Organisational Change And Its Influence On Structure Culture Commerce Essay

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1. Change in simple organisational structure seeking for collaboration. 2. Change in culture of organisation. Kotter's eight-step model linked with Kurt Lewin's model is used for identifying and justifying the change management issues. The SWOT analysis is also used in support which explains how company responds to the eight steps. The suggestions have been taken from the model which focuses on the changes to be made for strategies. The report recommends giving proper training to staff to accept the change. Change model have been introduced as managing change is difficult task. This process will help staff to manage the change, achieve its benefits also identify the opportunities. This process will help people to think about the change daily in every aspect and barriers will be removes in order to allow change to move forward.

Table of Contents

Task 1

1. Salfordia Company Profile:

Current procurement method of Salfordia is traditional form of procurement. The current culture and organisation structure of the Salfordia will be described. Salfordia believes that it will be the client's first choice for future projects. Salfordia is a medium sized construction management/contracting organisation run by 4 out of 6 Members of Board, and the chief executive being family members. Its processes and procedures are established 10-15 years back and so are resistant to organisational change. They are also looking at alternative forms of procuring work in the UK and are more interested in collaborative contractual agreements with clients.

Company's Objective :

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Trust

Hard work

Passion for Construction

Consistency in Performance

Professionalism

Values:

Customer satisfaction

Team structure & Dynamics

Quality

Leadership & Motivation

2. Organisational Structure:

An organisation is a team of members working together to achieve the same objective. Mintzberg (1983 P.2)Suggests, "the structure of an organisation can be defined as the sum of the total ways in which labour is divided into distinct tasks and then its co-ordination is achieved among these tasks."

One of the crucial aspects of an organisation is having a good structure which usually depends on its size, type of organisation, strategies and environment. The members of organisation should work to achieve the common goal which is 'clients need'. Every member of organisation should be aware of its own responsibilities to meet the desired targets, giving good performance and by also keeping the overall budget in mind. Such an organisational structure will help to minimize the conflicts and focus on the goals which in turn will lead to a successful organisation.

Mintzberg (1983) describes five basic parts of organisation are as shown in the fig below:

mintzberg_2b

Fig.1 Basic Parts of the organisation by Mintzberg (1983)

As described by Mintzberg (1983, p.9)

Operating Core: People performing the basic work of an organisation are its operators found at the base of an organisation. These people form an operating core.

Strategic Apex: As the organisation grows and starts adopting more complicated division of labours among its operators, and here arise the need of direct supervision. It becomes a compulsory to have a manager who will be in in-charge full-time is called as "Strategic Apex".

Middle Line: With the elaboration of organisation now more managers are required. The need is not only of managers but also the managers of managers are also needed. These form the middle line.

Techno-Structure: The elaboration process continues, the organisation may turn increasingly to standardization as means of co-ordinating its work. The responsibility for much of all this standardisation fails on another group of people, whom we shall call the analysts.

Support Staff: the growth in organisation adds staff of different nature which not only affects the standardisation but also to provide indirect services to the organisation itself. These includes from cafeteria to legal counsel or even the public relation department. These are the part of the organisation and form the support staff.

Mintzberg (1983) also explains the basic co-ordinating mechanism. There are different co-ordinating mechanisms which are as follows:

1. Mutual adjustment

2. Direct supervision

3. Standardisation of work processes

4. Standardisation of outputs.

5. Standardisation of skills

Appendix (1) gives detailed description of the above co-ordination mechanisms with suitable diagrams.

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Types of decentralization as described by Mintzberg (1983) are, vertical and horizontal centralisation, limited horizontal decentralisation, limited vertical decentralisation, vertical and horizontal decentralisation and selective vertical and horizontal decentralisation

Appendix (2) gives Description on types of decentralisation.

Mintzberg (1998) also states organisation configuration as, the simple structure, machine organisation, professional organisation, diversified organisation and adhocracy.

