Need for and Challenges of Organizational Change Management

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Previously, raising productivity mainly depended on the cheap labor, as long as using the cheap labor force can create great wealth. However, today's productivity is closely linked with knowledge and technology. The former wealth relied mainly on natural resources and raw materials, today's wealth is reflected in the technical and patent. The previous business may be treated by the localization of protection, and now the companies will have to face the worldwide competition. These changes were not encountered for the previously enterprises. So the change is very important for each company.

The main purpose of this report is to create change strategies for Telstra. The report comprises the nature and need for organizational change, change strategies for Telstra, challenges and resistances and the strategies to effectively manage the change process.

2.0 Introduction

In response to the changes in business environment, the companies require the use of human and material resources. However, in some organizations, they are tending to separate the two considerations. Some organizations emphasis on technology networks, such as banks focus on the development of ATM systems, however, they may forget the relationship between people and technology. Some companies focus on employees; however, they may ignore the new technologies. In fact, enterprises want to develop, they should attach importance to employees, while the introduction of new technology to change business processes. Even the best technologies and processes have to dignitaries to perform (Bolman & Deal, 2003). Therefore, the enterprises want to survive in the incentive competition, they must have the ability to face the various constantly changing business environments, the organizational change will be necessary.

3.0 The nature and need for organizational change

Organizational change refers that the managers use the behavioral science and related management practices to carry out the objective and systematic adjustment and innovation to the organization authority, organization structure, organizational scale, communication channels, role set, the relationship between organizations, as well as members of the ideas, attitudes and behavior, cooperation among members, and so on, in order to adapt to internal and external environment, technical characteristics and changes in organizational tasks, and improve organizational effectiveness. Enterprise development is inseparable from organizational change (Palmer, et. al., 2009). Internal and external environment changes, and the continuous integration and changes of enterprise resource always give the opportunities and challenges, which requires companies to focus organizational change. Organizational change generally involves four aspects: organization of personnel, organization of tasks, technology, organization structure and organization of the environment (Senior & Swailes, 2010).

As Telstra has entered the Full-service telecommunications operational phase, the original enterprise system, enterprise culture, enterprise strategies can't meet the needs of the current market. Therefore, Telstra is only through integration of internal and external resources to carry out the organizational change and build business network science, and use business platform to meet customer demand for personalized products through successful product management, and then Telstra can achieve a successful transformation in order to ultimately ensure business long-term profitability.

The successful implementation of the new strategies requires new organizational structure to safeguard. The ultimate goal of change is to rationalize the organizational structure and improve high efficiency, so various operating elements should be effectively and reasonably allocated to ensure that the operating mechanism can play an effective role. The new technologies of telecommunications industry are Ever-changing, new entrants can make use of new technologies to rapidly create a powerful advantage; with the development of society, customer needs are constantly evolving, more customers demand for a integration of various services, changes in the environment will lead to the adjustment of operators' strategic objectives. The successful implementation of the new strategies requires a new organizational structure to protect (Bettley, et. al., 2005). In Europe, mobile operators need to implement the organizational change as an average of once every two years, and fixed network operators need an average of 3 to 4 years for an organizational restructuring. In Australia, as the era of all business operations, market competition is more intense, each operator has formulated the new strategic objectives. Therefore, it is necessary for Telstra to carry out the organizational change.

According to Kate Lahey's article "Telstra to restructure senior management", Telstra has dropped a mass of customer confidence and lost ground in customer service, Telstra's traditional phone business has great trouble, its total revenue has dropped 2.5 per cent to $12.32 billion, while net profit dropped 3.3 per cent to $1.85 billion. In addition, more customers like using wireless broadband instead of the fixed-line, copper network, and they are increasingly relying on mobile phones instead of landlines. Obviously, those new trends has deeply influenced the development of Telstra, so in order to get more customers love and gain a competitive advantage, it is necessary for Telstra to initiate the organizational change.

