Reflection on Organizational Change - Literature review Example

Reflection on Organizational change Table of Contents Table of Contents 1 1.0 Introduction 1 2.0 Perspectives/ Assumptions of Managing Change Held by Major Change Agents Studied In Nokia’s Case Study 2 3.0 Outcomes of the Above Perspectives 4 4.0 How Personal Perspective of Managing Change Has Changed Over the Semester 5 4.1 Understanding of change management before start of the course 5 4.2 How the course has shifted my understanding of change management and philosophy of change management 6 4.3 key events that affected my view about change management 7 5.0 The Implication of My Present Perspective on My Approach on Future Organizational Change 9 6.0 Conclusion 10 References 11 1.0 Introduction Tung (2001, p.41) introduces an interesting scenario where he postulates that it is not the strongest that survives, but those who are able to anticipate, shape and adapt to change. The contemporary business environment is changing at a rate that is an unprecedented. This environment is characterized by stiff competition; technological advancement, innovation and change; privatization, deregulations, as well as scarce resources. As a result, business organizations must embrace change resulting from such a dynamic business environment if they desire to realize their vision, mission and objectives/goals. It is for this reason that business organizations change in order to adapt to the prevailing business environment to gain competitive advantage. In the process, business operations, processes as well as rules are revised; some lines of products are dropped while others are introduced; new equipments replace old ones; and adjustments are performed on the workforce depending on both the external and internal conditions (Agboola and Salawu, 2011). These organizational changes cause employees to experience or undergo a process of reaction. According to Bovey and Hede (2001), this process of reaction has four phases including; initial denial, followed by resistance, then gradual exploration and finally eventual commitment. Oreg (2006) reiterate that resistance to organizational change is a tridimensional adverse attitude towards organizational change, including cognitive, behavioral and affective components. Even though these components are distinct, they are interdependent. The need for organizational change is a pervasive phenomenon in contemporary business organization as a result of forces such as politically oriented shifts towards neo-liberalism and globalization among others. As a result, employees’ resistance to organization change becomes the greatest barrier to the ultimate organizational change initiatives (Hendrickson and Gray, 2012). This paper outlines personal reflection on organizational change. 2.0 Perspectives/ Assumptions of Managing Change Held by Major Change Agents Studied In Nokia’s Case Study Change can be regarded as making something completely different from its initial status. It involves loosing the familiar and engaging/confronting the unknown. In an organization, change can result into the alteration of processes of manufacturing and flows; organizational structures; procedures; organizational policies; as well as operation costs. In addition, organizational change influences the allocation of both material and human resources in an organization; and fosters organizational competition which can lead to the heating up of organizational political climate (Agboola and Salawu, 2011). Smallan and Sayers (2009) indicate that organizational change generates emotions among employees since they experience the change process as well as the impacts. In business organizations, affective culture influences how employees experience and express their emotions towards organizational change. The main change agent to be explored in the case of Nokia and the assumptions held is that of CEO Stephen Elop. The reason for choosing him is based from the fact that he realized the need for change in Nokia by taking lead initiative in Smartphone manufacturing after the company had lagged behind in development of the same thus, relinquishing leadership position to Apple Inc. and Samsung. In a nutshell he has been at the centre of restructuring Nokia so that they can regain lost market leadership that had seen them be dominant player in previous years. While taking over, Stephen Elop observed that Nokia is on a “burning platform” and postulated that if the company does not up its effort on innovative trends, they will lag behind compared to their competitors who are mile ahead. In his memo, Elop elaborated his strategic review for Nokia to undergo a major reform program in which include downsizing the operations in coming years (The Wall Street Journal 2011; Tilson 2011). The way Elop manages change is embedded in certain factors that evident in the process that he has initiated. There are numerous perspectives that can be derived from change management process by Elop at Nokia. The paper will try to highlight a number of these assumptions. Philosophies driven by Elop so as to Initiate and sustain change include reviewing organizational structure to be in sync with the desired end, reward employees according to their value and output so that they can work towards the desired position, relationship management so as to create cohesion and reduce resistance through social skills and power and leadership in creating culture that is desired. Elop has applied the concept of leadership so as to reduce resistance to change and move the employees towards the desired position. Ramesh (2010, p. 2 & 3), starts with identifying the importance of soft skills in an individual and its relation to career success. He draws an observation that emotions and emotional intelligence are