The table below shows main feature of the organisational configuration (Mintzberg, 1998)

Organisational Configurations

Principal Co-ordinating

Mechanism

Key Part of Organisation

Type of Decentralisation

Simple Structure

Organisation

Direct Supervision

Strategic Apex

Vertical & Horizontal Centralisation

Machine Organisation

Standardisation of work process

Techno-Structure

Limited Horizontal Decentralisation

Professional Organisation

Standardisation of Skills

Operating Core

Vertical & Horizontal Decentralisation

Diversified Organisation

Standardisation of output

Middle Line

Limited Vertical Decentralisation

Adhocracy

Mutual Adjustment

Support Staff

Selective Decentralisation

Table 1: Main features of the organisational configuration. Source: (Mintzberg, 1998 p.153)

2.1 Salfordia's Current Organisation Structure:

Historically Salfordia's workload has been obtained through the 'traditional' form of procurement. In this method client takes all the responsibilities for project design and project team. The company usually gets involved in the tender process or negotiation and then a contract is signed to work for a project with a fixed lump sum price. All the members of the project are appointed by the client including consultants for design, cost control and contract administration. The responsibility of the company is only up to carrying the construction work. Some other responsibilities which come along with construction work are workmanship and the proper use of materials as per the specification and their proper make and brand. Salfordia appoints sub-contractors to be engaged with the company and also take full responsibility for their performance. A contract is signed as a document with complete information through competitive tendering.

BOARD OF DIRECTORSORGANISATIONAL CHART

FINANACE MANAGER

CONSTRUCTION MANAGER

ON-SITE LABOURS

SITE ENGINEERS

BUSINEES DEVELOPMENT MANAGER

ACCOUNTS DEPARTMENT

MARKETING MANAGER

ESTIMATOR

Fig 2. Salfordia's Current Organisational Structure.

The organisation is run by the family members. After reviewing the implications of Mintzberg (1983) organisational configuration, owners are themselves the Board of directors of the company and hence they are the strategic apex. Finance manager, construction manager and business development manager reports to Board of directors. The site engineers and on-site labours report to construction managers at operating level. The Salfordia's co-ordinating mechanism is of direct supervision, where the authority of making decisions and implementation of the same is with strategic apex. As all the authority of making decision is with board of director which forms vertical and horizontal centralisation. Hence the strategic apex forms an imperative part of organisation. The Salfordia Company structure is simple. The flow of information is also more informal.

3. Organisational Culture:

Cameron and Quinn (2006, P.31) say, core values, assumptions, interpretation and approaches that characterise an organisation define the organisational culture. As per competing values framework table developed by Cameron and Quinn (2006) states four types of organisational cultures are as, Clan (Collaborate) culture, Hierarchy (Control) culture, Adhocracy (Create) culture, market (Compete) culture

CLAN

ADHOCRACY

HIERARCHY

MARKET

External Focus and Differentiation

Flexibility and Discretion

Internal Focus and Integration

Flexibility and Discretion

Fig.3. Competing values framework. Source :( Cameron and Quinn, 2006 p.35)

Clan (Collaborate) Culture: It is a friendly place to work more like an extended family. Hence, a warm and caring environment is formed. Loyalty and tradition are the strong beliefs which hold the organisation together. There is strong concern for people. High priority is given for commitment. Teamwork and participation are most important in the organisation.

Hierarchy (Control) culture: A highly formalised and structured place to work. Organisation is governed by rules and policies. The organisation has long-term goals like stability, performance & efficient operations. It is very essential to have a smooth-running organisation. Security and predictability is of major importance.

Adhocracy (create) culture: A dynamic, entrepreneurial place to work. Employees and leader acquire innovation & risk taking abilities. A great emphasis is on growth and resource acquisition. Rewards are individual initiative.

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Market (compete) culture: This is result-driven and production oriented organisation. The common concern is reputation and success. Long-term focus is on competition and achievement. Rewards are based on achievement.

Salfordia possess a clan culture, as it is a company run by family members and so the work environment is also friendly. There is a give and take of knowledge and new ideas. Each person of the company is treated as an extended family member. The organisational is under tight control of the owner. There is a strong concern for people. Teamwork, participation and smooth running of organisation are given high importance.

