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Nowadays, there are many crises and challenges in this business world, it is impossible for enterprise to gain high profits and performance as usual by using lower labor/ material cost only and operating in an inflexible way, since the environment keeps changing unexpectedly and rapidly. To command excellence in R&D competency, key techniques of manufacturing and professional skills in business management, and to track changes in both the internal and external environment are the best ways to help the enterprise develop core competitive advantage which will be sustainable and to survive competitively (D'Aveni, 1994). Hence, organisational change becomes a very important topic for business development currently.
Usually, organisational change occurs when an organisation feels stress from internal and/or external pressure which is out of their control and then realizes the importance of change; then they start to re-structure their resources and try to increase competency to improve effectiveness and create added value. The purpose of change is to make organisations grow and improve and to reinforce competency in survival and also to make the organisation flourish.
However, change is not a fixed behavior; it has various types according to different situations. Different kinds of change require different strategies and plans to cope with it, a good strategy is key to leading successful change which can help an organisation to effectively gain employee engagement and acceptance of change (Tucker, 2007). Typically, the types of change include (Robbins, 2003):
redistribute the mission
The theory -
Organisational change is a complicated and dynamic process; it needs to be guided by a systematic theory. Therefore, Management Psychology has provided some effectual theory models according to different types of change. However, Lewin's change model and Kotter's change model are the most influential of these theories.
Lewin's change model
Lewin (Lewin, 1943/4) says 'There is nothing so practical as a good theory'. He states that 'change' is the strength which maintains the stability of the system which has changed; the organisation is affected mainly by two strengths, one is the strength for maintaining the existing circumstances, another one is the strength for organisational change. For the organisation to have the impetus for change, then either the first strength should be reduced or the second strength should be reinforced. In Lewin's change model, there are three stages (Schein, 1995) which tend to explain and indicate how to start, manage and steady the process of change and make change successful.
Stage 1: Unfreeze
The focus of this stage is to create the motivation for change; it is aimed at encouraging the employee to change behavioral modes and working attitudes from the original into the new strategy of organisational development. To accomplish this process, on the one hand, the company needs to deny previous behaviors and attitudes, on the other hand, it needs to make employees aware of the urgent requirement to change and establish a sense of urgency.
In this unfreezing process; it can be carried out by using the comparison of evaluating, to compare the overall circumstances, operating index and performance level with other outstanding units or competitors. Then try to find out the basis of these differences and unfreeze, help the cadre employee to 'unfreeze' present attitudes and behaviors, to ask for change urgently and be willing to accept the new working mode. Moreover, a notable thing is to create an open atmosphere and the sense of psychological security, to reduce the psychological obstacle to change and enhance the confidence to change successfully.
Stage 2 : Change
Change is a process of learning, it needs to provide new information, new behavior modes and new angles for cadre employee, clearly in indicating the direction of change and put it into practice and then to be formed as a new behavior and attitude . In this stage, it should be noticed that to establish a model for working attitudes and behaviors, it is useful to use methods such as role modeling, expert presentation and group training. Lewin indicates that change is a process for cognitive learning; it is achieved by acquiring new conception and information.
Stage 3 : Refreezing
The freezing stage, essentially means the reinforcement of the change and to embed the new attitudes and behaviors, and make the stability for organisation change. To ensure the stability of organisational change and to provide positive reinforcement, also to increase the stability of group behavior in change, then materialize a stable and permanent norm for group behavior.
Figure 2-1: Lewin's Change - 3 stages model
Kotter's 8-step change model
The change management expert Kotter states that usually, organisational change failure is because of some mistakes, such as:
Have not built the sense of urgency for change
No particular team for handling the change during the process
No certain vision to indicate the change and efficient communication
No organized plan for short term gains
No certain strategy for organisational culture change
According to these failings, Kotter states the eight steps change model to indicate the norm for organisation change. The research of Kotter's model (Borkowski, 2005) shows that the probability of success is around 70% ~ 80% to make a successful change due to the efficient change management and 10% ~ 30% from the effort of administrative department. The 8 steps are:
Establish a sense of urgency
Set up a powerful guiding association
Develop a vision
Communicate the vision
Empower others act on the vision
Plan for and create short-term wins
Consolidate improvements and produce more change
Institutionalize new approaches
The definition and impact of change
What is 'change', it means to damage and break the traditions, because of this feature, the action of change is often resisted by employees. Whether the change is acceptable for the employees or whether the direction of change is suitable for dealing with the pressures brought by the external environment will also affect the success of the change implemented.
One of the impacts is the effect to employee who is the most valuable resource in organisation. During the change, the employee can be confused by new process and policies in the beginning of change and the period will even longer if organisation cannot apply the good strategy for its change. In this stage, employee always gets angry to organisation and highly anxious about their future responsibility and position in organisation (Emerson, 2010). However, employee still needs to assimilate the change if they want to survive in the organisation; therefore, there is a process which people tend to go through their emotion (see figure 3-1).
Figure 3-1: The process of change
Source: Atos Origin (2010)
The importance of change
Growing market share and then maintaining it is clearly an issue for business sustainability (Hawkins, 2006); however, change always happens, and will not disappear nor dissipate. Technology, civilization and creativity will maintain their ever-accelerating drive onwards (Paton, et al., 2008). Every organisation needs to be innovated after a period of operating even it was in a perfect structure, then through the change to adapt to the requirement from new internal or external conditions.
