Change Management in the Modern Organization - Literature review Example

Change management in the modern organization Name Professor Institution Course Date Change management in the modern organization Increase in globalization in the 21st century has significantly escalated the number of companies in the markets. As the companies cross borders, people’s lives are being shaped by emerging technologies, improving global economy, growth of technical know-how and cultural and political changes (Năstase, Giuclea & Bold 2012, p.5). In a wake of such changes, organizations have become innovative to gain competitive advantage. This is a manifestation that within just a short period, the ability to transform has turned out to be the core competency for every organization all over the globe. Change management has become very critical in running the modern organizations, and companies which are unable to adopt to changes are likely to survive irrespective of its industry or sector (McKinsey & Company 2008, p.2). Therefore, this essay focuses on change management in the modern organization. Broadly under this topic, the essay will define and explain change management, major challenges of managing change in organizations, current theories on change management, effects of change management on organizational effectiveness. Also, the essay will analyze how the current change management theories can be applied to support organizations and recent examples from the media which supports change management. According to Kotter (2011), management change is defined as a strategy of transitioning staff, organizations and teams to a needed future state. In involves the collection of processes employed to make sure that change is executed in a logical, orderly and controlled way which to transformation in the way things are done (Rogers, Meehan & Tanner 2006). The emphasis is on the broader effects of change, especially on employees as teams or individual’s progress from the present state to a new one. It is never that simple and moves from simple task change to a major transformation for an organization to get to its potential. Definition, theories and process of change management is drawn from numerous topical areas including behavioral science, psychology, system thinking and engineering (Frantz 2004, p.156). This is because change does not take place in isolation, is driven by people and affect the organization and the society. In the event that change happens, people experience transition in their jobs, group formation, organizational innovation, reorganization. For instance, in the recent years after the global economic crisis of 2008, Qantas Airlines has posted dismal financial performance leading to drop in market share (Mules 2013). The management cites low demands for air travel, the high cost of fuel, the wage bill and general high cost of operations as the cause of poor performance. Mules (2013) contend that in 2011, the company proposes structural organization change which is projected to transform the Qantas in the near future. In these changes, some employees would be affected. In the first year, 1000 people are the going to lose their jobs due to layoffs. Part of the reasons is that, the company will abandon unprofitable routes. In total, the company will lay-off up to 5000 employees (Mules 2013). It will affect individual employees, but it has to be carried to cut operation costs. Even though it’s the managers at the top level that steer change, but the success of the change cannot depend of them alone. Graetz & Smith (2010, p.136) claim that the fast pace of change which has taken place in the 21st century make it needful for leaders to distribute some influence through all levels of the organization. The change process is a long process which has strong effect of the organization. Due to that nature, managers leading change are likely to face several major challenges. Some of the challenges of managing change include resistance to change, planning and resource (both human and financial). Employees’ resistance remains one of the major challenges of effecting change. Normally, organizations have cultures and habits which members get rooted to after spending many years. They get used to members of their organization and even their position within the company and find a comfort zone (Burnes 2014, p.12). Thus, moving from such comforting creates a strong resistance. When employees are forced to change, they become less motivated and could even resign. Lewin and Volberda (1999) advise that change needs combining multiple hypothetical perspectives to enhance integration within the company and avoid fragmentation (Graetz & Smith 2010, p.139). Change resistance lowers performance in the long term and denying the company an opportunity to compete effectively. For instance, during change, employees may be promoted, demoted or laid-off. Burnes (2014, p.15) argues that in a situation that employees are laid-off; the remaining employees could have low morale because of being less optimistic on job security. With low morale, implementation of new project will be slow hence delays. When staff spends time concentrating on change, resistance happening in the workplace normally poorly concentrates on assigned tasks (Huczynski & Buchanan 2006). Such situation result to inefficiency in less output. Management experts think that clear communication is highly recommended where managers can inform employees of the proposed change (Năstase, Giuclea & Bold 2012, p.7). According to Graetz & Smith (2010, p.139), the research holds that involving into wide range of different views offers the manager the platform to get the views on the change management and build different methods of engagement. Involving employees make them feel valued and asset to the firm and willing to take part in the change. Planning is another challenge which many companies face today. In planning, the problem must be identified so as to strategize on how the change can be executed (Năstase, Giuclea & Bold 2012, p.13). This process involves experience experts who understand the market and are not going to gamble to achieve results. The challenge with planning is that currently, change in business environment takes place so fast hence planning has to be hurried so that the product cannot be bypassed by time. However, if change is hurried carried out without laying a proper structure, it may not be successful. Graetz & Smith (2010, p.142 posit that Change management needs adequate and proper resources to be effective and a success to the organization. Today, change has a rapid pace and requires managers to implement continuous change. The means change needs massive resources in terms of finance and employees. This is normally a big challenge for companies which does not have a large financial or the ones which have made losses in the recent years (Graetz & Smith 2010, p.142). Also, change needs employees and experts who are well remunerated; this can only be done when a company makes a huge profit. Ansett Australia Airline