Change Management of an Organization - Essay Example

Academia Academia Research 9 February 2006 Change Management of an Organization In the past decades so many organizations laid foundation stone and provided different products and services, none of them is remembered unchanged from the time of initiation, so the change in an organization is a mandatory for keeping the products or services in the growth stage or maturity while avoiding them to appear in the decline stage, today one can see big organizations with big changes in their history, one can say that the change in an organization is like a new blood in it, and that's why most of us say that new blood is good for old organization, perhaps it can be in any form, particularly human resource. Harvey and Brown said in 1992: Organizational development involves the long-term, system-wide application of behavioral science techniques to increase organization effectiveness. OD works on the idea that organization change involves improving the way people work in teams and the way team activities are integrated with organizational goals."(Randal 31) So the above mentioned lines are indicating one more interesting technique to reach organizational goals, that is changing the people's attitude, their way of working, and behavior towards work so that organization can reach its objectives through change which is probably the only way for it to reach its goals as modernization automatically changes the surroundings, behaviors of buyers, the variety of competition and so on. External Change Drivers The business doesn't get changed itself, nor does it require it self to change with out any need as the profitability (growth) or survival is the core objective of any business, but when it comes to change, only external factors make an organization or business change primarily, afterwards the firm changes it self may be in internal manners. The External change drivers that can be seen commonly in this modern world or from the time the changing took place include Mega Environment1, it further includes Technological Element, in which the modern technology that is used outside the firm, perhaps around the world and by the competitors tends to change the organization, the failure to use such technology can result in loss of values, customers, and most importantly long-term profits. The next external change is brought by Economic Element, of course the change in the country's wealth distribution, it's financial debt and the inflation can create unbalance in an organization or any business, such as the decrease in the price of a certain commodity or product can have some negative impact on the firms profitability, specially if the country in which the organization is operated is a socialist economy in which the government owns a lot than the individuals. The next one is Legal-Political Element, these are somewhat the governmental forces that affect the business or organization from outside, such as passing a new taxation rule, or a new policy which implementation can also make an organization to change its norms and policies, in such cases the organizations are forced to follow such rules, or they can be penalized. The Socio-cultural Elements is another external change driver, here the attitudes, norms, traditions, behaviors etc. that the people of the country in which the organization is operated follow, a good example is that if a food business is being operated and Muslims somehow enter into that area demanding the cautionary meat, the organization would have to change and would have to start making the demanded meat. The last of Mega environments is International Element, these are general norms followed by the organizations being operated around the globe, for instance, the McDonald's in every country has to follow somewhat the same standards that parent company is following, other wise it can be penalized. Now lets discuss an other sort of External Change driver, it is called Task Environment2, it includes Customer and Clients, of course they are the only ones because of whom change is adopted, the customers and clients have the biggest potential to actually effect an organizations performance, the change in their buying behavior can change the organization's profitability and can turn it into loss, the next one in this category are Competitors, they can change an organization in a way that they can increase the quality of their products or they can change prices, that can potentially bring change to the organization, failure to make adjustment would result in competitor's domination in the market, Suppliers and Distributors are also blamable for changes in organization, if they would provide poor quality raw material or would not deliver goods on time, the impact can be direct on the organization's reputation and market share, another external changer is Labor Supply, it has often seen that labors are hired by competitors or they leave the job, this can also affect the organization as the most important of them is human resource, the last is Government Agencies that can monitor certain activities like cash flows and standards maintain, can also change organization. Internal Change Drivers The internal factors are necessary for change at times, but they have no such big impact on the organization, their force is very less as compared to external factors because one can control internal factors, but no one can control external factors causing change, however there are few internal factors worthy to be discussed. These factors may include Alteration of Strategies