4.0 Change Strategies for Telstra

David Thodey as the chief executive of Telstra has announced its organizational change as restructure of its senior management team in order to improve its customer service and win back customer's confidence and the loss ground in market share, Kotter's organizational change model will be a good choice for Telstra to implement the organizational change. Based on the current situation of Telstra and Kotter's model (Leban, et. al., 2005), the change strategies for Telstra should include eight steps as follow:

Establish the need for urgency

The change need for urgency is the spiritual foundation for the successful change. Once people have a real sense of urgency, they will feel obliged to take action on critical issues now; in a certain extent, a real sense of urgency may be a motive power for the development of people. In addition, employees who are lack of urgency are often the status quo power and opposing change. Therefore, Telstra should announce bad news timely, for example, loss of market share, net profit decline, So that employees can not be complacent, and be filled with the need for urgency.

Ensure there is a powerful change group to guide the change

Guide research and change management experts Kotter believed that failure of organizational change were often caused by the negligence of senior management. A powerful change group can be able to develop effective plans and measures to ensure the smooth implementation of organizational change. Thus, a powerful change group to guide the change is a key part for the success of organizational change. Therefore, Telstra should create a powerful change group leaded by Mr Thodey to guide the change.

Develop a vision

Mr Thodey should ensure that every employee can see the benefits of implementing the organizational change, so that the resistances may be less, and employees can actively cooperate with organizational change. Therefore, developing a vision is necessary. The vision includes three goals. The first goal is to improve the customer service to win more customers; the second goal is to win back the customer satisfaction; the third goal is to win the loss ground in market share.

Communicate the vision

After developing a vision, the communication becomes the important task. Telstra should ensure that its employees and customers can understand the vision, so that the communication can smoothly conduct. Mr Thodey should instruct relevant department to updated information on changes in a timely manner.

Empower the staff

Firstly, the managers of Telstra should understand that the staff is the key element of success. Secondly, Telstra should try to decrease some senior management roles, so that frontline staff can do their jobs more efficiently. Thirdly, Mr Thodey should properly empower the staffs that are trustworthy, so that those staffs can try their best to help change of success.

Ensure there are short-term wins

Whenever people pay out the effort and hard work, they always want to get harvest. Therefore, only a vision can not meet the psychological needs of employees, the change group should formulate short-term plans to ensure that Telstra and its employees can have short-term wins.

Consolidate gains

In the process of change, any gains are very important. Those gains can not only enhance staff's confidence to implement change, but also improve the driving force of change. So, the managers of Telstra should timely consolidate gains.

Embed the change in the culture

The core of corporate culture is the spirit of enterprise, and enterprise spirit is the soul of an enterprise. So the organizational change must be embedded in the corporate culture. Only in this way, the organizational change is the real meaning of success, and the vision can realize.

5.0 The Challenges and Resistances

With the development of information technology,business environment has also the dramatic changes. Any market-oriented businesses must seize the opportunity to promote the technology change, organizational change and personnel changes to adapt to changing internal and external environment. But change means destruction, means to break the traditional rules and systems. This feature of change makes changes with different levels of risk. These changes will inevitably involve in all levels of the enterprise, and cause redistribution of benefits of the individuals and departments within the enterprise. Therefore, this will inevitably meet resistance from various aspects of enterprise. The sources of organizational change's resistance are as follow:

Individual level

People's attitudes towards to organizational change have close relationship with personality (Poole, 2000). Those people who dare to challenge, willing to innovate, have a holistic perspective with strong ability to adapt to changes usually have more strong change consciousness; while those people who have a strong desire for success, or some conservatives who advocate for stability, and narrow-minded people have greater resistance to change. Some stronger dependence of employees and not strong-minded employees are often overwhelmed in the change, and then they often leech on to the group attitudes toward the organization. In addition, due to change to break the status quo, to undermine the existing balance, so the change will inevitably damage the vested interests of some people, these people are often the biggest organizational change in conflict; they often walk rumors, create confusion, or even to take strong measures resistance to change. Individual level of resistance mainly stems from the individual psychological and economic benefits driven, although the intensity of resistance to organizational change is small, individual level of resistance is also the basic structure unit.