important and affects how we interact and perceive things at work place. To drive change, the CEO applied the concept of ‘The Burning Memo’ (Hemus 2011). This allows one to build an assumption that the CEO applied interpreter and director framework so as to show the need of initiating change (Palmer et al. 2009, p.27-28). Groups/ organizations are made of people with different personalities. The success of the organization will be tied on how the manger is able to manage various personalities in it. Belbin understands group as a body made of people with no significance attached to positions, but roles. This approach can then be used to build behavioral strengths and weaknesses in organization. The theory proposes nine roles and each role are best tapped through the act of balancing between strength and allowable weaknesses (Belbin, 2011, p. 9). These roles are defined according to one contribution to the team. The nine roles include plant who is creative, resource investigator, coordinator, shaper, monitor evaluator, team worker, implementer, complementer finisher and specialist. It is recorded that employees accused the predecessor of Elop for running a politicised organization. However, the new CEO has entrenched communication and transparency (Burrows 2011). The next perspective is on reward management. The concept of transactional leadership is seen to be based on the traditional roles of a manager of controlling and organizing. The tenet of this approach is to appeal to the self interest of those being led. One basis of attaining this kind of leadership is through reward and punishment management. According to Armstrong and Murlis (2007, p. 99) employees ought to be paid according to their skills and contribution to the organization. Various business organizations have realized the importance of having “integrated and enriched value exchange between an employer and its employees” (Alliance for work-life progress, 2006). Reward management is based on motivation theory whereby one feel encouraged when they are rewarded for their achievements. Burrows (2011) observe that employees are satisfied with Nokia’s current reward. 3.0 Outcomes of the Above Perspectives The above philosophies as driven by the current CEO have bore certain fruits. The critical one is the decision to move into Smartphone production. Initially, Nokia was reluctant to venture into Smartphone production. However, the market trends as driven by Apple Inc and Samsung showed that the market trend was moving towards that where entertainment and communication are intertwined into one platform (Spektor 2012). The slowness of being a fast mover in Smartphone manufacturing capped its competitiveness in high-end smartphone market (Carew, S. & Virki, T 2012). This has seen the company’s market share drop to 17%, from 40% (2007-2012), and only 12% share in the Smartphone segment compared with Apple and Samsung that have 50% market share combined (Nokia Corporation, 2012). However, to redeem themselves, the company has engaged in restructuring by laying off employees and reassigning others. For instance, in 2011, Nokia announced it would cut 3,500 jobs worldwide and shut down its Romanian factory (Moen 2011). The same trend has continued in 2012 when Nokia announced it will lay off 4,000 employees in February and subsequently 1,000 employees in March (O’Brien 2012). Apart from this the company has initiated collaboration with its former competitors like Microsoft. For instance, in 2011, Nokia formed partnership with Microsoft and announced their phones will come with Windows Phone Operating System instead of Symbian and MeeGo (Nokia Corporation 2011). This layoff is seen as unfreezing process where Elop was creating need for change so that those who are not for the process to move out. Moreover, they have ventured into Smartphone manufacturing instead of focusing on phone with basic functions and dual-SIM phone only. 4.0 How Personal Perspective of Managing Change Has Changed Over the Semester 4.1 Understanding of change management before start of the course Before undertaking the course I had one strong belief that initiating called for implementing technical skills only. According to Gitman & McDaniel (2008, p. 226), technical skills comprises of specialized areas of knowledge and expertise and the ability to apply that knowledge. Technical skills are acquired through formal education, through training and job experience Depending on the position of an employee in the management hierarchy, all have a part to play and thus they need some technical management skills. Managers carry out functions such as planning, organizing, leading and controlling (Koontz & Weihrich, 2006, p. 7). In my earlier belief I thought that applying the powers bestowed to you such as planning, controlling, rewarding and organising are enough to drive change. However this has changed as will be highlighted in the immediate following paragraph that shows change deal with people and calls for a great deal of social skills like leadership and emotional intelligence. 