and Plans according to which if an organization changes its objectives or strategies and plans necessary to carry out objectives than it would automatically change the organization internally. Another internal change can prevail from the Employee Behavior, of course employees can create disturbance, in fact in most of the organizations in this modern world the companies have it as their weakness, if the communication between its employees is not good than it can disturb the entire working environment, Organizational Culture Shifts are also culpable for internal changes at times, as they can change the working pattern and thinking of its employees which can result in the benefit of organizations at times as it is also a step towards modernization, the next one can be technological advances, it is quite surprising that it is also an external change driver, but technology is also causing internal change, it can change the forecasting of sales of an organization perhaps positively, it can change the working patterns and also it can motivate the organization and its employees internally, one last and perhaps most important internal change driver that is worthy to be mentioned is Leadership, it an change the entire organization internally and its effects can also be seen externally, when a leader influences the team to work towards the betterment of both, themselves and the organization than it is an extraordinary change in organization and related people. Current State (7 s Framework) "The 7 s framework of Mckinsey is a Value Based Management (VBM) model that describes how one can holistically and effectively organize a company."(Value based Management.net) It is based on the following important factors. Shared Value: Shared value is actually interconnecting the entire organization, it includes the purpose of existence, the attitude of employees, their behavior, their mission, which is always same. Strategy: Strategy is the best-employed way to reach the orgazanziational objectives, it is quite easy to see that strategy is employed by keeping the current state of the organization, it is according to the real market conditions prevailing at that time. Structure: The structure supports the current communication in the organization, the direction of communication may be upward or downward, but it also represents the current state of the oraganization and it is a predetermined standard followed in the organization. System: This actually represents the entire system of the organization, it influences all the departments within the organization, like finance, human resource, marketing. Staff: It represents the current employees and human resources in an organization that are necessary for the work to be carried out. Style: It includes the various styles acquired by the managers to reach organizational goals, it also includes the culture with in which the organization is being operated. Skills: These are the skills that are required to perform the current jobs, and also ensuring that the current jobs are in corporated with the future achievement of goals. Current State (Organizational Development Diagnostic) The diagnosis stage is the first step in the development process, the next two are intervention and evaluation, in the diagnosis the main focus is on the shared beliefs, values, and norms of the organization members that might be in relation to the effectiveness, the main purpose of this step is to identify the undergoing problems in the organization, these problems are identified by gathering data by conducting interviews, questionnaires, group focus, reporting and observations on the employees, the findings are now used to locate the defects prevailing in the organization and corrective measures are taken to ensure that the errors previously occurring are removed, this can potentially improve the situation in the current scenario. Sources of Resistance (Transition Curve) The transition curve can show the firm's past position as well as future3, the transition curve should be designed by keeping in view the current market conditions, it should be in relation to the reality other wise it can cause de motivation and loss of resources. Leadership Theories Following Leadership theories are being used in the modern business world, however while making judgments the leader doesn't remember or knows which theory is being applied or how, more concerns are about its outcome, such theories are also called contingency theories. Fiedler Model (Cognitive Resource Theory) It is a theory that is defining the relationship of stress to the task, but also says that experience and intelligence can overcome stress. Hersey and Blanchard (Situational Leadership Theory) It is another sort of contingency theory that focuses mainly on the follower's readiness or perhaps his intention towards work. Leader-Member Exchange Theory It is a theory in which the leader is supposed to divide his group of workers into two parts, ingroups and outgroups, workers within "ingroups" would have better performance, less turnover and greater job satisfaction. Path-Goal Theory It states the basic job of leader which is to ensure and to monitor whether the followers are moving in a direction leading towards goal achievement or not, if not it is his job to assist them in reaching goals. Leader-Participation Model This theory is related to examining the amount of participative decision-making that is done by workers, it actually measures the tendency of each individual to take decisions in different situations. A No Change Scenario If the organization keeps on moving onto the same old path while not changing it according to the new demands, than it is not only risky but fully capable of making an organization bankrupt. "Change management's relationship with business continuity is not simply with managing interruptions, but also with enhancing an organization's capabilities for preventing and responding to potential crises."