Treatise on Organisational Change at Powerco - Essay Example

An Analysis of PowerCo’s Case History: A Treatise on Organisational Change Introduction A wide range of organisational changes has been happening inseveral organisations, both private and public, during the recent decade: downsizing and flattening corporations; forming project teams that are multifunctional; empowering or motivating employees; re-engineering the organisational process; enhancing the flexibility of the workforce (Chang 1994). There is a general agreement among management practitioners and leaders that these changes typify the emergence of a new flexible organisation. These people claim that flexibility is needed by every organisation (Gibson, Ivancevich, & Donnelly 1997). Conventional bureaucratic organisations significantly slow down an organisation’s capacity to respond to increasing competition, such as Australia’s PowerCo, an electric company. On the contrary, flexible organisations can respond to a broad array of changes in the competitive setting in a proper and timely manner. But there is an unanswered question about whether the said changes are interconnected or the accurate ways that they change current organisations (Mills 2003). The objective of this paper is to thoroughly explore the case study conducted by Lindsay Nelson on PowerCo. This case study analysis aims to provide possible and workable solutions to the change management problems of the company. Case Problem The electric company PowerCo is currently undergoing an extensive organisational change but the process is bringing problems to the internal and external operations of the company. The change management problems are divided into three: context, substance, and stewardship. The context problems of the company are the following: 1) several project teams are losing control and coordination because of multiple tasks given to them; 2) employees are unaware of the history and past crises that the company confronted hence employees are resistant to change; 3) employees distrust the management because it cannot answer their questions about the future direction of the company; 4) and, the company’s organisational culture remains stagnant. The substance problems of the company are the following: 1) negative outcomes of the ‘voluntary redundancy program’ and restructuring, such as loss of expertise and knowledge; 2) conflict between project teams and the business unit managers; 3) and, absence of connection between human resources management and change management; The stewardship problems of the company are the following: 1) lack of transformational leadership and CEOs are inappropriately appointed; 2) and, strong leadership becomes unattainable because of unanswered questions about the company’s possible disaggregation and privatisation. This paper will analyse the case study on the organisational change initiated by PowerCo in Australia, and then it will suggest other feasible change management strategies that the electric company could implement to enhance the operations of its change management. Change Management Strategies Organisational change involves the manner the transformation takes place, such as the rapidity, the communication system and the decision-making process, the chain of activities, the resistance confronted, and others. Exploring these aspects entails an emphasis on the process of transformation as such. Process thoughts may be separate from content, or they could be interactive (Martin 1992). A good deal of existing organisational theory deals with key questions of why change in organisations occurs and what effects change generates. As experts more and more employ capable research paradigms and well-thought out modelling approaches, improvement in dealing with these concerns will probably come promptly (Hendry 1996). Scholars will find basis to revisit not just their ideas of organisational change but also their fundamental knowledge of organisations. Managers will probably gain knowledge of some things that will aid them, not just in enhancing the effectiveness of their organisations but even in thwarting their failure (Cameron 1994). This section will discuss some of the organisational change theories and concepts that are relevant to the case of PowerCo. These theories and concepts will serve as guides to a more effective change management. Context Problem and Possible Solutions Why do PowerCo’s change attempts fail? This failure cannot be attributed to incompetent management of change. Most managers are enthusiastic to identify new ambitious objectives for their organisation and form organisational techniques to attain them. But very few are aware of the necessity for effective management of change and can effectively orient their organisation through the process of transformation. Analysts explain that, “Many strategic plans die because of lack of implementation. There is a high correlation between the failure to implement changes and the lack of conscious management of the transitional process” (Ferguson 1994: 86). The problem of PowerCo is that its managers concentrate more on leading than on effective change management. This is due to the fact that managing change is more people oriented and more difficult to accomplish. It entails an effective communication of strategies for change, sustaining high levels of performance and motivation, and enhancing commitment and awareness to new objectives all the way through the process of transformation. Managers of PowerCo obviously view these as relatively insignificant concerns during transition, but they are actually the most widespread obstacles to executing change effectively and should be regarded priorities of management. A number of scholars argued that, “In an effective change effort- particularly when a fundamental change is required—it is critical for top management to pay attention to the process of change and transition, in addition to leading the change itself” (Beer, Eisenstat, & Spector 1990: 158). PowerCo should implement Nixon’s five-point empowerment model (Poole & Van De Ven 2004) in order to create an organisational environment where people can work as a group and as individuals towards shared goals. The model involves: (1) creating a vision; (2) focusing on and taking actions only in areas where most effect is likely; (3) building stable relationships with co-workers; (4) enlarging networks; (5) and employing external and internal support teams (Poole & Van De Ven 2004). In order to build a collaboration of outcomes, people of PowerCo should be oriented to act as a team on trainings and tasks directly related with organisational issues impinging on them. Once the ability to team up on tasks has been gained, the same practice can be further implanted in PowerCo by offering workshops. PowerCo has to empower first its employees because the core context problem is the unmotivated and largely uninformed workforce. Cook sums up fundamental levels in the empowerment mechanism in an illustration that integrates the