Managing Change in Organizations - Coursework Example

?Managing Change in Organizations “Everybody has accepted by now that change is unavoidable. But that still implies that change is like death and taxes — it should be postponed as long as possible and no change would be vastly preferable. But in a period of upheaval, such as the one we are living in, change is the norm”. Peter Drucker Management Challenges for the 21st Century (1999) Change in all spheres of our lives, is inevitable and is a powerful force, especially with regard to the corporate world. It may threaten to disrupt the harmony or balance of an organization’s position in an industry and completely transform the dynamics of power relations in terms of market share. Hence managing change is of crucial significance for the management, in order to successfully retain their competitive positioning in the industry. The concept of “Change Management” has, in a growing range of forms, been one of the most well-known topics faced by the managers since the past several decades. Factors such as long-term natural calamities, staggering statistics concerning employment and labor situations, product line expansion or the adoption and implementation of new technologies, have all been overriding forces influencing the management’s decision to adapt to the changing external environment in order to be able to stay afloat in the intensifying competitive environment in the market. Furthermore, efforts targeted at solely pursuing profit motives are relatively of lesser significance than retaining one’s competitive position in the industry and this requires implementing change from time to time. Firms which fail to change promptly in response to the changes taking place in the external environment often fail to survive and are eventually thrown out of the competition. Hence the battle for survival has become tougher and more intense, and change management is one of the factors that the firms seek as an effective tool of survival in the industry. Addressing the various issues involved in implementation of change, often raises serious concerns since this new awareness is not only extremely intricate but at the same time, it demands constant attention and care from the managers and leaders to foresee and instigate remarkable changes and for this purpose it requires efficient management team which can not only successfully implement but maintain change across all levels of an organization. The critical issue of concern is not the actual implementation of change but the manner in which to avoid the additional distractions that confront the management in the process of adopting change management. The management must take adequate precautions to avoid taking hasty decisions particularly in the face of intense competition since in such a case, any decision based on false analyses may ultimately lead the firm to suffer immense loss – both monetary as well as loss of faith in the company’s product and / brand name. The array of choice available at the disposal of the management may be many but the decision must be made based on evidence based facts rather than research based data. There are innumerable cases available for study of firms which have successfully implemented change management however the list of firms who have failed to implement change management on account of inefficient data / information based on inaccurate and superficial analyses is also quite long. Firms implement change based on external analyses however such an analyses is more often than not driven by an urgent need on the part of the firms to counter the rival’s strategic measures and outdo them in the market. Decisions taken on account of such cases often causes more damage than profit to the firms concerned. Lee Bolman and Terry Deal contend that managers benefit from being able to evaluate organizations from the perspectives of four different "frames" or "lenses" each of which offers a unique perspective on the manner in which organizations function. In the absence of such an ability of using multiple frames, the managers may become trapped in their one favored way of perceiving the world. According to Bolman and Deal: "Organizations are filled with people who have their own interpretations of what is and what should be happening. Each version contains a glimmer of truth, but each is a product of the prejudices and blind spots of its maker". This paper discusses the various impacts of change management, in a company for which I worked and presents observations based on personal experiences and in the process, learn and understand the process of change management. Briefly describe a significant organizational change that has occurred within the last 5 years. There are various approaches to change such as planned change; Emergent Change; Individual, group or organization wide change; etc. Planned change refers to a change which is initiated on the basis of a carefully planned approach by the management, as opposed to a change which the management is forced to bring about owing to the pressure caused by changes in the external organizational environment. To quote from my personal experience, the organization for which I worked, made several changes in its top management starting with a major change – that of expanding the product line. This was a planned change since the management decided to change (i.e. expand) it’s existing product line and add a new product in order to gain more market share and enhance its competitive standing in the industry. As a result, this lead to various organization-wide changes which are listed below: A new project team was created which were delegated the task of working on the new product, leading to a transfer of resources from the existing team to the new team Shortly after assembling the new project team, the company was sold to (acquired by) a huge American multinational company leading to significant changes in the top level management There were several changes made in the teams, with addition of new team members and removing / transferring the existing members to different locations or on different assignments The company I worked for was based in Holland, and was acquired by an American multinational, which set up its centers in various international locations across the globe such as India, Costa Rica and Canada. Such a move brought