Organisations should treat the process of change as a regular activity for organisational development, and also see it as an issue which cannot be avoided; to catch the good timing for change becomes an important symbol of an effective management. Knowledge can be generated anywhere in the organisation and it can be learned by both an organisation and an individual person/group if they are prepared to learn from it. Through the change, the organisation could learn shortcuts, experience, and improvements introduced by its member from tacit knowledge (Clegg, et al., 2005).
Furthermore, organisation change can enhance competitive for an organisation since the organisation can be changed and adjusted according to trend or stream of market. Organisation structure is the foundation of a company, the manager need to analyze it and restructure it to help the organisation maintain the best flexible space; and then change and adjust the structure to meet the various changes and challenge from external environment. Due to this capability, the organisation can be more competitively to its competitor.
The definition and characteristic of organizational culture
Organizational culture is an essential element in peoples understanding of organisation. In a general explanation, it is 'the particular set of values, beliefs, customs and system and systems that are unique to that organisation' (Burnes, 2004); and also, it is a term that includes many organizational subcultures (Clegg, et al., 2005). To define it more precisely that organization culture is that the concept of philosophic, ideology, beliefs, feelings, attitudes, values, basic assumptions, expectation and norms that are shared by organisation members (see figure 5-1).
Figure 5-1: Components of organisation culture
The characteristics of organisational culture (Robbins, 2003).
Open System Focus
The importance of organisational culture
Although, the argument 'a successful culture is one based on values and assumptions appropriate to the environment in which it operates' is put forward by the proponents of Culture-Excellent (Burnes, 2004). However, the role of organizational culture is critical in motivating innovative behavior; when face to a challenge environment, the organisation needs to encourage innovation, creative and competition, to open the new market and expand it. Organisation culture is also a network of cooperation; it asks to create cooperation, coordination and communication between both of organisations and employee.
Furthermore, organisation culture needs to seek a working attitude of conscientious; it is related to quality, and one of the aspects of quality management is to ask employee conscientiously in working. The organisational internal culture has many types and it is operated according to its characteristic and it causes different ways for handling it. A well combination of knowledge management and organisation culture can bring benefit to organisation.
Change is regularly happened to the organisation and in various types; to solve the problem and make business sustainability, the organisation needs to understand the real problem then apply for the solution accurately. There are some samples that show the successful change to the organisation.
Hallmark Card, Inc.
Hallmark Card Company has a 55% market share in the United States, however, some competitors emerged in the 1990s to sell the products in low-price strategy or particular type card. Although, Hallmark Card Co. has the biggest team for creating new designs; over 700 hundred employees who can design 24,000 cards each year, but it takes 3 years to become available in the market. The time for delivering the information of requirement from customer to designer was long; inefficiency caused the company not to be able to cope with problem in a timely fashion.
The company made up a team with a hundred supervisors to provide 100 related suggestions for rising efficiency and tended to change the process for company. In the past, the company was using the structure based on function; but the new team is a multi-function structure. The team consists of a designer, writer and editor who were from different departments to try to enhance the efficiency and generate more new ideas.
Furthermore, the team members started to work together from the first stage of designing a card, they help each other to evaluate the product and provide the information of consumer needs. The company also imported highly sophisticated products for controlling the purchase system; the company can get the newest data about the record of goods sold and its classification and aim to design more cards which customers like.
GM and Toyota gave the new life for factory
In 1963, the productivity and quality in Fremont motor factory was not good, the employees drugs misuse, alcohol abuse and high absentee rate meant that the company needed to hire hundreds of extra workers to keep the production line working. In 1983, GM and Toyota established a joint venture and cooperated to re-operate the Fremont. In the next year, NUMMI started the operation again with a Japanese management team.
The works are divided into 350 teams and there are 5-7 people with a team leader for each team, every worker can be a deputy to each other.
Everyone is trained in doing the process of working analysis, to build the capability for self-improve the relationship between workers and the mission.
Team members have to organize team work and record the time for each process and try to find out a better way to achieve the same goal.
The new team not only does working analysis but also needs to oversee the product quality.
The manager supports basic worker, but he's not there to monitor or order the worker.
No policy to lay off employees so there is an opportunity to retrain employees intensively for other roles; they use the features of flexible team working and let workers control the production line rather than manager.
"Continuous change" is the only thing which is constant in the environment, but it does not mean a negative thing or will necessarily cause loss to both the organisation or individual persons/groups. Change is not only about organisation but also related to individual person or group, they are interdependent. From above cases, it shows obviously that change cannot be achieved by either role; each needs to complement each other to reach the best performance and also achieve win-win situations.
To face and deal with the problem, besides building a good strategy for the organisation, people also need to be aware of the changes around its environment, and to improve or raise the competency for adopting change. A well-prepared strategy helps organisations to practice change systematically and can also assistant its employees to adapt to the new system easily and persuasively; then, because of a systematic process, employees can gain more skills and increase their capability. Relatively, a well-trained employee has more competencies to give an organisation, an impetus to the program to organisation change, and makes the process of change able to be run successfully.