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Organizational change is a very common idea found among successful companies. In making the business productive it plays a significant role. In the early 1990s due to increased competition in global economy, new technologies, expanding markets results in more rapid change. As a result the management practices had been revived. Normally most people have negative opinion towards change. This is because of their doubts of loosing something. They have the incomplete knowledge of change process and this will affect their job personal life and workload. To overcome these negativity Oliver Recklies gave the idea that management need to keep in mind those negative side-effects of change in order to achieve the expected positive results. All the employees of the organization should participate for the success of project. The process of change is the nonstop implementation of policies and structures to changing external conditions. Change is not the exception but a steady ongoing process. As John Naisbett said that 'a society in which we are living have been moving from old to the new. And we are still in motion experiencing disorder'. The environment of the organization, even socially and politically is always changing.
We are always looking for newer and better ways. The globalization and inter-cultural exchange had made us more vulnerable to change than ever before. The organizations need to adopt new technologies and management ideas for betterment. The strategic importance on cost cutting and competitive makes it even more important to be open to change rather to resist it. It is very important to accept the change in any form like functional, structural, operational, or strategic.
It is very difficult to define change because every organization has different criteria. Each organization has different challenges. Also each organization has different policies, resources, and culture. The leader of each organization has different aim and objectives. In order to survive in the period of crises each organization should adopt the change without any fear.(Supreet Ahluwalia and Vivek Joshi ,2006)
Factors influences change
There are different factors which influence organizations change. These factors can be external (technology, Government policies, social pressure, cost of raw material etc) or internal (change leadership, decline in profit, union action etc).in this era of globalization the most commonly seen organizational changes are implementation of new technologies, mergers and downsizing.
In today's business environment and within its competitive landscape, change management is managing to ensure the business right across the organization and within each of it individual departments is continually embracing change and reviewing and adjusting within itself to do the best it possibly can, to get to the top, to stay on top.
Change Management is a firm's capability to implement and maintain changes to its strategy, structure and its people that will result in the firm achieving the business results it seeks. Change management is a method of business improvement for organizations.
Figure 1: Phases of change
If organization is not in a constant phase of change management and continually assessing and adjusting then business may be at best average within its industry. For some organizations this means they may be going backwards and eventually bankrupt. Only those companies can survive which can adapt to changes.
This change management model follows all other change management models and theories. Every organization can be summed up to be a combination of these three elements which includes the structure, the people and the strategy. Any change in any area of an organization will affect at least one or all of these elements.
Figure 2: Three elements for change
The structure is the systems are process with physical resources that support the strategic objectives of the organization. Change management specialists will review complete and properly structured management operating system (MOS).
The people involved in this process are stakeholders, resourced people, and management team. All people involved n this process should be well informed and focused on the right things. They should communicate with each other.
Figure 3: people involve in change management
The strategy is the method for achieving the target of the organizations existence. Change management strategy provides the road map used for directing organization from where it is now to where you want it to go.
The Skill of Change Management
Managing change in the workplace while ensuring the operations strategy is on the right path. This can be achieved by the support of people and structure elements towards achieving the organizations corporate strategy.
Phases of Change
Organizational change involves the fear of loss inherent in this process, and this loss is mostly felt by employees. The Kubler Ross Grief Model addresses the emotional issues associated with change. The four emotional states experienced throughout the change process may be expressed by employees in behaviors that are obstacles to the process of change. This model consists of four stages given below:
The first emotional state during change is denial. This is the stage in which employees don't believe this is happening to them. They have certain fears and these fears should be addressed during this phase. This fear can be reduced by taking them in confidence. Fear and mistrust need to be replaced by acceptance.