4.2 How the course has shifted my understanding of change management and philosophy of change management The greatest change that the course has impacted on me in relation to change is role of social skills like leadership, emotional intelligence, communication and teamwork in driving change by persuading, convincing and inspiring so as to reduce resistance to change and create aura of possibilities. Leadership is wide and a topic of contention. It can be seen as a soft skill or people skill that is derived from interpersonal skills and cognitive power. There are numerous theories developed to try and explore the concept of leadership in an organization. While there is formal educational training, those who make it are the one who are able to inspire and motivate her/his team. Motivation leads to higher synergy and thus successful results. The above aspirations can be achieved by having multi pronged approach like visionary and motivational leadership and recruitment of managers with not only technical skills but also soft skills/peoples skills/interpersonal skills/ emotional intelligence who can understand formal and informal relations between people (Armstrong, 2001, p.7). The essence of all this is to ensure team work, motivated workforce and thus, enhanced productivity. As a manager, one is required to posses’ different skills that contribute towards higher performance and success of an organization. These skills include sourcing and provision of information, knowing group needs and characteristics, planning, evaluation, controlling the group, sharing leadership, analyzing & understanding group resources and representing the group among others. Emotional intelligence is a critical component of social skills that allows a manager to navigate their world. The essence of this argument is that organizations are composed of human beings. The same belief is echoed by numerous literatures that postulate that leadership is about creating vision and sense of possibility for employees through approaches like motivation and reward management. Leadership deals with the future, ideas, people and personalities (Gillard, 2009, p.726). Managers and employees now acknowledge the importance of soft skills such as communication, conflict management, leadership, perception and persuasion as integral part for success (Gillard, 2009, p.725). 4.3 key events that affected my view about change management The one critical event that changed my view about change management is psychological resistance to change and thus, need for emotional intelligence instead of traditional power structures. Kotter and Schlesinger (2008); and Levasseur (2001) post that initiating new order of things in an organization is more difficult to perform, doubtful in terms of success, and dangerous. Implementation of organizational change is usually met by resistance and likelihood of failure because managers more often than not apply ‘one-size-fits-all’ strategies. Employees are usually involved in the change initiatives designs when they lack the information necessary for useful input. As such, to effectively manage employees’ psychological resistance to organizational change, management must tailor their strategies and approaches to organizational change to the potential forms of resistance they are more likely to encounter. For instance, in order to reduce or prevent psychological resistance among employees who fear organizational change it is crucial for the management to provide the prerequisite skills through training and education. In addition, it would be helpful to consider the situational factors. For example it would be recommended to implement change quickly in order to avert imminent crisis despite the likelihood of intensified employees’ psychological resistance to organizational change. Effective management of employees’ psychological resistance to organizational change involves encouraging employees’ participation and involvement in designing and implementing organizational change to increases their commitment. Skills training, facilitation and support enable employees who fear change adjust effectively to the proposed organizational change while negotiation, agreements and offering incentives are crucial strategies in managing resistance from powerful individual or groups within the organization. In addition, manipulation, co-option and the use of coercion may generate intense resentment form employees, it is essential in speeding up the process of organizational change. Coercion involves threat of firing, transfer, and demotion (Kotter and Schlesinger, 2008). Staw (2001) and Lawrence (n.d) note that to effectively manage employees’ psychological resistance to organizational change, organizational managers must not only consider the relationship between job satisfaction and employee performance, but also employees’ attitudes towards change. This is more so because employees are sensitive to organizational shifts as it adjust their attitudes either positively or negatively. As such to effectively manage employees’ psychological resistance to organizational change or rather shifts, organizational management needs to redesign work to improve job satisfaction during the process of organizational change. 5.0 The Implication of My Present Perspective on My Approach on Future Organizational Change At the present I have learnt that social skills especially leadership and emotional intelligence are critical in driving change in an organization. These skills are seen as soft power that talks to the emotional side of an individual instead of other source of powers that create an hierarchy. How this affects my future perspective on organizational change can be seen on two perspectives. The first is goal setting as means of creating urgency so that change can occur. Goal setting informs the employees to conform to the expected standards or quit if they can’t. The second is what is in for the employees. This is best answered by the expectation theory where performers expect to be rewarded. According to Edwin Locke (1968), one of the earlier proponents of goal-setting, posits that goals formulated by individuals themselves contributes a huge portion towards motivating that person for unrivalled performance. The basis for this argument is that the employee will try to attain goals set out and even if they are not met, the employee shall have made a tremendous effort in achieving them and thus, contributing to improved performance. Precisely, this is what performance management aims at. One way of guaranteeing performance is through visionary leadership. Moreover, Brim (2012, p.3) notes that human beings performs well when they have goals and objectives set out for them. On the other hand, expectation theory looks at performance in relation to anticipated satisfaction of valued goals set by them. According to Victor Vroom (1964), people adapt their behavior in certain way so as to attain desired goals. The eventuality tied to employees adapting their behavior according to desired outcome as a result of the goal set by their leader who motivates, directs and empower them, an organizational; culture will be created and thus, change. 