The world today is characterized by instability where change is inevitable.
(Hiatt,2003). The organizations today can chose to become part of the problem or part of the solution. They need to be in control of how they respond to the change in environment around them. Change management may be defined as a systematic use of knowledge of change in order to reduce risks for the organizations by developing programs to deal with them (Cameron,2004). There are numerous triggers in the environment which can force the organizations to change the way they have been working in the past (Paton,2008). Some of these triggers might be privatization/nationalization, demand of more value from the shareholders, restructuring, regulatory change, threat of takeover, increasing competition, etc
The essay aims to discuss the change management activities; their roles end importance in organizations at the time of downsizing and, When an organization goes through mergers and acquisitions, there are a lot of posts which become redundant and a lot of units and departments in the organization go worthless
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(Nilakant,2006). In order to cut costs, it becomes necessary for the organizations to lay off employees. The essay will also discuss the important role change agents play in the successful completion of change management activities in any firm. The essay will focus on the ‘cultural' change aspect and will recommend ways to bring about a cultural change.
2. Literature Review
2.1 Eight Steps to transforming Organizations (Elearn Limited,2005)
There are 8 steps to transforming the organizations in case of change initiatives. The organizations should firstly establish a sense of urgency. This should be followed by a powerful management who is able to guide the employees properly. A proper vision must be created for the change to take place ( Cummings & Inglehart(2008). A very important aspect is communicating that vision to all the employees within the organization. Others must be empowered to act on that vision too. This will motivate the employees to work towards bringing in a successful change. It is very important for the organizations to celebrate the short term wins too, these small motivations for the employees have proved very useful in bringing in successful change. Also, the change management activities in any organization should be updated with time. This is because stagnancy is the biggest and the worst virus which can rust the organizations from their roots (Harrison,2006).
Source: (Elearn Limited, 2005)
2.2 Total Transformation Management Model
The Total Transformation Management Model must be followed in the process of change management. This model suggests that every change management activity must start with developing a vision for change (Doppelt,2003). This should be followed by evaluation by the organization as to why they need to change and also, that whiter there the organization and its employees are ready to go through the hectic process of change (Sharma,2006). The organization needs to define the future state, i.e. the outcome where it wants to be as a result of change. The present state of the organization must be properly diagnosed by means of SWOT analysis, which will give a detailed idea about the strengths, weakness, opportunities and threats to the organization (Chapin,2008). Then, there should be a proper assessment what are the differences between the present and the desired state of the organization. The developmental plans for change may then be prepared. And, finally intervening in the organization on three levels: individual, group and organization, can they be done.
Source: (Mink and Owen, 1993; focused on system as a whole and on human side of organizations)
2.3 Tichy's (1983) Nine Change Levers
This model has proved to be one of the most prominent models for cultural changes. The model basically emphasizes the need for coordinated technical, political and cultural approaches to change.
Source: (Esther Cameron,2004)
3. The Change Management Process
The organizations should change when they are robust and in a sound state, rather than when they go weak. This means that the change efforts in the organizations must be proactive and not reactive.
While bringing in some change, organizations must conduct surveys to know the employees take towards it. Also, suggestions from the employees must be invited. This makes the employees feel more involved in the success of the organization and they get internally motivated. Also, since the employees are the biggest ambassadors for the firm, treating them properly and taking them together during the change process prevents any bad mouth for the firm.
3.1 Formation of a Change Group
Always on Time
Marked to Standard
In case of bringing in a cultural change, firstly there is a need to create a change group. The change group must essentially consist of the head of Human resources department, head of communications department, the Training and development head and the managing director. The corporate communication department needs to focus on what information to communicate to the employees. The HR department needs to focus on how to communicate the layoff information to the employees. The training and development department must train the top management and line managers to deal with the employee's queries and stress while trying to deal with change.
3.2 Need for Proper Communication
The vision of the organization must be communicated to the employees through all sorts of media platforms, be it public meetings, informal discussions or the company intranet. Public meetings make the stakeholders of the firms aware of the advantages the change would entail. The management must stay in touch with the employee's families too. Additionally, there is a need to reduce the aftershocks of change. A lot of employees go jobless after layoffs. The firms laying off people must form placement committees who match the laid off employees with alternative vacancies. Also, counseling should be provided to the employees door investment planning. The firms should also try and provide some monetary aid like loans, etc to the employees to start off a fresh. All the managers must be trained to engage in face to face dialogue with the workers. The management must make sure that the same information in divulged to all the employees at the same time, so that there is no place for any discrepancies and confusions. Welcoming the employees' queries and answering to them on a one to one basis also holds a lot of importance. The communication channel should consist of a system where there is a guaranteed hearing and response to all employee grievances. Dialogue session for the employees and creation of “Listening Posts” in the firms to specifically deal with employee's grievances are a must. Proper communication by the firms helps to answer the questions to the employees like what is the need for the firm to change, how will the firm go about the entire change process, how will it affect the employees ,etc. There are a lot of rumors which arise among the employees when change takes place in the organization. The rumors can be for instance, additional layoffs might take place; departments might get closed, etc. The senior management of the organizations needs to make sure that they are visible and accessible for their employees. This helps in dispelling any rumors. Also, Line managers are a point of contact for all the employees. They are a link between the top management and the employees at lower levels. Line managers should be given appropriate training to address the emotions of employees and to tackle the rumors.
