Toward a Behavioral Theory of Charismatic Leadership in Organizational Settings - Essay Example

Executive Summary CEA has been passing through a changing business environment that has generated several variables that need immediate attention so as to minimize risks .A change management strategy has been in place at CEA and it has the central focus on costs reduction and improving the customers’ transactional experience with the CEA. This strategy has been knitted well with the organization structure of the CEA; however elements of employee empowerment, employee motivation and knowledge management have not been explicitly stated in such a strategy. This paper argues for inculcating a new change management organizational culture that has, at its core, the process robust knowledge management which ensures a healthy employees’ participation through the concepts of employee empowerment and employee motivation within the ambit of a transformational approach to change management. ___________ ____________ ____ September 2007 Contemporary issues in change management - Major Assignment The very first important step toward creating a change management system within any organization is the thorough assessment of the organization culture, to assess the level of change management maturity level. Such a change process will transform itself into competitive advantage only when it is properly captured, inculcated and shared and of these the very important step being the capturing of the change management system. Capturing of such a system as a dynamic snapshot -particularly in high value selling environments like the one prevailing in the Corporate Express Australia Ltd (the organization under reference) and which is at the centre of this research is highly problematic as the nature of tasks and activities within these organization are very unpredictable, complex and dynamic, dynamic in the sense because of constant, recurrent and reorganization of the organizational targets and objectives to match changing environment. Changing environment warrants capturing of knowledge and knowledge management within the organization. Thus one should have an organizational culture that leads to the maximum capture of the environmental and business specific knowledge; ensures its total assimilation and utilizes it in making time specific effective decisions that maximize the value for the organization in its value chain-which can be interpreted in financial terminology in terms of profits and turnover on the one hand and improved or enhanced employees’ productivity and satisfaction, on the other hand. Thus organizational culture and knowledge management systems can be used as tools to target above financial and employees’ specific variables under any specific change management strategy –which is seeking success primarily in terms of ensuring healthy survival of the organization on long term basis. Studies have shown that organization culture is one single most important obstacle toward achieving knowledge management system as was observed by the Ernst & Young study reported in CIO which noted, “fifty-six percent of executives identify changing people’s behaviors as the greatest single obstacle to knowledge management initiatives.” Corporate Express Australia Ltd and Change Management Corporate Express Australia Ltd (CEA) is one of Australia and New Zealand’s leading single source suppliers of in-direct goods and services to the office. Within its structure, It has several businesses consisting of IT solutions, print services, promotional marketing, business furniture, facilities supplies and office essentials. IT Solutions division of which I am part of is one of the fastest growing suppliers of IT Products and Professional Services in Australia. The company’s vision has been to ‘lower its customer’s total costs of doing business, by providing a seamless supply chain from the source to the customer’ (Corporate Express Web Site). Pendlebury et al highlight that “change is always driven to varying degrees by a number of external and internal factors”. It can be said that the predominant driving force within CEA is the management’s vision. (Pendlebury, 1998, pp8). CEA operates in a highly competitive environment and to succeed it had to excel in customer’s service expectation. As Pendlebury et al point out, “ consumers are becoming increasingly demanding and expect the products they buy to be of higher and higher quality, which can only be achieved through significant changes in he businesses that produce them” (Pendlebury, 1998, pp8). To drive customer service focus CEA have implemented over the last few years several business improvement programs which have empowered and encouraged staff to make many of our customers satisfied in their dealings with CEA. Three years ago, CEA Senior Management established what they called “The Continuous Improvement Group (CIG); a team of Middle Managers (representing each division) who work in the “coal face” of CEA. To effectively manage change it was important for Company directors to recognize the realities of self interest and cultivate support from individuals and groups (Beer, 1988, pp.4) The team was therefore developed not only to pro-actively review customer and staff feedback but also look for ways to improve performance. All initiatives presented to Senior Management Team have been implemented with their