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Many organizations focus on maximizing opportunities by getting in change agents who provide and offer expertise in critical areas. A change agent primary role is to bring positive change into the organizations and to make sure that the change in the organization will remain sustainable and do not cause more harm than good to it. They are individual or a group of people whose main role is to change human competency or organizational systems to achieve a better output or self actualization. Organizations can choose to have a change agent internally or to hire professionals externally to manage and facilitate changes for them. Their work can considerably contribute much to the overall success of an organization. However, they both have their distinctive advantages and disadvantages as well.
Internal change agents are usually staff nominated from chosen managers or team-leaders in the organization to help change and in the intervention technology of organizational development (Jones & Brazzel 2006). They coordinate, plan and provide support to lead the change process in the organization. They are normally used when changes needed require the understanding of the organization's structure, policies, procedures and practices.
Internal change agent have the benefits to access to information that external change agent cannot get no matter how long the project runs (Paton & McCalman 2008). This is the valuable aspect of an internal change agent by having information readily at hand and at the same time, remaining objective in the organization.
They are familiar with the internal culture and the politics of the organization which help them able to "kick-start" their job smoothly. They are committed to long term success and also gain trusts and rapport easily within the organization compared to an external change agent.
However, knowing the politics and cultures of the organization has its down-sides as well. Internal change agents might be overly cautious and hold back to present their findings or proposal of change that involve the higher management. Pascal and Sternin (2005) state that, "Problems often go unresolved because the path to the answer is littered with potential losses and other risks." They are afraid that the decision might not be in their favor and will affect their reputation if failed. Furnham (2010) state that internal change agents have many great ideas but the fear of getting it wrong means they do nothing and they let other win the prizes.
Taking Hewlett Packard (HP) for example, Ray Lane, who was the chairman, was also taking the role of an internal change agent in the company. Lane and the CEO of HP, Leo Apothekar are the top management of HP and have their difference in change management with each other. In an interview with Lane, he state, "it was hard with Leo, you have to have a consensus that it's the right move for the business and you've got to do it"(Gupta and Mcbride 2011). Their differences lead to the dismissal of Apothekar. The dismissal of the CEO will not do any good for the company and moreover, it will affect the morale of staffs working there. Internal change agents who have coercive power will also tend to intimidate people to follow their decision. They are also not open to ideas which will affect their objectivity level.
Individuals will tend to adhere to an internal leader which they may know them personally and hold a certain amount of mutual respect and trust in them. In General Motors Co., more than 50 managers were chosen to become change agents because they embody the behaviors sought from all employees (Merx 2009). GM's CEO, Fritz Henderson, believed that internal managers have the leadership to influence staffs to improve GM. Schumacher (2008) states, "it is much easier to bring in changes within employees when they trust their change agent. That trust comes from an establishing relationship." Internal change agents are clear about the organizations norms and will try to maintain while implementing proposals.
Internal change agents may also have their own sub-grouping and might show favoritisms or biasness among individuals in the organizations (Nelson and Quick 2005). They may also be disliked or mistrusted by some of the stakeholders and bosses and these will affect their future planning and objectives level and changes in the company will not be maximized.
External change agents are outside consultants that are employed temporarily into an organization to help clarify and meet the target objectives that the company wants. Normally, organization uses external change agents because internally, their managers lack of certain skills or experience in areas they want changes to occur. For example, company wants to change using a new technology or software or participating in a merger or acquisition. These implementations would normally be new to staffs internally and would require professionals who are experience to help coordinate and mentoring the process.
External change agent tend to have a higher payoff compared to internal change agent but most of them lack of work continuity as they are often on a fixed term contract (Gilley et al. 2001). Their perception within the company might be little on the outcome, be it positive or negative, because they are "contractors" hired into the company to help manage change. They may have the "don't care" attitude and have the mindset that they will just do what is required and their job is done. They may also be disliked by employees because of their short-term image. Internal staffs also believe that when the problems are too complicated or difficult to change, the external agent can simply walk away with little consequences.
As they are new to the organizational history and background, they need "breaking-in" period to familiarize the cultures and practices of the company. They are also much more expensive compared to internal change agent as the costs of getting the external change agent to get up to speed with the organization's value and culture are expensive in time and money. Patin and McCalman state, "external agents charge by the day, or by the cost of one project which can run into tens of thousands of pounds."
The price of external agent and the period of time needed for them to blend into the culture can be tackled if the agents have the correct strategies. IBM's Lou Gerstner, one of the successful external change agent, succeeded in changing the culture of IBM. His strategy was to not make any changes in the initial part of their tenure. Karaevli and Zajac (2012) state," this patience approach gave him time to learn the businesses and time to gain power base in political and social aspects in IBM". Under his guidance, IBM cut billions in expenses becomes profitable again. He also introduced a new reward system to reward and motivate them to "get things done quickly".
External change agent has limited influence to make changes in an organization. Internal staffs choose to "follow" depends on his "status" or experience. This can be gained through the academic level and the experience they gained through over his course of work. They do not have the authority to introduce change, they need to use their "status" to persuade the internal staffs with authority to implement their ideas.
External change agents are neutral in dealing with politics or norms in the organization. They may neither be an authority nor a subordinate, they can they can blend into top down and bottom up approaches by listening and intervening when appropriate (Taufik 2008). They are not intimidated by higher management which may affect their decisions and planning and are more objective oriented compared to internal change agent.
Both internal and external change agent can be successful in resolving problems and changes in organization. Lunenburg (2010) states, "the success of change effort would depend heavily on the quality and workability of the relationship between the change agent and the key decision makers within the organization".
In discussion of the effectiveness of internal and external change agent, internal change leaders would be more efficient in bringing changes to a smaller organization with a change-conservative culture, and companies looking for long term success. They are more familiar with the organization's cultures and get access to information that is important for change. They know the cultures and would try to maintain them while implementing plans. Big organization with a change-acceptance culture and looking for huge changeover in their system could get external change agent. They can bring in new expertise and ideas as well as promote and facilitate change in their organization. External agent can be as good as internal agent in terms of change management if they have sufficient time and a structured transition process by the company.