The Employee Reaction Toward Organizational Change Commerce Essay

A force drive change is always exists since the Industrial Revolution changed the nature of work. Whether to improve efficiency or create better working environment and productivity has been the base in many organizations. Managers and consultants are continually looking for ways to improve it. Employee dissatisfaction and conflict have also become important farces that push the need for change. At the same time, societal and political forces, such as the fall of communism, increased competition, privatization, and deregulation have an important role.

The response of employees to change is hard to be predicted as well, as many factors may have an effect on this.

The research investigates the effect of organizational culture to the perception of employee for organizational changes; where organizational culture is characterized by Hofstede cultural dimensions.

One of the biggest obstacles to the success of any planned change is employee resistance. Resistance affects a change program. People generally resist change because of its negative consequences. Every person reacts to change differently. The leader of the organization needs to identify the different responses of the employees and be able to deal with their issues and concerns. The most important response that the leader must be prepared for is resistance. Employees may perceive change as endangering their livelihoods and their workplace social arrangements, or their status in the organization. Others know that their specialized skills will be rendered less valuable after a major change.

The research tries to find the relation between organizational culture where employees used to work, and the organizational changes.

Hofstede dimensions is used to characterized the organizational culture to and relate kind of organizational culture with employees attitude to change.

Research Objectives

The research has objective of finding the relation between organizational culture and response to organizational change; the research, will determine which one of Hofstede cultural dimensions has larger weight affecting the employee’s reaction for change, as well as how organizational culture can affect response to change.

Research Hypotheses

The Research is based on two hypotheses; each of them is related together.

First, considers the organizational culture and its characterization with Hofstede cultural dimensions; while the second relates organizational culture with organizational change.

The two hypotheses are:

H1: Organizational culture is characterized Hofstede cultural dimensions.

H2: employee’s response to change is related with organizational culture.

Conceptual Framework

Many models and theories have been developed trying to look at organizational change; each is looking the process from different point of view.

The modern models for organizational change are:(Kezar, 2001),(Cameron , Green, 2004)

Evolutionary

Teleological

Life Cycle

Dialectical

Social Cognition

Cultural

Bullock and Batten, planned change;

Kotter, eight steps;

Beckhard and Harris, change formula;

Nadler and Tushman, congruence model;

William Bridges, managing the transition;

Carnall, change management model;

Senge, systemic model;

Stacey and Shaw, complex responsive processes;

Some of these approaches are discussed later; while the research is based on relating these approaches, with Hofstede cultural dimensions:(Harris, Moran , Moran, Judith, 2004)

1. Power distance

2. Uncertainty avoidance

3. Individualism

4. Masculinity

Research has the roadmap as illustrated in Figure 1 .

Organizational culture

Organizational Change Process

Hofstede cultural dimensions

Characterization of organizational culture

Drivers of organizational change

Employee reaction

Figure 1

Research road map

The above figure illustrates how research theoretical framework is constructed, based on this and beginning with the concept of organizational change, forces behind organizational change is searched , its types, and theories explaining organizational changes, as well as employee’s response to that change.

On the other hand, Hofstede cultural dimensions are studies to formulate the hypothesis linking these two concepts together.

A survey is then investigates the validity of these hypothesis, in the same time if valid it will results in weight of each dimension on the response of change.

Research structure

The research is constructed from five chapters; first chapter introduces a research problem statement; research objectives and conceptual framework; the second chapter introduces a literature review about the organizational change, Hofstede cultural dimensions, and employee’s response to change, the operational definitions are stated with the most suitable form research point of view.

Chapter three discussed the research methodology, method, and sampling; data collection plan and data analysis is stated as well.

Findings of the research are presented in chapter four, as well as the analysis of the data.

Finally, chapter five is the conclusion ad recommendations.

Chapter 2

Literature Review

Introduction

In this chapter, a review of literature is introduced; the review includes references of books and scientific publications in recent years.

As well, definitions of keywords are introduced, based on operational definitions of terms used in the research.

What is Organizational change?

Organizational change can be defined as “the difference in form, quality, or state over time in an organizational entity”.(de Ven, Andrew, 2004) where Culture is defined as a set of meanings and values shared by a group of people.(Alvesson, 2002), so relating the organizational change to organizational culture we can define organizational culture as a specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization. ; the research will define the point under consideration of resistance to change as a Negative emotional, cognitive, and intentional responses to change (de Ven, Andrew, 2004) where magnitude of change is the magnitude of change represents a continuum ranging from fine-tuning changes, such as employee training, to radical organizational changes, such as reengineering and mergers. Changes (Pasmore, Woodman, 2007).

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Organizational change models

Modeling the process of change is an important issue; this modeling can facilitate the process of monitoring change, assessing the results (for both Macro and micro levels); models also can explain the reason behind changes happen, it’s driving forces, and it’s consequences.

The following sections discusses the early theories addressed the organizational change, followed by discussing the modern theories.