4. Strategic Planning:

Strategic Planning for Salfordia will be done as Follows:

4. 1 SWOT Analysis:

SWOT analysis means knowing the strength, weakness, opportunities and threats of the company. Salfordia's SWOT analysis will be shown below:

Strength:

Ability to win client's confidence: Salfordia thinks that it should be client's first choice when they think of starting a project. The company has been working for over 15 years and has established standard procedures and also maintained good clients in North-West region. It is always important to win the trust and confidence of existing clients as they are good prospects to a new approach. The priority should be always meeting the client's requirement. There should always be a healthy communication and proper negotiation.

Problem solving abilities: There should also be positive attitude, good technical and problem solving skills and also an effective solution. Technical knowledge is very important which helps in proper identification of a problem and also gets easier to find an effective solution. Positive attitude helps in enduring when faced to a problem and helps us to be adamant to "never give up" idiom.

Teamwork: The Company has got good a team of experienced members of which a few have been working for the company since its origin and so they have been a part of their successful projects and established procedures. Teamwork is all about working together for the same objective and well being of the company. It is all about encouraging and giving support to each other. The company has got really good team which respects everyone and maintains the team morale.

Performance: The performance can be individual or a team performance. If everyone in the team performs well it is going to benefit the company. It is therefore important to have a healthy working environment and appreciation of an individual's performance in order to get returns of good work. Salfordia has got healthy working conditions and so has been performing well and in case of introduction of a new approach it will be able to maintain the consistency in the performance.

Innovative abilities. : Salfordia has got a team of enterprising and creative members. Since they have been working for North-West region, they know how to be innovative and demonstrate their skills in every project.

Weakness:

Lack of client awareness: As the company has its established procedures, it would be difficult to make clients aware of the new approach. The clients may be unaware of the new approaches and may be reluctant to any changes done in the procedures of the contract or in the way the work gets carried out. It might be crucial in getting new clients until the new approach is well set in the organisation.

Difficulties with management system: There might be an introduction of new management systems which will be difficult to be accepted by the established management department. The most influenced people are the managers who play important role in the management system. Mangers should actively participate in the process of change and also realize their role and purpose in ever-growing and challenging organisation.

Lack of resources. : There might be lack of resources if considered the advancement in technology. New Software's, updated knowledge of materials, easy accessibility to the innovative information is very important while facing the change.

Opportunities:

Quality of service: As Salfordia has been working for North-West region it has always given a quality service to its clients. It includes use of superior building materials, good workmanship, meeting the deadlines. Understanding the client's priorities and giving them the best they want.

Increasing client awareness: As the Company will be moving towards a new approach, the clients who are aware will come to know about the company. And also the existing clients will acquire some knowledge of the new approach.

Chances of forming a strategic alliance. An Alliance is said to be "Strategic" when there is a certain goal which an organisation alone cannot attain and has to work together with some other organisation. Certain issues may be exploited so as to enhance positions of all the parties when applied to new markets.

Threats:

Lack of financial resources: While entering a new approach or change it is likely to make an initial investment. There might be lack of financial resources as there will be no cost certainty for the projects carried out by new approach. The investment might go on increasing as the stages proceed. So there might be a fret of financial crises too.

Inflation: As we have all gone through the world's biggest recession. There is uncertainty in market. Inflation can severely affect the performance as it is directly proportional to the market conditions.

Lack of qualified labour: Lack of qualified labour leads to threat to future of growing organisations. The overall performance can be affected due to lack of skilled labour. In terms of reliability in cases of urgencies will be reduced. Market conditions, competition within the construction industry has led to low productivity, high consumption of resources, large influence on environment and a lack of qualify labour (Larsson 1992).

New technology: New technologies which foster opportunities can also be threat as its implementation can raise the cost also will increase the risk factor. As said by (Viktor 2011) companies are forced to find newest technologies in a wide range of areas, either high or poor state of technology adopted by the company or its participants can seriously affect construction performance.

