abrahamson, 2000). A highly risky change process is discarded because such process comes with numerous painful challenges such as huge budgetary allocations even during hard economic times. When commentators argue that organisations should attempt to introduce painless changes, they refer to the aspect of introducing changes that have little impact on organizational processes (Hunt, 2003). For example, instead of implementing information technology (IT), organizations may opt to use manual methods to handle activities and employ a few people on contract to handle the manual work. The IT project is discarded because of its associated costs such as buying equipments for connection; payment of bills (to mention a few) and the most painless change is introduced. From the above arguments, it is evident that organizations have different approaches to the change processes. While the second proposition by the commentators seems easier and painless to undertake, the competitive nature of the modern business environment demands that organizations should engage in the most risky projects in order to breakeven (Waddell, Cummings and Worley, 2007). This means that change is inevitable and the most successful organization is not the one that runs from risky projects but the one that adapts easily to the change process. In this regard, the second claim that organisations should attempt instead to introduce painless change does not appear relevant in the modern business environment characterised by hyper-competitive and volatile markets (Schawrz and Shulman, 2007) Hyper-competitive means that organisations can only succeed in the current business environment when they deliver differentiated services and products far from what other competitors are able to deliver. Volatile markets mean that any slight mistake made by the organisation may result into huge losses particularly due to the loss of customers. In order to deliver high quality services and products, organisations must engage in new methods of production which come with numerous costs of implementation (Palmer, Dunford and Akin, 2006). This is a painful process that the organisation must embrace in order to realize the full benefits of being in the competitive market. Hence, introducing painless change is not practical in today’s business environment that demands active innovation and creativity which translates into risky investments on the part of the organisation (Senior and Fleming, 2010). Hence, the first claim that organisations must develop capacity for rapid and continuous changes is the most practical and appropriate claim in today’s business environment. The reason for this is that developing capacity in terms of financial resources would enable the organisation to capture and embrace the change process. Additionally, developing capacity in terms of human resource development would increase the expertise required to increase the level of creativity and innovation for an organization to be competitive in the market. Developing capacity in terms of training and knowledge acquisition would enhance the change process and eliminate any resistance to the change process. Costs associated with abandonment of projects before they are completed would not be realized in the organization. Rather than shying away from undertaking risky or painful projects, developing capacity would help to undertake the most risky and the most beneficial projects to the organization. In conclusion, the first claim that organisations should develop capacity for rapid and continuous change is the most appropriate in today’s business environment characterised by intensive competition. References Abrahamson, E. (2000). Change without pain. Harvard Business Review, Vol. 78 (4), p.34-37 Ashmos, D., Duchon, D., McDaniel, R. & Huonker, J. (2002). What a mess! Participation as a simple managerial rule to 'complexity' organizations. People Management Journal, 39, 189-206. Clampitt, P., and Williams, M. (2005). Conceptualizing and measuring how employees and organizations manage uncertainty. Journal of Managerial Psychology, 22, 315-324 Clampitt, P., Williams, M., and DeKoch, R. (2002). Embracing uncertainty: The executive's challenge. Journal of Management Development, 2, 212-228. Deborah, L. (2003). Evaluation of capacity building: Lessons from the field. Washington, DC: McGraw Hill Publishers. Frahm, J., and Brown, K. (2007). First steps: Linking change communication to change receptivity. Journal of Management Development, 20, 370-387. Hunt, J. (2003). Chapter one: The anatomy of organisational change in the twenty-first century. In Weisner, R. & Millett, B. (Eds.), Human Resource Management; Challenges & Future Directions (pp27). Milton, Australia: John Wiley Kottler, K. (2002). Developing capacity for change. New York: McGraw Hill Publishers. Kotter, K., and Rathgeber, J. (2006). Organization, environment and change. New York: Sage Publishers. Palmer, I., Dunford, R. and Akin, G. (2006). Managing organizational change: A multiple perspectives approach. New York: McGraw-Hill Irwin. Pierce, J., Kostova, T., and Dirks, K. (2001). Toward a theory of psychological ownership in organizations. Academy of Management Review, 26, 295-310. Schawrz, G., and Shulman, A. (2007). The pattering of limited structural change. Journal of Organizational Change Management, 20, 829-846. Selden, B. (2006). Communicating change, HR Monthly, May 2006, p34. Senior, B., and Fleming, J. (2010). Organizational change, prentice hall financial Times, Harlow, Essex, England. Stone, R. (2005). Human resource management, 5th Ed. John Wiley & Sons, Queensland. p589. Synnot, J., and Fitzgerald, K. (2007). Toolbox for change: A practical approach. Brisbane: Danjugah. Waddell, D., Cummings, T. and Worley, C. (2007). Organisation development and change, Asia Pacific, Third Edition, Cengage Learning, South Melbourne. Read More