full support. Some of the current business improvement processes have included: • Staff Surveys –. The survey has allowed employees to advise CIG on how to make Corporate Express a better place to work. Staff morale and the quality of work have improved as a result of these surveys. • Management Based Objectives (MBO’s) – Certain high performing staff within Corporate Express are offered a performance based incentive by CIG . As well as being a recognition program, it emphasizes to high achievers the importance of his or her particular role within Corporate Express. The MBO have resulted in more efficient and effective job performance which ultimately gets passed on to the customers. • Weekly Reporting – On a Weekly basis, CIG reviews their divisions’ performance reports from the previous week. All discrepancies are reviewed and acted upon. This can include reviewing processes, arranging training for a staff member(s) or heightening awareness within a division of Corporate Express. This initiative has ensured shortcomings have been rectified in a short period of time and has allowed Management to monitor the performance of their teams. • Pro-Active Account Management – CIG have encouraged Account Managers to understand customers changing needs and ensure customers are aware of any opportunities to reduce costs and the availability of new products and services available from CEA. This scheme has resulted in stronger relationships between customer and account manager. CEA’s mission has been to provide its customers with flexible and easy ordering solutions aimed at lowering the costs of doing business and improving business efficiency. CEA has prided itself on delivering this strategic goal by looking to remove customers hidden costs’, such as inefficient manual paper-based processes, overhead and administration costs, holding of buffer inventory, account reconciliation costs, managing multiple vendors, distribution of products and contract leakage. The triggers and challenges however which have faced CEA in recent years is continuously striving to increase our value-added services to our customers whilst at the same time streamlining our own operations to meet customer expectation. In order to sustain a competitive advantage over its rivals, however, CEA has had to transform its business model from a decentralized geographic based operating structure to a centralized structure aligned by function. As Burnes points out, investigating change should occur in organizations for the following reasons: “ The company’s vision/strategy highlights the need for change or improved performance; current performance or operation indicates that severe problems or concerns exist; suggestions or opportunities arise (either from the area concerned or elsewhere) that potentially offer significant benefits to the organization” (2004, pp 468). The new centralized business model has facilitated greater scale capacity and capability, allowing growth without a proportional increase in cost. Project initiatives have included: - the consolidation of the purchasing function across office product, facility supplies, furniture and IT lines of business eliminating duplication of effort and reducing cost. - Consolidation of customer contract expectation team across all lines of business - Realignment of sales teams by customer size and segment to enhance service effectiveness. With these changes, CEA have removed a layer of general management across its operating business. New State Management Team Structure have been introduced that is more focused on customer retention and new business development with all operations and administration functions being managed centrally via Sydney head office. The above stated prime organizational objective has been concretized by Michael Hammer as the output after application of all of the resources gained after a process of knowledge capture and management. Any organization has the prime objective of maximizing value added for their stakeholders versus competition. Observe what Michael Hammer says in respect of the most important stakeholder group of any organization, "MVA (More Value-Added) means that you give the customer more, perhaps far more, than you ever have before. It goes beyond simplifying your customers interactions with you to delivering solutions to your customers problems, of which your products and services in their native forms are but small pieces... You can visualize the principle of MVA as a ladder with your product at the bottom and the solution to your customers problems at the top. The more help you provide your customers to fill that gap, the more value you add to them, which, of course, differentiates you from your competitors who are still scrambling around at the bottom of the ladder. Also, it is to your advantage to control as much of the ladder as you can - customers will be less likely to abandon you in favor of someone else, lower down the ladder, who offers less value. At the same time, your opportunity for margin and profit increase"(Hammer, 2001).MVA is the enhancement in product attributes as is being discussed above.MVA maximization and solution to customer problems cannot come about if an organization fails to keep tab on customer needs, competitive moves and the overall market environments. Unless an organization keeps tab on the environment and ensures that its knowledge