4.2. Company mission:

Salfordia has got 10-15 years of experience and has got its own processes and procedures. It aims to fulfil the requirements of the client and deliver the project within given budget. The company keeps a high efficiency in quality of project. It provides good and excellent service to the client which makes Salfordia ensure that they will always be client's first choice for future projects. It also maintains good standards in standard of service in commercial as well as industrial projects. As said by Forest R.David and Fred R. David (2003), a mission statement can be defined "enduring statement of purpose that distinguishes one organisation from other similar enterprises." The organisation should describe its goals and how can they be achieved and also give precedent for their success which are different from the similar enterprises. They have also stated in their Journal that business week reports that firms with eloquent mission statement benefit by 30% higher returns than those that lack such document.

4.3. Company vision:

Salfordia aims to be the market leader in the field of construction. It is currently undergoing its work through 'traditional' form of procurement and also interested in looking for alternative procuring options. It is keen to investigate collaborative contractual agreement. The goals that have been set for Salfordia are to build a collaborative culture within the organisation and culture.

Task 2 :

5. Proposal of Change in Management:

Change can be said to be a process of becoming different from what is current position. When in organisation it shall affect all the members sharing the same culture. Culture usually relates with the roles and relationships between the members of the organisation.

Change in Salfordia's Organisational Chart

CHAIRMAN OR BOARD OF DIRECTOR

HUMAN RESOURCES MANAGER

FINANCE MANAGER

BUSINESS DEVELOPMENT MANAGER

MARKETING MANAGER

ESTIMATION MANAGER

QUALITY CONTROL

REGIONAL HEAD OF AREA (PROJECT ENGINEER)

SUB-CONTRACTOR

SUB-CONTRACTOR

SUPERVISOR

PROJECT - A

SUPERVIOR

SUPERVISOR

PROJECT - C

PROJECT - D

SUPERVISOR

SUB-CONTRACTOR

SUB-CONTRACTOR

PROJECT - B

Fig 4. Proposed - 'Diversified Structure' for Salfordia Company.

A proper communication between the employee and employees facilitates good working conditions and thus stimulates an appropriate culture. It also aids decision- making and persuade to take liability of the commitment towards work. Problems can arise if culture is not suitable for organisation or the members fail to adopt the culture of organisation. The organisational structure above is proposed in view that if Salfordia undergoes collaboration, it will have an established administrative system and management will have the capacity to support and motivate staff. It will not only work for one region but opportunities will open to work in other regions. Project engineer will be the head of a region and will be in co-ordination with the management team as well as the technical staff. Company will have a good co-ordination system between its main office and regional office. The communication systems will be intact due to various facilities like e-mails, video-conferencing, and mobile phones. The company follows a diversified structure. As project engineer (head of the region) will be under the power of head office, the co-ordinating mechanism of company is limited vertical decentralisation. In such a structure middle line of an organisation plays a very crucial role, which in the above structure is the project engineer. The working pattern is formal.

5.1Generic Change Models:

Learning Organisations to develop appropriate strategy:

The term 'organisational learning' is often used interchangeably with the term 'learning Organisation'. The difference according to Tsang (1997) is that

''Organisational learning is a concept used to describe certain types of activity that takes place in an organisation while the learning organisation refers to a particular type of organisation in and of itself. Nevertheless, there is a simple relationship between two - a learning organisation is one which is good at organisational learning.''

As explained by Garwin (1993.P.80), learning organisations should be skilful at their creative abilities, also good at acquiring, transferring the knowledge which can adapt to different behaviour in order to reflect new knowledge. Organisations should have a proper management in collecting proper data for particular task to create a proper documentary and store it for future use and also keep it passing so that it will be useful for everyone in the process of learning. This will help every member of the organisation to play a part in generating of new knowledge and then help evaluate a worth. This will play an important role in driving new knowledge on individual level. Then this knowledge and learning can be used for driving innovation in process and procedure which will in return benefit the organisation.