Resistances to change
The second emotional state is resistance to the change process. Resistance is natural reaction to change. Eric B. Dent and Susan Galloway Goldberg (1999) discuss their research on the origins of this concept and the prevalent idea that managers must overcome this resistance or are doomed to failure. Kurt Lewin, the mid-twentieth-century social psychologist, introduced the term "resistance to change" as a systems concept affecting managers and employees equally. As we know that people of any organization are generally resistant to change. According to Scott & Jaffe 'resistance is a stage that ends as individuals begin to separate from the past & become more confident of their capability. They play their role by their participation to reduce resistance to change'. For example, competition might force a business to organize work around processes to improve operating efficiencies. Functional departments involved in these processes would be combined. Employees might not see a need for this change. The reasons for change must be fully explained so that employees understand why it is necessary to embrace the change. Chew (1990) studied the case of Machinists' Mutiny. In his study he revealed that due to poor planning and implementation the change is stopped due to employee resistance. This article also includes expert opinions that organization should adopt so they have better implementation of change
Once people are convinced that change is necessary, its time to move forward with implementation and consolidation of change. The response to resistance is very important. Forcing compliance may increase resistance. Those affected by the change probably know a lot about what is required to implement something new, and their input is important to the change process. The degree to which employees will support your new initiatives depends on how many of their recommendations are used.
The third emotional state encountered is exploration. employees will search new roles if they are incapable to stop the changes. In this stage both individual role as well as the group role are defined. it is important that unresolved issues that continue to surface be addressed during this stage. One should be ready for the negative reaction of the employee. Those individuals should be warned at the first sign of falling back to old behaviors. This negative reaction can be changed to the positive if trust can be created among groups.
The final emotional state is commitment to the change initiative. Mutual commitment is established for the change effort. Obstacles have been removed and the focus is on successful implementation of the changes.
Models of the change process
After years of failed change efforts, researchers are saying that knowledge of the change process is critical. To thrive we need to know successful change during and before the change process. There are five most popular models of the change process(Lewin's three-step change model, Kotter's eight-step plan, Harris's five-phase model, Fullan's change themes set, and Greiner's six-phase process).But in this report we will discuss only two of them.
Lewin's Three-Step Change Model
Change involves a sequence of organizational processes that occurs over time. Lewin (1951) suggests this three step process. These steps mostly involve reducing the forces acting to keep the organization in its current condition.
Figure 4: Three step model
This is the first step which is accomplished by introducing new information that points out failure in the current state. Crises often arouse unfreezing. This crisis can be due to increase in employee, demographic shifts, and an unexpected strike. This is not necessary that during unfreezing crisis always occur. For determining problem creating zones in organizations financial data, climate analysis and enrollment projections can be used.
Once the organization is unfrozen, it can be changed by moving. This step generally involves the change in structure, development of new standards, attitudes, and behaviors. Some changes may be minor and involve a few members.
The final step is refreezing which involves stabilizing the change. In this step mostly the changes in organizations policy, organizational culture, or modification in organizational structure often accomplishes.
Kotter's Eight-Step Model
John Kotter (1996) of Harvard University developed a more detailed approach for managing change which was based on Lewin's three-step change model.the steps involved in this model are given below.
Establish a sense of urgency: Unfreeze the organization by creating a convincing reason for change
Create the guiding coalition: Create a cross-functional, cross-level group of people with enough power to lead the change.
Develop a vision and strategy: Create a vision and strategic plan to guide the change process
Communicate the change vision: Create and implement a communication strategy that consistently communicates the new vision and strategic plan
Empower broad-based action: Eliminate barriers to change, and use target elements of change to transform the organization. Encourage risk taking and creative problem solving.
Generate short-term wins: Plan for and create short-term "wins" or improvements. Recognize and reward people who contribute to the wins
Consolidate gains and produce: The guiding coalition uses credibility from short-term wins to create more change. Additional people are brought into the change process as change cascades throughout the organization. Attempts are made to reinvigorate the change process.
Anchor new approaches in the culture: Reinforce the changes by highlighting connections between new behaviors and processes and organizational success. Develop methods to ensure leadership development and succession.