3.3 Role of Change Agents
A change agent is the one who serves as a channel for cultural and behavioral change. A change agent is in control of his attitude and stays positive even when faced with numerous pressures. It is often said that positive attitude is contagious, and this motivates the other members in the organizations to stay positive too. A change agent also needs to be proactive in his approach; he should take note of the need for change beforehand only in the battle for survival for existence of his organization. Thus, he should make a habit of changing a little ahead of the times. Organizations might have internal or external change leaders depending on the requirements. Both have their own advantages and disadvantages. The change agents should be able to manage the stress of their employees effectively and in keeping their morale high.
3.4 Framework for Cultural Analyses
The firms should develop a specific framework for cultural analyses in the events of changes like mergers so as to analyze what kind of business culture the target company (i.e. the firm you are looking forward to merge with) has. This is because cultural differences may get so problematic that it may take years to overcome them. This would involve understanding the decision making style and the leadership style of the target firm, analysing How people work together (for example: based on formal structure and role definitions or based on informal relationships) and also finding out the Beliefs regarding personal “success” (for example organizations that focus on individual “stars,” or on teamwork)
3.5 Why Change Efforts Fail
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It has often been seen that inspite of all the efforts made by the top management, the change efforts fail (Baer,1990). On reading through a lot of case studies of change management initiatives in organizations, I could list down several reasons for failing of change efforts. The first and foremost reason for failing of change efforts in organizations is inadequate communication. Also, many a times, the employees are uncommitted to the change initiatives in the organizations and resist change . A lot of times, the organizations fail to diagnose the strategy they should be adopting to bring in successful change (Meyerson,1987).
3.6 Dealing with Employee Resistance
The employees resist change when they get a feeling that they are being forced to change . Nobody likes to be forced for something. The management should act as a helper to the employees and should not act as a dictator otherwise it would never be possible for the management to motivate the employees internally for welcoming change. Also, the management must accept the fact that change is a gradual process. The management should not get impatient in bringing in the change; else this would result in very undesirable consequences. It is necessary to give sufficient time to the employees to accept the change (Routledge,2010). In any organization, there always exist some hard nuts that show the most resistance to change. Such hard nuts need to be dealt with effectively. The senior management should try to persuade such hard nuts effectively by talking to them face to face and maintaining visibility. It is important to be honest and sincere to the employees. Also, the firms must never make untrue commitments to the employees and should never fabricate the figures (Rosenberg,1998).
4. Example: TATA Steel
Taking the instance of TATA Steel, India based company which is one of the biggest exporters of steel in the world. The company had to go through the process of downsizing and delayering because of triggers to change viz. free economy, lifting of government controls, increased competition and massive stagnation in the Indian Economy (Nakae, 2005). JJ Irani, MD.TATA Steel, brought this change deliberately and it was a result of his strategic planning (Pandit,2007). He started the change process by creation of a Steering Committee which kicked off change process throughout the organization. Also, JJ Irani communicated to the employees a very positive statement .The employees were told that it is not they who are useless or of no good use, it is the job slot that is not required. This aroused a positive feeling in the employees are their morale was back again Also , Mr. Irani visited the employees' families in personal and talked to them and listened to their grievances (Pandey,2010). When any laid off employee of TATA Steel opened up a new venture, Mr. Irani used to visit the employees personally to congratulate him and wish him success (Antony,2006). The former employees thus still considered TATA steel in their good books. The news of the new start-ups of the laid off employees were published in the company newsletters (Siddiqui,2008). This helped the existing employees in the company cope up with their “survivor's guilt”.
Also, Hewlett Packard & GE have been the pioneers in implementing change management programs within their organizations. Both these firms have been involved in a lot of mergers and acquisitions in the past and have successfully brought about cultural change in all of them (Slater,2000).
A study of change management practices in various organizations has helped me get some key learning's. A Participative management style must be adopted by organizations for helping the employees cope with the change. Also, two ways communication must be encourages. Open door policy has proved to be one of the best approaches in helping the employees cope change. In organizations where trade unions are prevalent, these unions must be considered as a partner to management. The entire process of change management needs to be very transparent to gain the trust and faith of employees. Also, it is important for the companies to build a culture of continuous improvement and to foster a culture of learning and development rather than playing a blame game which is the chief source of any firm's failure.
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