6.0 Conclusion The emerging finding is that change is critical for organization so that they can stay afloat in this competitive environment. Change is a complex process that involves soft and technical skills that cuts across factors like power and relations, emotional skills, leadership and organizational structure among others. The course has been an eye opener in the field of organizational change. One critical lesson learnt is the case study and the assumptions held by change agents such as Elop which include organizational structure, rewarding, setting goals and collaboration. The next important lesson is on the key factors that impede change. The lesson learnt is tied to the fact that organization is made of people and they are likely to embrace change because of insecurity and not knowing what is in for them and thus, likely to resist change. The key to this is talking to their psychological side through various approaches. This later observation shows what I have learnt during the semester. Moreover, it is these lessons learnt that will inform how I perceive change in future. References Agboola, A. A. and Salawu, R. O. 2011. Managing Deviant Behavior and Resistance to Change. International Journal of Business and Management, 6(1), 235-242. Alliance for work-life progress (2006). Work and life: what is total rewards? Retrieved on 28 October, 2012 from: http://www.awlp.org/awlp/about/html/aboutus-whatis.html. Armstrong, H. and Murlis, M. (2007). Reward management: a handbook of remuneration strategy and practice. London: Kogan Page. Armstrong, M. 2012. Armstrong’s Handbook of Management and Leadership: Developing Effective People Skills for Better Leadership and Management. New Delhi: Kogan Page Limited. Belbin, 2011. Method, Reliability & Validity, Statistics & Research: A comprehensive review of Belbin’s team roles. Retrieved on 28 October, 2012 from: http://www.belbin.com/content/page/5596/A%20Comprehensive%20Review.pdf Bovey, W. H. and Hede, A. 2001a. Resistance to Organizational Change: The Role of Defence Mechanisms. Journal of Managerial Psychology, 16(7), 534-548. Brim, R. 2012. A history of MBO, and recommendation for today’s manager. Retrieved on 28 October, 2012 from: www.managePro.com. Burrows, P. 2011. Stephen Elop’s Nokia Adventure, Bloomberg Businessweek. Retrieved on 28 October, 2012 from: http://www.businessweek.com/magazine/content/11_24/b4232056703101.htm. Carew, S. & Virki, T. 2012. New Windows phones from Nokia disappoint investors, Reuters. Retrieved on 28 October, 2012 from: http://in.reuters.com/article/2012/09/05/nokia-microsoft-idINDEE88400A20120905. Hendrickson, S. and Gray, E.J. 2012. Legitimizing Resistance to Organizational Change: A Social Work Social Justice Perspective. International Journal of Humanities and Social Science, 2(5), 50-59. Koontz, H. and Weihrich, H. 2008. Essentials of management: an international perspective. New Delhi: Tata McGraw-Hill. Kotter, J. P. and Schlesinger, L. A. 2008. Choosing Strategies for Change. Harvard Business Review, July-August 2008, 130-139. Lawrence, P. R. N.d. How to Deal with Resistance to Change. Harvard Business Review, 49-57. Levasseur, R. E. 2001. People Skills: Change Management Tools – Lewin’s Change Model. Interfaces, 31(4), 71-73. Moen, A. 2011. Nokia Cuts 3,500 Manufacturing Jobs, The Wall Street Journal. Retrieved on 28 October, 2012 from: http://online.wsj.com/article/SB10001424052970204226204576600130074355052.html. Nokia Corporation, 2012. How will the Nokia-Microsoft partnership work?, Nokia. Retrieved on 28 October, 2012 from: http://www.nokia.com/global/about-nokia/about-us/how-will-the-nokia-microsoft-partnership-work-/. O’Brien, K.J. 2012. Nokia to Cut 4,000 Jobs at 3 Factories, New York Times. Retrieved on 28 October, 2012 from: http://www.nytimes.com/2012/02/09/technology/nokia-to-cut-4000-jobs-at-3-factories.html. Oreg, S. 2006. Personality, Context and Resistance to Organizational Change. European Journal of Work and Organizational Psychology, 15(1), 73-101. Palmer, I., Dunford, R. & Akin, G. 2009, Managing Organizational Change: A Multiple Perspectives Approach, McCraw-Hill/Irwin, New York. Ramesh, M. R. G. 2010. The ace of oft skills: communication and etiquette for success. Noida: Dorling Kindersly. Spektor, A. 2012. Samsung Overtakes Nokia to Become World's Largest Handset Vendor in Q1 2012, Strategy Analytics. Retrieved on 28 October, 2012 from: http://www.strategyanalytics.com/default.aspx?mod=pressreleaseviewer&a0=5211. Staw, B. M. 2001. Organizational Psychology and the Pursuit of the Happy Productive Worker. California Management Review, 28(4), 40-53. The Wall Street Journal, 2011. Full Text: Nokia CEO Stephen Elop’s Burning Platform Memo, The Wall Street Journal. Retrieved on 28 October, 2012 from: http://blogs.wsj.com/tech-europe/2011/02/09/full-text-nokia-ceo-stephen-elops-burning-platform-memo/. Tilson, D., Sorensen, C. & Lyytinen,K. 2011. The Paradoxees of Change and Control in Digital Infrastructures, The Mobile Operating System Case, ICMB, pp.26-35. Tung, R. L. 2001. Learning from world class companies. London: Cengage Learning. Read More