Types of Change
Change can be categorized into four categories, structural change, cost change, process change, and cultural change.
Structural change occurs when there is an alteration to the company's organizational structure. This reorganization may occur due to a merger. For instance, an organization that is intent on increasing its innovation may reorganize its traditional functional structure into a more flexible matrix structure that uses small, self-managed teams. Or, an organization that is expanding into new markets may adopt a divisional structure in which different geographic locations operate nearly independently of one another.
Cost changes are those that occur when an organization attempts to reduce costs in order to improve efficiency or performance. Major adjustments may be made to departments to cut costs; reducing budgets, laying off employees in redundant positions, and eliminating nonessential activities may all be a result of cost change.
Process changes are implemented to improve efficiency or effectiveness of organizational procedures. This may occur in production settings; there may be changes to how a product is created, assembled, packaged, or shipped. Or, in a service organization, there may be changes to the procedures used to accomplish work; new computer systems may create the need to change how paperwork is completed, or a new manager may modify the process used to handle customer complaints.
Cultural changes are the least tangible of all the types of change, but they can be the most difficult. An organization's culture is its shared set of assumptions, values, and beliefs. A prototypical culture is the very bureaucratic, top-down style in which stability and standard processes are valued. When such an organization tries to adopt a more participative, involved style, this requires a shift in many organizational activities. Primarily, manager-employee relations are altered with a change in culture.
Management must take a number of steps for the proper implementation of change. The first step in implementing change involves people of higher management and executives. For instance, in an organization new computer system is to be installed in all its areas. Then they major personal are not only top management but also lower-level managers who supervise the employees for the use of the new technology. A different set of key people would be involved in a cost-cutting change. If the company is reducing its operating budget in a specific division, the managers of that division and also human resources personnel should be involved. The human resource department is involved if there is change to personnel policies or in which demotions, transfers.
After key personnel have been identified and properly involved, the second step in implementing change is to develop a plan for effective transformation. The plan should help to define the responsibilities of the key people involved. Also set short-term and long-term objectives for the changes. Because change can be unpredictable, the plan should also be flexible enough to accommodate new occurrences.
The third step in implementing change is to support the plan. This involves the management. This key step involves facilitating employees to accept the change. The organization should provide the basic support to the employees like training, reward system etc. if organization does not provide this kind of support there are chance for the failure of the plan
Change process is the final step of booming change implementation. Communicating with the employee about the change and its importance will be very helpful through out the process. As we know that change can create fear in employees and to relax them increased communication can help a lot. Managers should carefully listen to all their question and their advises to overcome their fear. Creating opportunities for employee feedback, such as holding meetings or having an open-door management policy may facilitate change more successfully. (Wendy H. Mason ,2003)
Abrahamson (2000) gave the view of "Change without Pain". The main theme in this article was change must take place, but change does not always have to be disturbing to the organization. The author believes companies "should intersperse major change initiatives among carefully paced periods of smaller, organic change, using processes. The author calls this "tinkering and kludging. By placing small changes between large changes, companies can manage change through dynamic stability. Dynamic stability is a process of continual but relatively small change efforts that involve the reconfiguration of existing practices and business models rather than create new ones" The goal of dynamic stability is to create a change which can be sustained long term, not just in the short term. To achieve dynamic stability the big and small changes must be done at the right time, at the right pace and the organization must "tinker and kludge". "Tinkering" is taking a current process and making small changes to it. This is done at a low cost to the company and the results are often very quick. "Kludging", on the other hand, is tinkering but on a larger scale. "Kludging" looks at outside resources for improved parts or processes and looks at the unused resources within the company. Many companies do not realize they have resources not being used because the processes using the resources are to slow to fully utilize the capacity of the resource.