Kurt Lewin's change model:

Becoming motivated to change

Changing what needs to be changed

Restoring New Mindset and Comfort Level

Fig.5: Lewin's three step change model

1. Unfreezing: This stage is about getting ready for change. Unfreezing is about making the members if the organisations understand that change is required. Two types of forces emerge driving force which is promoting change and restraining force which is stopping the movement.

2. Transition: Convincing people to shift their current behaviour of work and make them understand the benefits of the change. This change will undergo providing members of the organisation with training, new perspective in order to have a new point of view.

3. Refreezing: Refreezing is the stage where an organisation gets stability. Establishment of new rules and behaviour and are accepted. This stage balances the forces created by driving and restraining forces.

5.1Implementation Plans:

For an organisation, management plays an important role. Managers have to face challenges and also go through a various situations leading to burden of work, if succeeded gets definitely rewarded. Looking at an organisation in a different perspective can shape the understanding and further influence on its "success". For an organisation which is planning or aiming to adopt certain change in management and will also have to polish enhance their management skills. The prospective mangers have to show their interest and determination to adapt the change and contribute towards their future effectiveness. This leads to mangers to be aware and knowledgeable about the changes or of expected inputs of functions in organisation and also open to change in the established structure.

In implementation plan steps taken are assumed to be beneficial to the current organisational structure in the manner to improve the performance and also face the challenges of change in organisation. An organisation has always something to learn from the organisation in spite of having a unique structure and established procedures, which varies not only in quantity, quality and resources deployed and outcomes achieved but also in its "culture".

Resources are used in order to achieve the common objectives of the members of organisation, its clients and customers. This is achieved by providing members of organisation a training on mental and physical skills, the roles, tasks & actions of individual in particular objective. The members seek to incorporate their interest as far as they discover that it has a purpose.

Every organisation experiences a significant amount of change. After careful considerations of the SWOT analysis it was found that few strategies in the company should be enhanced to face the change. A more detailed approach for implementing change is created by Kotter's eight step models (1996). Kotter's eight step model follows from the errors in leading change which are as follows:

Establishing a sense of urgency,

Form a powerful coalition,

Developing a vision and strategy,

Communicating the changed vision,

Empowering broad-base action,

Generating short-term wins,

Consolidating gains and producing more change,

Anchoring new approaches in culture.

Kotter's eight step model will now give a detailed description for company to undergo change. This will be used to support the SWOT analysis done for the company. According to kotter, it is very essential to follow the eight steps in exact sequence. The first four steps will create an environment for change which can be linked with 'Unfreezing' process by Lewin's, following three steps will engage the whole organisation in change, and the last step will endure the change.

1. Establishing a sense of urgency:

In this stage, it is important to convince the senior leaders of the company that the change is required. This will be carried out by the examination of the current market trends and make them aware of the competitive realities. Communication is the most crucial factor and so people on the organisation should communicate with each other which will help to establish the urgency and make people aware of the need for change. This will be very crucial as management is established for 10-15 years they are resistant to change. This reluctant nature of company's senior members results one of the weaknesses, according to SWOT analysis. To overcome this weakness and achieve this, the head of the company will describe the staff about the following points:

Identifying the problem and introducing the opportunities that will benefit,

Discuss about the potential threats and develop scenarios showing what could happen in future

Requesting support from customers, outside organisation and industry people to strengthen your argument.

2. Creating the guiding coalition:

Kotter second step is creating the guiding coalition. This is usually authorised by senior leaders or key people of the company. In Salfordia, Board of directors are the key people which will engrave the senior leadership. As a senior leader empowers this coalition, they should be able to take strong leadership. Once the guiding coalition has been formed, senior leaders should stay actively engaged in it. It is very important to appoint right individuals to the coalition and structure the coalition properly. According to SWOT analysis, Salfordia has got good teamwork abilities and is one of the strengths of the company. Achieving this step is not a difficult task for the company. The guiding coalition must follow the following steps:

Assemble the team and encourage them within the guiding coalition.

Guiding coalition must have right individual at right level of organisation should encompass position, expertise, credibility and leadership.