2) Organizational level

There are many factors that create resistance to change at the organizational level; those factors include not only organizational structure, rules and regulations and other overt resistances, but also the organizational culture, atmosphere, staff's work habits and other recessive resistances. As organizational change will carry out re-distribution of interests of all departments and various groups within the organization, so those people who had a larger rights in the organization, higher-status sectors and groups will inevitably consider change as a threat, and they often resist change in order to protect their own interests (Erwin, and Garman, 2010). In the long-term work, the organization's culture and staff working have become a way of working habits. Between staff and employees, between employees and leadership, staff and organizations have formed some kind of understanding or contract, once the implementation of change means to change the employees working relationship and working that have been formed, so the change will inevitably lead to staff dissatisfaction.

6.0 The Strategies to effectively manage the change process

1) The human resource department of Telstra should service for the organizational change. Employees' personality and their attitude towards change are closely related, therefore, Telstra should firstly introduce the psychological testing mechanism in the recruitment process, and then they can recruit some strong adaptability, energetic staff by the psychological testing mechanism. Second, in the process of organization change, Telstra should strengthen staff training to improve staff knowledge and skill levels, in order to ensure the quality of corporate human resources and organizational changes simultaneously. Again, in the Telstra's ordinary course of business, Telstra should establish a kind of group mentality of the culture that nurtures employees' sense of belonging to the organization and develop a corporate culture with willingness to share weal and woe with the company.

Telstra should strengthen communication with staff, so that staff can understand the significance of change. Before the implementation of the change, Telstra's managers should create a sense of crisis, so that its employees can understand the urgency for change, and they understand the benefits of the changes for organization and themselves, and to provide timely information about changes to clarify the change of the kinds of rumors, create a favorable atmosphere for change. In the process of implementing change,Telstra's managers should ensure that the employees can understand the plan of change implementation, and they should be as much as possible to listen to opinions and suggestions of staff in order to ensure that the employees can take part in the change. At the same time, Telstra's managers should be also always concerned about the psychological changes of employees, and timely communicate with employees; at the right time Telstra should make a commitment to eliminate the psychological concerns of employees.

Telstra's managers should be properly using the means of incentive. In the process of organizational change, the proper use of incentives can achieve an unexpected effect. On the one hand, the company should properly raise wages and benefits so that employees feel the benefits and hope of change in the change implementation process. On the other hand, Telstra's managers should resolutely put some employees in an important position in order to hold key employees, to eliminate their concerns, and to ensure their peace of mind for Telstra.

Telstra's managers should introduce change spokespersons for the organizational change. Change spokespersons are the so-called consultants. According on the above analysis, in the change process, some employees believe that the motive of change brings the subjective nature, and they think the change is convenient for the authorities to seek personal gain. Some employees think that Initiators have a limited capacity to change, and can not effectively implement the change. The introduction of change spokesperson can have a good solution to these problems. On the one hand, consultants are usually formed by some outside experts, and their knowledge and ability is beyond doubt. On the other hand, due to consultants from the third party, they usually have a more objective understanding of the problems faced by enterprises, and they can more accurately find a solution.

Telstra's managers should use force field analysis to solve all kinds of problems. Force Field Analysis was put forward by Lewin in 1951; he believed that motivation and resistance simultaneously exist in the change process, decision makers should be through the analysis of the motivation and resistance of change to find the breach. Therefore, Telstra's managers should use force field analysis to find the breach.

Telstra should cultivate the spirit of enterprise leaders. In the process of change, if the enterprise has a strong leader, relatively speaking, there would be little resistance to change, because the spiritual leader usually has excellent charisma and very good job performance (Carter, et. al., 2005).

7.0 Conclusion

In conclusion, in order to improve its customer service and win back customer's confidence and the loss ground in market share, Kotter's organizational change model will be a good choice for Telstra to implement the organizational change. In the process of change, the managers may meet many challenges and resistances, according to the above six strategies the managers can successfully overcome the challenges and resistances.