(Elliott, Herbane, Swarts 116) So above-mentioned sentence clearly states what can happen if change is not made with the passage of time, the risk associated with it include bankruptcy, Product position- it can reach maturity stage in a small time and can move forward for decline, loss of values, customer dissatisfaction, no availability of cash cow in the products, poor relationships with the suppliers and distributors are likely to appear as a consequence. The change is also depended on the type of business, at times the organizations find no need for change, it has been seen that tea manufacturers don't want the change in their product, as it can make customer feel negative about the product, perhaps in such case customers are use to of the same old taste and they are not willing to accept any change in the quality but organization can change its packaging technology or related, so these small things also depend on the type of business or service, but on the other hand if a car manufacturer would keep on producing old model look alike cars, the customers would be diverted toward the competitor's product, which is again an unhealthy sign, one can say that change is always required if not in one place than may be the other. A Change Scenario "In business strategy involves forming a path for the organization to follow that will lead to products or services that customer will want. This will usually mean some kind of new departure for the business, requiring the leader to implement various tactics or sub-strategies. These tactics are usually set out in the component parts of the business plan" (Hoddler, Stoughton 20). One can easily find the importance of above mentioned point, if the change would be acquired by an organization no matter in which department, it would definitely be helpful to give the product and organization some success, again it depends on the type of business where the change is required, the change can not only be beneficial for the organization but also for the customer, the only threat that can be received is from competitors, competitors would for sure make different attacks, but a strong organization can face them, in the recent years it has been seen that only those organizations have reached high ranking that kept on changing time after time, even service providing firms are successful by keep on changing may be the technology or change in service styles, the success is measured from the past records and hence it can also help the organization in making the future forecasts and setting future objectives, the change also encourages the things related to the organization such as suppliers, distributors and most of all it's employees, so the benefit is not only enjoyed by the organization but a changed organization also tends to change the society in which it is being operated. Conclusion The modern organizations are modernized because of the prevailing changes not only in the organization or competitors but in the society, the modern people require the organization, its products or services to be up to date so that they can fulfill the requirements of this modern globalize world, the modern businesses are not only modernizing themselves but these past few decades are considering the importance of Globalization which is perhaps the biggest change in the business world, keeping such important things in mind one should be acquiring the necessities not only in the form of change but also the related things, such as the leadership that plays an extremely important role in today's world, the intrapreneurial skills are the most important with in the leaders with out whom the organization would not be able to look forward for changes. "To develop successful innovation, a corporation should establish a conducive organizational climate. Traditional managers tend to adhere more strictly to establish hierarchical structures, to be less risk oriented, and to emphasize short terms results, all of which inhibit the creativity, flexibility, and risk required for new ventures. Organizations desiring an intrapreneurial climate need to encourage new ideas and experimental efforts, eliminating opportunity parameters, make resources available, promote a teamwork approach and voluntary intrapreneurship, and enlist top management's support." (Hisrich, M. Peters, D. Shepherd 54) So the organizations should keep on changing time after time without any gap, if the gap would increase than there is no way for organization to grow. Work Cited Randall J., "Managing Change, Changing Managers", New York: Routledge, 2004 Bartol, K.M., D. Martin, "Management", New York: McGraw Hill, 1998. Hoddler, Stoughton, "Six Weeks to Strategic Excellence", London: Praeger Publishers, 2003. Elliott D., B. Herbane, E. Swartz, "Business Continuity Management". London: Routledge, 2002. Hisrich R., M. Peters, D. Shepher, "Entrepreneurship", (n.p.): McGraw-Hill, 2005. Value Based Management. net, Transition Curve, Bibliography Kotler, P., "Marketing Management", (n.p.): Prentice-Hall, 1999. Robbins S., "Organizational Behavior", (n.p.): Prentice Hall, 2003 Bjerke B, "Business Leadership and Culture", Cheltenham, England: E. Elgan, 1999. Read More