values, vision, training support, teamwork, process improvement, and management role as catalyst which are all investigated and observed at the end of the process (Jacques 1996). PowerCo needs a goal setting process with employee involvement in determining organisational and individual practices, goals, problem solving, and organisational strategy. With the framework of an organisational culture and management policy that is empowered, instruments and methods are required by employees and management if unused capability and individual entrepreneurship are to be developed. Unless the management of PowerCo understands and completely supports the argument that organisations should have high levels of communication, the company will remain stagnant. Quite frequently, management becomes aware of the necessity for communication by having to take action in response to the lack of it (Duck 1998). PowerCo’s internal communication should begin with useful proficiencies in communications, consisting of essential abilities in speaking, listening, inquiring and sharing feedback. These can be built with intensive assessment and practice. Possibly the most significant product from these abilities is communicating that you give importance to listening from others and their listening from you (Mills 2003). A foremost component to building valuable communications is each individual assuming responsibility to articulate when they do not understand a message or to propose when and how an individual could articulate more successfully (Colville 1994). The managers of PowerCo find it difficult to be honest and open to the employees, but for uniquely various reasons. Primarily, they plainly were unaware of several of the routes being decided without their knowledge. And also, they were not at ease talking about things that could happen since this was far unusual from the well-built deterministic viewpoints typical of their roles. Substance Problem and Potential Solutions Obviously, human resources management does not take place in a vacuum but rather takes place in a complicated and forceful context of factors within the organisational context. A significant development in the contemporary period has been for HR managers and personnel to implement a strategic model of their job and acknowledge the crucial links between HRM techniques and organisational policy (Poole & Van De Ven 2004). The belief that HR staff are only ‘paper pushers’ keeps on disappearing, to be substituted by the idea that they serve a major function in helping to realise organisational effectiveness and establishing the competitive advantage of the organisation (Poole & Van De Ven 2004). PowerCo’s HR policies are problematic. The company should adopt a new perception of HR employees as strategic colleagues working toward the strategic objectives of the organisation and should denote this as strategic human resources management (SHRM) (Mills 2003). The company should implement HR practices that are in line with its change goals. Effective HR practices can boost the competitive advantage of the company by forming both cost differentiation and management. In contemporary global context, sustaining a competitive advantage prioritises having dedicated and skilled personnel (Mills 2003). Premium services with a low cost are an outcome of dedicated personnel all persevering to provide the best services and produce the best products in a cost-effective way (Carter 1999). The HR function of PowerCo should concentrate its activities on means to assist the company realise corporate objectives such as emergent operations through selection and recruitment strategies, training and development, and making of preliminary and prospective job assignments. If the company will perceive the HR sphere as a real strategic associate, they will employ contribution from HR managers in their preliminary planning of corporate policy. HR inputs to a cost management technique concentrates on hiring and retaining members of staff who can work as effectively and creatively as possible. Conversely, more experienced and skilled employees could demand higher compensation packages; hence it may be possible to redesign jobs to necessitate minimal abilities and then to hire employees who can carry out the work tasks but who could not stay long with the company (Blackler 1993). PowerCo could control the cost of labour with this kind of strategy. Training could focus on efficient production techniques, and incentive systems could be grounded more on output quantity than on quality. One prevalent technique to lessening costs nowadays is to transfer production to nations where the cost of labour is lower than in the home country (Mills 2003). HR managers help in the effective implementation of a differentiation technique by recruiting and retaining members of staff who can carry out first-rate work or who can furnish exceptional customer service (Das 1998). Similarly, training and development of employees will probably concentrate on quality improvement, and incentives systems could be grounded on variables such as performance quality and customer satisfaction (Mills & Simmons 1995). As previously mentioned, well-designed policies deal with how the company will manage its essential purposeful tasks, such as operations, finance, marketing, and human resources management. Hence it is at this stage that strategy planning of human resources formally starts to develop (Hendry 1996). In the case of PowerCo, it is obviously crucial that an HR well-designed policy be directly incorporated and coordinated with the company’s operational and corporate strategies. Certainly, without such incorporation and synchronisation, the competitiveness of the company will obviously endure. As effective colleagues in assisting organisations in successfully realising their objectives, HR managers have to gain knowledge of the organisation’s policies, and afterwards they should guarantee that their own attempts are in line with and furnish support for those policies (Gibson et al. 1997). PowerCo’s managers should be dynamically involved in the planning of business or corporate policies as well as other operational strategies. Stewardship Problem and Possible Solutions Before the transformation process starts, there should be a clear and understandable vision of the transformed organisation. The management of the organisation, collaborating with others, should express the objectives of the change in a brief statement summing up what it is like to intermingle or even work together with the transformed organisation, as an employee, as a receiver of services, and as a governmental or non-profit associate (Poole & Van De Ven 2004). The change vision can be created in a variety of ways by different groups, comprising of the organisational leadership, or by policymakers (Clark 1995). Regardless of the manner the vision is created, the management of PowerCo should assume responsibility for orienting the path and transformation process for the company. PowerCo obviously