about significant changes in the organizational culture, and created certain difficulty to adjust to the various time zones. Since the company was acquired by an American multinational, the major decision making was done by managers based in the U.S. This lead to a change in the communication channels, which changed from informal and personal to formal and impersonal. Most of the communication is now done, strictly via emails and / or phone conferencing. Salaries of the staff were freezed, to accommodate the additional workforce, and in order to further lower the cost, all the perks previously available for the employees such as refreshments, outdoor activities, etc were cut down. Companies today are operating in a highly challenging and competitive global environment, which is evident from the foreign investments in off-shore projects. Due to the increased competition, the need for a highly skilled top management has increased simultaneously. The top management today, is keen to identify profitable expansion opportunities which fall beyond the purview of their local and national boundaries and venture into previously unknown territories such as the developing countries in South and Central Asia, Europe and Latin America. Discuss the main internal and external drivers that made the change necessary and outline the key management objectives in making the change. There are various drivers for change which force organizations to bring about significant transformations in their usual manner of working. These include: weak business performance, poor customer satisfaction, high rate of of project failure, lack of innovation, rapid technology advances, new business models, outsourcing, mergers and acquisitions, collaborative partnership models, greater agility in customer responsiveness etc among many others. Figure 1: Drivers for change management: The key factors which led to changes in the company I worked for include: sustaining competitive positioning in the highly competitive global environment; global expansion i.e. transcending beyond boundaries and venture into different geographical locations in order to expand its customer base, market share and lower its costs of production; and to seek advantage of the vast knowledge bank by hiring highly talented workforce from the large pool of human resources available to companies in international market. Mergers and acquisitions is a common norm these days, especially with regard to large multinational companies operating in the highly competitive I.T. environment. Developing countries such as India and China boast of a huge pool of human resources which are talented and highly skilled, while other North American countries such as Canada have efficient managers as well as impressive and state of the art infrastructure to support such international projects. Furthermore, the need to venture beyond their local or national markets has risen over the years, primarily fuelled by the development of technology which has made access to foreign markets faster, easier and cheaper. It is now possible for companies to operate its business from America and interact with their branch offices in Holland, India or Costa Rica via phone and video conferencing. The decision making too is done at the company head quarters and communicated to teams operating in branch offices through emails. The key objective of the management to bring about such a change includes: To expand its existing customer base and increase its revenue and market share To exploit the global pool of resources available in the form of human resources, and cheap labor To increase their speed of product delivery. This is achieved easily since there are different teams working across the globe in different time zones. Hence at any given point of time, the company has employees working round the clock, thus leading to increased productivity, which translates into increased sales and hence increased revenues. Drawing upon material from the online module and relevant wider reading, demonstrate how managers planned the actions required to achieve their objectives. In order to accomplish their goals and objectives discussed in the previous section of this paper, the managers brought about several changes in their policies and strategies which are listed below: In order to achieve their objective of expanding their customer base and market share, the management ventured into international markets and set up their branches in international locations including India, Costa Rica and Canada apart from the existing location – Holland. By setting up of branches in these countries, the management was able to achieve their objective of exploiting the huge pool of talent available in the form of highly skilled employees, and an effective infrastructure. This helped them in reducing their costs of production and improve their service and product quality, thus leading to higher customer satisfaction. With a team of talented and highly skilled employees working in different time zones and round the clock; the management (division of labor) were able to retain their competitive positioning in the industry. The organization also made significant changes in the top management in order to share knowledge; gain more expertise; exploit the resources and knowledge of talented and experienced teams overseas and tackle problems in a faster and easier way. The employees at Holland were encouraged by the top management to extend their support to teams based in Costa Rica and India. For example Software engineers (SE) in Holland could help SE in Costa Rica in bottle neck technical issues. Also, the experience testers in Holland were assigned additional duties - that of guiding the testers in India and help them to test the functionality appropriately. Since prior to the acquisition, a new project was being developed and new teams were added post the acquisition, the experienced workers from Holland were sent to newly set up branches in India and Costa Rica to train and familiarize the workers with the project by sharing their knowledge and experiences with them. Such strategies and steps taken by the management were aimed at easing the process of change and helping the employees – both existing and new, to adapt and adjust to the changes being made. The exchange of employees and interaction were aimed at encouraging