was one of the companies which faced resource challenges hence could not pay its employees to implement needed changes. The company finally grounded all its planes and went into administration in 2001. In the past, there have been many theories which have been proposed by different theorists to support the change process. Some of these theories include life-cycle, dialectics, evolution and teleology. These theories operate as the building-blocks for describing change processes within the organization (van de Ven & Poole 1995 p.510). Life-cycle theory is based on the notion that change is always forthcoming. According van de Ven & Poole 1995 p.513), the theory also is founded on the idea that developing entity often has some fundamental form, program and logic which controls the change process and moves it from one point to another. The theory is likened to change process in the career of an employee with how he gets at an entry and climbs the ladder of management to the top of hierarchy. It can also be likened to process of formation of a formidable group within the organization to work on projects. Life-cycle theory holds that one process contributes to another leading to change. Institutional rules which bring change can also be described in sequence to help employees to be accurate and avoid mistakes. For instance, in the U.S, Food and Drug Administration agencies recommend a series of steps which all companies have to follow to manufacture biomedical product or a drug (van de Ven & Poole 1995, p.515). Dialectics theory also explains the change process. van de Ven & Poole (1995, p.517) asserts that it views organization to operate in a pluralistic environment having colliding forces, values and events which compete with one another for control and dominance. These colliding factors can happen internally or even externally. Such internal forces could be conflicting organizational goals or interest of groups while external forces could be conflicting societal needs and culture (van de Ven & Poole, 1995, p.517). Change takes place when one of the opposing forces gains maximum power to eliminate status quo. An example is Egypt revolution when the opposition mobilizes the power to overthrow the government. Effectiveness is an aspect that every company wants to achieve to remain relevant and sustainable. Effectiveness can be based on individual, organization and even teams. Change normally, brings in new and experienced employees or promotes the existing ones. Hatch & Cunliffee (2006) argue that when experienced employees comes to organizations, new ideas are fostered ensuring there is innovation and organizational learning, as a result competitive advantage is gained. On the other hand, if existing employees are promoted during the change process, they became motivated and effectively adjust to new challenges (Huczynski & Buchanan, 2006). This is because they feel their contribution towards the company is appreciated and work to achieve its goals. Change can also eliminate non-performing employees. Such employees often drag back the results of the company and doing away with them reduces the high cost of operations. The company can also opt to train its employees on new skills and strategies in that market. Sharma (2007) holds that training ensures that the company is effective in understanding and satisfying new societal needs. Apple Inc understands that change management based on training and organizational learning results to effectiveness hence built its own institution of learning called Apple Campus. Also, effectiveness in an organization can be brought by change in the type of organization structure. It will help define roles and create strong relationship between members of the organization. The current theories of management are very relevant to effecting change that is rapidly happening within the business sectors. Life-cycle is very important in career development of an employee. This theory holds that change is a sequence of event which cannot be done overnight (van de Ven & Poole 1995, p.515). This is similar to a career of an employee. Every organization needs to be patient with their employees while training them on how to move from one point to another. This theory also supports an innovation process within the organization. Change should be long lasting and be able to give the company competitive edge for long enough before a new idea props up. It is the same reason why innovation takes five steps including need recognition, problem research, idea development, commercialization and adoption (van de Ven & Poole 1995, p.515). Dialectical theory on the other hand supports maintaining change for every event, logics and forces which conflict one another with and outside the company (van de Ven & Poole 1995, p.517). For instance, if the employees are not well remunerated but work very hard for the company, they are likely to protest thus tainting the image of the company. Also, if the company has conflicting organizational goals, everybody will pursue personal interest. In conclusion, the essay has established the in the globalized business world, change is inevitable and modern managers must have strategies of managing to be able to survive. Creating a learning organization is important to employees and organization in general in keeping with changes which taking place within the industry. Change is not easy people always state and people undertaking are likely to be overwhelmed with challenges such as resources, poor planning and employees’ resistance. However, managers must aim to succeed through best practices such as communication, employees’ involvement, resources mobilization and proper planning. References Burnes, B 2014, Understanding Resistance to Change – Building on Coch and French, Journal of Change Management, pp.2-25. Frantz, D 2004, Change management, In G. Goethals, G. Sorenson,&J. Burns (Eds.), Encyclopedia of leadership. (pp. 155–158, Thousand Oaks, CA, Sage Publications Graetz, F & Smith, A.C.T 2010, Managing Organizational Change: A Philosophies of Change Approach, Journal of Change Management, Vol. 10, No. 2, pp.135–154. Hatch, M & Cunliffe, A 2006, Organization theory: Modern, symbolic, and postmodern perspectives (2nd ed.), Oxford, Oxford University Press. Huczynski, A & Buchanan, D 2006, Organizational Behaviour: An Introductory Text 6th Ed, Financial Times Prentice Hall. Kotter, J 2011, Change Management vs. Change Leadership -- What's the Difference? Forbes online. Năstase, M, Giuclea, M & Bold, O 2012, The Impact of Change Management in Organizations – a Survey of Methods and Techniques for a Successful Change, Review of International Comparative Management, Vol. 13, No. 1, pp. 5-16. Mules, R 2013, The Long Haul: The QANTAS – Emirates Alliance, Warringal Publications, viewed on 12th December 2014 from http://www.nhs.vic.edu.au/virtualLibrary/busidate/BusiDateVol21No32013.pdf McKinsey & Company 2008, Creating organizational transformations, The McKinsey Quarterly, pp.1–8. 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