needs a visionary form of leadership. The moment leadership has formulated the direction of transformation, it has to explore widely throughout the organisation and take into account the several layers of transformation that will take place as an outcome of the course of action (Chang 1994). The most dynamic strategy direction for the company is insignificant at the client level and line personnel without strategic decision and leadership to foster the transformation at all levels (Carter 1999). Concrete and actual transformation takes place at the top, in between and at the bottom, and it is the decision of the leadership to take into account each of those layers (Chang 1994). Is there a story for what PowerCo is attempting to become? If the company realises its objectives for transformation, how will the client comment about their experience of the company? What will a public member remark? What will personnel claim? What features of the company will be impacted by change? All these questions should be dealt with by PowerCo in order to boost their change process. The moment the leadership explains the company’s objectives for change, the subsequent action is sharing or communication the vision. Engaging personnel in the creation of the vision result in greater dedication from and more successful communication with those personnel (Mills 2003). Open and honest communication is a crucial component to realising successful and enduring transformation, and the organisational management should form openness and regular communication (Mills 2003). The more understandable a leader expresses the objectives of change in an organisation, the more useful employees, clients, policymakers, and the community can be. The moment they become aware of what leadership aims to achieve, they can help in realising those goals. The manner a goal or an insight is conveyed can be as significant as the insight or goal itself (Bate 1994). People will make assumptions from the manner the message is conveyed as well as the message’s content. For instance, if a leader personally expresses a suggestion to the organisation, the communication has more effect and significance than if it is transmitted to rank-and-file employees through mediators. If a leader organises a focus team of personnel to talk about a concern, the significance of the issue is intensified, plainly by the fact that management bothered to convene a group to discuss it. Leadership should also modify communication techniques to their target groups (Bate 1994). Leaders have to consider their target audience beforehand, take into account how they receive message or information, and strategically plan about how to reach them easily (Bate 1994). Communication should take place regularly throughout the organisation. Top management of PowerCo has to pay close attention to the combined effect of apparently insignificant decisions during the process of transformation. For instance, if leadership establishes that those members of staff who are dynamically involved and collaborate with the process of change will be rewarded, that policy should be reliable throughout the company, even in apparently insignificant decisions. One step, in one component of the company, such as the career advancement of a rank-and-file employee who is still performing work tasks the traditional way might not appear like it may initiate the process of change. Nevertheless, if it takes place many times in various sections of the company, these separate unconnected decisions can jointly communicate a message that weakens the process of change. Trust and confidence in the vision and leadership of the company develops through knowledge and understanding of the manner decisions is made. The process and decision by which they are achieved should be clear to the employees. Fine leaders aim for inclusive contribution into the decision-making process and persuade consideration of various points of view (Abrahamson 1996). Furthermore, successful leaders also guarantee that decisions advocate the determined values, vision and course of action of the company. This necessitates the leader to keep in communication with the decision making at several stages in the company to guarantee that the company fulfils its promises (Abrahamson 1996). The formulation of strategies advances the vision from an idea into implementation. While policies or strategies should be inclusive enough to include the work of numerous sections of the organisation, they should also be particular enough that goals, work plans, and outcome can be built to accomplish the strategies (Poole & Van De Ven 2004). Leaders can employ several mechanisms to formulate strategies (Carter 1999). Instruments for formulating strategies of PowerCo should harmonise two concerns: inclusive involvement in the decision making process and formation of the most inventive strategies instilled with paramount practice awareness. The virtual significance of these two concerns in the company’s transformation process will steer the array of instrument for strategy formulation. Conclusion When involving the broadest array of external and internal partners in strategy formulation is important, a company-wide development discussion can be the paramount instrument. PowerCo should implement this form of discussion which will help the participants gain knowledge of the strategic vision. Discussion methods frequently lead to maximum involvement and endorsement of the strategies. Discussion participants must be given opportunities to become aware of paramount practices and enhance their thinking so as to form an innovative new path for the company. Vertical communication can also form the company’s strategies. This technique presents opportunities for contribution from different levels and standpoints in a more regulated mechanism. It also presents the opportunity for alternative standpoints to weigh more profoundly in the process. In the discussion framework, marginal claims may not be heard. The analysis indicates that change begins with failures to adjust and that transformation never begins because it never ends. The findings of this analysis are significant for a number of reasons. The findings have strong suggestions for prospective research on organisational change and organisational failure. The analysis indicates significant history reliance in organisational failure incidences. Organisations that take for granted details on the history of organisational changes, like PowerCo will present an incomplete and possibly inaccurate vision of organisations. The suggestions for studies on organisational change are just as significant. There is also an obvious pattern of history reliance in PowerCo’s change rates. The company concentrates on the external environment and ignores the influences of organisational experience with change. The findings also emphasise the significance of investigating the impacts of the change process and not merely its content. 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