knowledge sharing, and developing a more talented workforce. Demonstrate what additional techniques might have been used. The organization wide changes implemented post the acquisition led to major grievances among the employees. The existing teams were dismantled by adding new members to the group and transferring the existing members to other departments / locations. This changed the working dynamics drastically. In order to avoid such a setback and dissatisfaction among the employees, the management should have retained the existing teams and create new teams for the new members. Furthermore, there was a drastic change in the time zones of the employees, who now had to put in more hours to adjust to the new working schedule. Also, they had to adapt to the new channels of communication, where the informal and face to face communication was replaced by more formal modes such as emails or phone conferencing. The employees were greatly disappointed due to such a move, as they felt that the top management is now highly inaccessible to them. In order to eliminate such dissatisfaction, the management should have intervened and set up a toll free helpline to be used exclusively by the employees which would enable them to communicate with their immediate superiors. This would increase employee trust in the management and generate a sense of belonging within the organization. Furthermore, technology should have been used to its optimum capacity to help employees bond and create informal ties with each other, through blogs and community forums. Evaluate how effectively the process of implementing the change was managed. There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old conditions and lukewarm defenders in those who may do well under the new. Machiavelli Change is inevitable and almost compulsory for the survival of organizations in present times. No organization can avoid changes in its operations for a sustained period of time, since it will be forced by the external market forces to implement changes, in order to sustain its competitive positioning in the industry. Hence, management must be prepared to deal with the likely repercussions in its internal environment as a result of such changes. The Holland based company (i.e. the company I worked for) was acquired by an American multinational which was followed by a series of changes within the organizations. The top management i.e. the decision makers based in U.S. quickly decided to expand its business and ventured into international markets apart from its existing location in Holland. As a result, and as a part of its organizational strategy, the company went on to set up branches in Canada, India and Costa Rica. The organization thus, was highly successful in achieving its desired objective – that of expanding its operations by venturing into international markets. Its other objective – that of lowering the costs of production was also successfully achieved by the company, as the labor / human resource in the form of skilled workforce is relatively cheaper in developing countries such as India. The company was in the process of developing a new product, as a move to expand its existing product line. Hence, post acquisition new team members from across various locations were added to the existing teams while several other employees were laid off or dismissed. There were severe cut downs on perks offered to the employees such as the refreshments and free lunch in the company cafeteria was completely cut off, their salaries were freezed, and their job hours were increased. Also, they were made to work from office, and the liberty to work from home was taken away, as a move to increase employee productivity. However, such changes did cause several negative repercussions. Hence, although the organization was successful in bringing about the desired change within the company, and achieve their desired goals; the employees were highly dissatisfied with such changes. This was mainly due to the fact that the changes within the organizations took away their liberties, of freely communicating with their seniors; interacting with their fellow employees; and the healthy organizational environment was lost and gave way to a wider multicultural organization. The management hardly put in any efforts to familiarize or train the employees to adapt to such changes. This was a major failure on the part of the company, since the human resource is one of the critical tools of any organizations and dissatisfied group of employees is highly likely to cause a severe downturn in their productivity. Employee satisfaction and loyalty are directly related to their work performance. This is evident from the fact that several employees chose to leave the company as they found it difficult to adapt to such organization wide changes. Thus, although the corporate objectives of the organization were successfully achieved, the dissatisfaction among the company’s workforce proved to be a severe setback. Include an assessment of how appropriately was any resistance to change managed Directing firms towards the path of accomplishing transformational and organization wide change is a overwhelming task. Some of such significant transformations include downsizing, mergers, new product launch, modifying the existing product range or adoption of new technology. Such changes characteristically engender workforce ambiguity, apprehension, and conflict, which tend to diminish the overall self-esteem, focus, and organizational performance. Organizations often report high rates of failure in procuring required information and subsequently in implementing organization wide transformation based on the information collected, even after spending substantial amount of resources on change management measures. In order to avoid such failure, the top management encouraged active exchange of communication, since lack of communication is often held responsible for failures. The top management sent the highly experienced team members from its existing Holland branch to the newly set up branches in India and Costa Rica in a bid to help the new employees learn the nuances of the trade. Furthermore, various formal and informal channels of communication were setup in order to help the employees to interact with each other and avoid blocking issues. Phone conferences and meetings were conducted