capture and management or learning is more than environmental change it can never maximize MVA.Competition which is more adept at environmental scan and learning would walk away with customers and stakeholders. Ideally the organization should not only reckon such changes but also make plans to deal with them so that their solutions remain most current and attractive. A strategic approach of doing this becomes important. Strategically Managed Work Teams have been developed to give all areas the ability to develop and implement the tools needed to achieve the goals of the company. Three of the most successful groups are the BIS (business information systems) steering committee, E Commerce committee, and the Customer Service committee. The advantage to CEA customers is that specific requests to any particular business unit have to be acted upon quickly and effectively. Final Blue print of change management at CEA-Concluding Remarks Despite the above specific customers’ orientation CEA’s IT Solutions lost major clients and its Business Division of Corporate Express is also not very sure if it can compete successfully in the large state government market. In addition in 2005 it lost one of its key personnel who had quality contacts-presumably in this high risk and high stake government markets. Even though the overall organizational focus, as narrated above, has been on cost reduction and improving customers’ transactional experience with the company; the IT business solutions division is not recognizing the fact that a major part of its offerings is in terms of a service that is skilled based. Here there is a substantial focus on the human factor-as much on its clients as much on its employees. Employee empowerment, motivation and proper leadership skills are necessary for its project specific environments. While CEA seems to be attempting an essentially bottoms up model of change management-the employee focus is as much missing as the focus on the need to constantly scan the environment for knowledge. With employee empowerment, motivation and proper leadership the change management system would move towards a transformational style of change management. . In fact in strategic management literature there is one preferred approach to strategy making. This approach is nothing short of a description of facilitating culture. It is called the transformational approach and it comprises in the creation and inspirational articulation of a compelling vision and a clear set of organizational goals or missions, which give meaning to all sets of activities throughout an organization. A substantial portion of a transformational strategy maker’s emphasis may be on transcending self-interests in an ideological framework (Chaffee, 1985; Mintzberg & Waters, 1985) to get employees to ingrain and pursue organizational goals (Bass, 1990). The use of symbols and metaphors also may be central to this process (Conger & Kanungo, 1988). The chief activity of top management in the transformational process is to motivate and inspire organizational members (Nonaka, 1988) toward organizational goal attainment. Their main attention is on bringing workers together for the common purposes at hand (Grandori, 1984; Mintzberg, 1987) and developing and maintaining continued efforts toward the shared values (Bourgeois & Brodwin, 1984) and emotionally appealing corporate vision. This vision and culture would be the one which could be reported as part of corporate governance by any organization. This corporate vision and culture carries an important ingredient. It is comprised of a system that leads to regular and routine learning about environmental changes-whatever may be heir magnitude. Such a system becomes essential as such changes warrant a revision of organizational objectives and tactics and sometimes may even result in realignment of the organizational vision and culture. As Vaill(1997) says that ,” One is looking at a human being facing in real time a condition that is problematic for the organizational objectives the person is pursuing. The objectives themselves may be changing, and the problematic condition may be changing as well. The persons intent is to understand this evolving problem well enough so that human, financial, and physical resources - themselves undergoing various kinds of unpredictable and barely controllable change - can be organized and mobilized (that is, led) to address the problem; all this is going on day after day, year after year, in connection with everything the person gets involved in. Of course many different attitudes and abilities come into play in this process. But learning abilities pervade the process. They are of primary importance, because on them depend the persons ability to adapt whatever other behavioral skills he or she possesses to the evolving situation. Managerial leadership in this view is never really learned; it is ongoing learning”. This transformational approach is quite popular. It, in fact, is found under differing names in works of various authors. For instance: the transformational approach rings similarity in Mintzberg and Waters’ (1985) ideological approach to strategy making, Bourgeois and Brodwin’s (1984) cultural approach, Grandori’s (1984) cybernetic approach, Chaffee’s (1985) interpretive approach, Mintzberg’s (1987) perspective approach, Nonaka’s (1988) compressive approach, and Hart’s (1992) symbolic approach to strategy making. This transformational approach would attain the targets of employee empowerment and motivation apart from developing centers of excellence with core leadership in each project team. For knowledge management system the Business solutions division and the CEA, as a whole, has to adopt a more holistic and comprehensive model. This knowledge focus seems to subdued in the current emphasis on cost reduction without realizing the fact that knowledge capture and assimilation through the above transformational approach would contribute to further cost reduction and margin skimming versus the competition. CEA and the division can target This brings us to the conceptual, strategic model of knowledge capture that is attenuated to the above prime organizational objective and which the CEA can adopt to capture and manage knowledge. Stephen Haines Centre for Strategic Management has built a new strategic planning system based on systems thinking and calls it the 21st Century Yearly Strategic Management System and Cycle. This system moves beyond planning into implementation. It includes a Plan-to Plan phase and a Plan-to-Implement phase. The steps include team building and leadership skill building as part of the planning. It also includes a parallel process whereby all key stakeholders are involved based on the premise that People support what they help create. This process starts with a Futuristic Environmental Scan and defines the ideal vision in terms of mission, values and end outcomes that the organization wishes to set for itself. Only after the statement of such Ideal Future a Current State assessment based on SWOT(Strengths, Weaknesses, Opportunities and Threats) is taken up to identify the gaps and make strategies to close the gap(s).As a result of their clients adopting this model it was found that clients began developing competitive edge and the organization was much clearer on what their competitive "positioning" in market place was and found themselves moving positively in that direction, to the delight of their customers(Haines,2004).Thus this process leans directly into the process of competitive strategy making as it includes environmental scan both-present and future and enables movement in the desired direction. However this systems parallel process is a very critical aspect and strategic management literature has a common view that good strategies grow out of ideas that have been floating around the firm, and initiatives that have been taken by all sorts of people in the firm. This resource must be drawn upon as frequently as required even in competitive strategy making. This strategic process also makes it clear that futuristic environmental scan in present day and frequent SWOT implies that any organization is assessing its stock of learning. Barclay & Muray(1997) define Knowledge Management as , “a business activity with two primary aspects: Treating the knowledge component of business activities as an explicit concern of business reflected in strategy, policy, and practice at all levels of the organization. Making a direct connection between an organization’s intellectual assets — both explicit [recorded] and tacit [personal know-how] — and positive business results. Dynamic environment can make this process essential for survival. CEA’s IT business solution division also admits n its internal audit of operations that it needs to equip its employees (sales force) with more knowledge. Several anthropological studies have ventured in the arena of researching the various aspects of cultural dimensions. One of these landmark studies, compiled by Geert Hofstede,has served the purpose of providing foundation for a lot of other research efforts.Hofstede took up this study in the 1970s and 80s and it involved a huge survey at IBM that “dealt mainly with the employees’ personal values related to work situation…” .This study encompassed 72 national subsidiaries of IBM, 38 occupations/trades, 20 languages, and an impressive 116,000 people. (Hofstede, 1991).Analyzing the data obtained from this survey Hofstede gave a five fold classification of cultural dimensions. Other researchers extended the analysis of cultural dimensions by several notches. For instance,Hoft while describing cultural dimensions, presents a useful categorization of cultural dimensions in two classes viz. objective and subjective. Objective categories are those that are “easy-to research cultural differences like political and economic contexts, text directions in writing systems, and differences in the way that you format the time of day, dates, and numbers.” Subjective categories, on the other hand describe dimensional information “…like value systems, behavioral systems, and intellectual systems…”(Hoft,1996),the above transformational management emphasis and the new model of knowledge capture would root in both subjective and objective aspects of organizational culture at CEA which would negotiate change management seamlessly. References Beer, M, Leading Change, Harvard Business School, pp. 4, 1988. Corporate Express Web Site (www.ce.com.au) accessed 8th July 07. Pendlebury J, Grouard B, Meston F, “The Ten keys to successful change management” pp.6-11, Wiley, 1998. Burnes, B. (2004) Managing Change, Prentice Hall, Essex, England. Hammer, Michael.2001. 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