This case study was based on a company called Trail Manufacturing which produces cable crane components. This study was done by Chew(1990).The company was a mid-sized company set up to run high volume jobs on manual equipment. But with today's economy and competition, Trail determined the best money was in low volume jobs. The President of Trail decided to bring in new technology to replace the old machines. He researched the new machines and decided to bring in eight flexible manufacturing cells which would replace twenty-eight old six-spindle screw machines. Since this was new technology and training would be needed a plan was laid out to set up teams, one for each cell, and the company would phase in the new machines. Each team would be trained and then they would construct and run their own cell. Once one cell was on-line a new cell team would start up until all eight cells were on-line. The first five teams went through the process fine, but at team six the company had a problem. Team six consisted of men who had been at the company many years. The team went to the president and told him they refused to switch over to the new machines. They felt the old machines were running fine and the new machines did not show the expected improvements, so they wanted to continue working on three six-spindle screw machines. At this point the president had to determine if he wanted to keep going with the project or alter it to keep some of the old machines. Some management personnel felt that if the new cells were going to work, a clean break had to be made from the old machines. Others felt that since the productivity gains were not being seen yet by the new cells, the possibility of keeping the old machines for a short time might be a good idea. The case ends without a decision being made by the company. Four experts in operations management give their opinions on the situation. Only one out of the four said the company should continue on with the original plan and if the members of team six leave the company then it is the price to be paid for progress. The other three are quick to point out the president made a wrong assumption in the planning. He assumed that by bringing in new technology productivity would improve. This is a wrong assumption because technology is only as good as the company and how the company works. One of the experts points out "truly understanding how the whole system plays together, and not just implementing the latest technique, means bridging the gap between the emotional and the technical. The president did not see that by bringing in new technology it would change the culture of the shop floor. Men who had years of experience on the old machines and were in seniority would be at the same level or lower than the younger more computer literate employees. This would be a big culture change for the employees. Most of the experts suggested slowing down the remainder of the cell startups and specifically addressing the concerns of the men on team six. If team six's concerns are not addressed there could be more problems with the rest of the teams. This article showed a good picture of how a company has to go about major changes, especially ones affecting the culture of the company. The expert opinions enhanced the article and I would highly recommend this article because it is an example of a case that is played out in companies all over.
Today change is the necessary of survival and a way of carrying out your business. Every
Organization or firms should under go change with the passage of time otherwise will survive. This change along its success also brings fear of employees to come out of their comfort zones to uncomfortable zone.this leads to resistance to change. How effectively and efficiently the top management and leadership within the organization address these issues and how well are they prepare to handle the resistance will decide the faith of the organization and its success in implementing change. The importance of good communication system and the role it plays in make change process smooth and less painful can not be undermined.
Following are some recommendations.
Managers should improve their interpersonal and communication skills so that they could help their staff overcome the pains associated with change.
Tell people the truth and give as much information as you can. Keep giving information as soon as possible.
Give them time to digest the news.
Give them time to vent there might be anger because this is normal reaction.
Listen to staff and their concerns don't interrupt them so they can reduce their fear.
Abrahamson, E. (2000). "Change Without Pain." Harvard Business Review, 75-79.
Chew, W. (1990). "The Case of the Machinists' Mutiny." Harvard Business Review, 4-8.)
Dent, Eric B., and Susan Galloway Goldberg. "Challenging 'Resistance to Change.'" Journal of Applied Behavioral Science (March 1999): 25.
Kotter, J. P. (1996). Leading change. Cambridge, MA: Harvard Business School Press
Lewin, K. (1951). Field theory in social science. New York, NY: Harper & Row.
Oliver Recklies "Managing Change - Definition und Phases in Change Processes" www.themanager.org/strategy/change_phases.htm. (accessed on 12 of November)
Supreet Ahluwalia and Vivek Joshi (2008)managing Change in an Organization. http://www.indianmba.com/Faculty_Column/FC707/fc707.html (accessed on 13 of November)
Wendy H. Mason (2003) "ManagingChange"www.referenceforbusiness.com (accessed on 12 of November)