on a weekly basis, with various teams comprising of software engineers, business analysts, testers, product managers, project managers etc. wherein a wide range of issues bothering the team members were discussed and solutions were provided to overcome their obstacles and problems faced by them. Furthermore, in order to better track the work progress of the CR team, they were asked to provide an overview of the work done, the blocking issues, work still to be done, etc, these must be done on a daily basis. Such a step helped the teams in Holland to be aware of the bottle necks faced by their CR teams and keep themselves updated regarding the status of work (i.e. progress regarding a given project). Such strategy proved to be highly successful in improving the quality of job performance and speed up the product development process. The teams were able to closely monitor their work more effectively and time wasted on waiting till the end of delivery date was saved. Over and above this, a dedicated team of experienced engineers were specially placed to provide 50% of their time to offer support to the CR teams. This helped in avoiding wastage of time, block ups and ensured speedier work. Furthermore, regular and periodic meetings were held, which were chaired by top company executives (such as the CEO) to explain and discuss organizational changes with the employees. Regular communication with the stakeholders via white papers were communicated at regular intervals. The employees, were encouraged to communicate their thoughts and views on the changes implemented in the organization by way of questionnaires, and the feedback received by them were taken into consideration by the top management. In order to help the employees deal with the changes made, regular brain storming sessions were conducted to discuss the improvements made, along with a range of issues concerning the employees. In order to ensure continual learning and progress of the employees, the top management has set aside a fixed budget whereby the employees are provided regular training and development and assessment is made to ascertain the impact and effectiveness of such training on the employees. Assess to what extent the change was successful in meeting its objectives. Identify and justify the need for any further related changes. The company which I worked for, was highly successful in bringing about the desired changes; and achieves its corporate objectives. However, the said changes did set off a series of negative repercussions, mainly related to employee satisfaction. Organizations implementing significant changes must resort to participative management where the employees are encouraged to participate in the day to day functioning of the organization. They are also made a part of the decision making process which helps in eliminating / reducing their fear or anticipation, if any, with regard to the impending transformation. Participative management entails encouraging the employees by involving them in matters related to the organization by way of suggestions or opinions. The feedback thus received by the management could then be thoroughly analyzed and decision can be taken accordingly. Such a move could have helped in eliminating the fear and dissatisfaction which is currently faced by employees in my organization. The employees in my company were encouraged to provide their feedback by way of questionnaires, regarding the changes taking place in the organization. However, such feedback was acquired after the changes. Although the changes were planned the employees were not trained in advance and prior to the changes. Although support was provided post the changes, many employees found it extremely difficult to cope with it and had to leave the organization due to increased pressure. The employees are an integral part of an organization and the main tool used to achieve the overall company objective of profit maximization. Loss of morale and confidence of the employees further leads to lower participation, and hence lower productivity. The employees may hesitate to share their ideas and / or seek further development on account of loss of interest in the company's activities. Although employees and organizations work towards the achievement of a common goal, i.e. profit maximization they are individuals, at the end of the day, and do have their personal goals such as expectations of increased reward; personal career development; and promotion. However, it is the job of the management to ensure that the goals of the company as well as those of the employees are aligned effectively to achieve greater employee satisfaction. This in turn could be exploited to increase productivity. The company failed to take their employees points of view into consideration, and were mainly left out of the decision making process. Furthermore, it is also imperative that organizations aiming for such huge transformations must groom and familiarize their staff with the said process and train them accordingly to help them adapt to the impending changes. No such training was given to the staff, which made it all the more difficult for them to cope with such changes. This was by far, the greatest failure on the part of the company’s management, which resulted in the loss of loyal employees, who were forced to switch jobs on account of their inability to cope with the changes. Thus although changes are imperative and almost unavoidable, the company must take into consideration the negative repercussions likely to be caused, and take active steps to avoid the same. References: Bolman, L. G., Deal, T. E., (2003). Reframing Organizations: Artistry, Choice and Leadership, John Wiley and Sons, Pp. 372 - 379 Deal, T. and Kennedy, A. (2000). Corporate Cultures: The Rites and Rituals of Corporate Life (second edition). Cambridge, MA: Perseus Publishing. Galbraith, J. (2001). Designing Organizations: An Executive Briefing on Strategy, Structure, and Process (second edition). San Francisco: Jossey-Bass. Hammer, M. and Champy, J. (1993). Reengineering the Corporation. New York: Harper Collins. Lawrence, P. and Lorsch, J. (1986). Organization and Environment: Managing Differentiation and Integration (revised edition). Boston: Harvard Business School Press. Perrow, C. (1986). Complex Organizations (third edition). New York: McGraw Hill. Read More