3. Developing a vision and strategy:

The next step is developing vision and strategy. This stage will give organisation future look of the organisation. It will help the organisation in knowing the way in which change is required and also guide them to follow their senior leaders. The senior leaders of the company and the guiding coalition must be capable of communicating the change vision in five minutes, thumb rule by Kotter (1996, P.78). In order to achieve vision and strategy, identifying the areas of change, provide real and relevant examples for measuring success and demand to long-term interest of organisational structure is must. A successful change should have vision and strategy in the following manner:

Create vision to help form the change.

Develop strategy for achieve the desired vision.

4. Communicating the changed vision:

This is very important stage which requires communicating frequently and powerfully with the staff of the company. The senior leaders will have to call for meetings, conferences and also conduct workshop to talk about the change. The vision should be incorporated regularly in daily discussions, making decisions and solving problems. This regularity will help staff to remember and respond to it. According to SWOT analysis Salfordia has got Innovative abilities which will help them to create a vision. Also they gave got problem solving abilities which will help them to use their vision regularly in their strength which form important parts for this stage. To achieve this, following measure can be taken:

Vision to be applied in all the part of operations i.e. from providing training to reviewing performance.

Talk openly and regularly about the change vision.

5. Empowering Broad-base action:

In this, your staffs have reached the stage where they want to achieve the benefits that higher authority is promoting. In this stage leaders in Salfordia Company have to identify if any of the members are resisting changing. Structural blockers should be investigated. Hence they have to set up the structure and persistently investigate if there are any obstacles to it. Salfordia will need people to execute the vision which is only possible by removing the barriers which will help change to move forward. According to SWOT analysis, this might be a crucial stage as board of directors are resistant to change which is one of the weaknesses. In this stage senior leaders have to be strong and identify the barriers that come in the way of change and remove them. Following actions can be taken:

Analyse the structure and functions of organisation to ensure they are in line with your vision.

Reward people for making change happen.

Investigate and change leaders who are resisting the change to happen.

Quick actions to be taken to remove barriers

6. Generating short-term wins:

It becomes very important for creating short-term wins in the company. The company is established successfully for last 10-15 years so the people are comfortably working a sudden change will put them into the fear. While facing the change it is very important to introduce an early success in the process. If this is not done negative thinkers and barriers try to stop your progress. If short-term targets are set and less room for failure is kept it will motivate the staff and help them to keep contributing to the overall change effort. According to SWOT analysis, performance is one of the strength of the company which will help to achieve the short-term win. Also following steps can be taken:

Reward people involved in change

Make it difficult to negative thinkers and barriers to block more change

Build momentum and creates supporters

7. Consolidating gains and producing more change:

Quick wins are required just at the initial stage of what needs to be achieved for long-term change. Many change projects fail because victory is declared too early as said by kotter (1996). It is very essential for company to extensively keep looking for improvements. According to SWOT analysis, the company believes in quality of service and once the change is brought this opportunity will help them to achieve this stage. Following steps can be taken:

Analyse of what went right and what needs improving should be done after every success.

Set goals to continue building on the momentum you have achieved.

Introduce new change agents and leader for your change coalition.

8. Anchor new approaches in culture:

Finally to stabilise, 'the change' has to become a core of an organisation. The company has to necessarily show the values regularly that are behind the vision. Constant efforts to make sure that change is seen in every aspect of the organisation, which will give change a concrete place in organisational culture. The leader of the company should support the change. Leaders of Salfordia should share the experiences of past success with the staff and reiterate it,with every chance the senior leaders gets. This will help changes to anchor its new position. Salfordia has got a clan culture and hence has got a very friendly environment. It is also a well established and has been successful in their past projects. These qualities will help them to achieve this stage. The two important factors to institutionalise change in corporate culture given by Kotter (1995) are:

The first is to make a conscious attempt to show people how the specific behaviour and attitudes have helped improve performance.

The second is to make sure that the next generation of the leaders of organisation embody the new behaviour and attitudes.