Categories of Theories and Models of Organizational Change

Evolutionary model

The model assumes that the change process is dependent on circumstances, situational variables, and the environment faced by each organization. Social systems as diversified, interdependent, complex systems evolve over time naturally. However, evolution is deterministic, and people have only a minor impact on the nature and direction of the change process. The model focus on the inability of organizations to plan for and respond to change, and their tendency to “manage” change as it occurs. The emphasis is on a slow process, rather than discrete events or activities. Change happens because the environment demands change for survival. The assumptions in these theories range from managers having no ability to influence adaptability to managers having significant ability to be proactive, anticipating changes in the environment.

As seen ; The theory ignores important environmental variables, and ignores the complexity of organizational life (Kezar, 2001) by focusing on a few factors within the external and internal environment, such as resources and size of organization. Environmental disturbance and constraints are overemphasized.

Teleological model

The model assumes that organizations are purposeful and adaptive.

Change occurs because leaders, change agents, and others see the necessity of change. The process for change is rational and linear, as in evolutionary models, but individual managers are much more instrumental to the process. Internal organizational features or decisions, rather than the external environment, motivate change.

Key aspects of the change process include planning, assessment, incentives and rewards, stakeholder analysis and engagement, leadership, scanning, strategy, restructuring, and reengineering.

At the center of the process is the leader, who aligns goals, sets expectations, models, communicates, engages, and rewards. Strategic choices and human creativity are highlighted.

Goal formation, implementation, evaluation, and modification based on experience are an ongoing process. New additions to the repertoire of management tools include collaborative culture definition, large group engagement processes, and individual in-depth interventions. The outcome of the change process is similar to that in evolutionary models: new structures or organizing principles.(Kezar, 2001)

Based on above , it can be concluded that , the model analyzes the change process strategy as based on technological terms like reengineering, planning, assessment, restructuring; which is more realistic than other psychological terms like motivation.

It also assumes that the process of change is controllable by managers and stockholders.

The emphasis on the role of people and individual attitudes to the change process was introduced, especially in research on resistance to change. The ability to, at times, forecast or identifies the need for change was an important contribution, helping organizations to survive and prosper in what otherwise would have been difficult times.

The main criticisms relate to the overly rational and linear process of change described within the model.

Researchers of second-order change demonstrate a chaotic process and find management models to be lacking needed information on the importance of culture and social cognition.(Kezar, 2001)

Dialectical model

The model assumes that organizations pass through long periods of evolutionary change and short periods of revolutionary change, when there is an impasse between the two perspectives. An organization’s polar opposite belief systems eventually clash resulting in radical change. Conflict is seen as an inherent attribute of human interaction. The outcome of change is a modified organizational ideology or identity. Predominant change processes are bargaining, consciousness-raising, persuasion, influence and power, and social movements. Leaders are the key within any social movement and are a central part of these models .collective action is usually the primary focus. Progress and rationality are not necessarily part of this theory of change; dialectical conflict does not necessarily produce a “better” organization.(Kezar, 2001)

It is seen that, this model provided explanation for regressive change and highlighted irrationality.(Kezar, 2001)

The model does not take the effect of the environment upon the change processes.

Cultural model

Most models of change describe organizations as rational places with norms and rules. The major contribution of cultural models to the change literatures their emphasis on irrationality (also emphasized in dialectical models), the spirit, or unconscious, and the fluidity and complexity of organizations.

The model assumes that change occurs naturally as a response to alterations in the human environment; cultures are always changing. Cultural and dialectical models often overlap with the image of social movements as an analogy for cultural and political change.

The change process tends to be long-term and slow. Change within an organization entails alteration of values, beliefs, myths, and rituals.

There is an emphasis on the symbolic nature of organizations, rather than the structural, human, or cognitive aspects emphasized within earlier theories. History and traditions are important to understand, as they represent the collection of change processes over time.(Kezar, 2001)

Change can be planned or unplanned, can be regressive or progressive, and can contain intended or unintended outcomes and actions.

Change tends to be nonlinear, irrational, non-predictable, ongoing, and dynamic. Some cultural models focus on the leaders’ ability to translate the change to individuals throughout the organizations through the use of symbolic actions, language as the key to creating change. If there is an external motivator, it tends to be legitimacy, which is the primary motivator within the cultural model, rather than profit or productivity, which exemplify the teleological and environmental models.

It is obvious that the model simplifies the culture as it can be easily handled or understood; but this actually not the case; other complex models to handle culture effect on change is introduces but not easy to apply.

Organizational change theories and models

(Cameron , Green, 2004)

Lewin, three-step model: organism, machine

Kurt Lewin developed his ideas about organizational change from the perspective of the organism metaphor. His model of organizational change is well known and much quoted by managers. Lewin is responsible for introducing force field analysis, which examines the driving and resisting forces in any change situation. The underlying principle is that driving forces must outweigh resisting forces in any situation if change is to happen.

it assumes that ; if the desire of a manager is to speed up the executive reporting process, then either the driving forces need to be augmented or the resisting forces decreased; or even better, both of these must happen.

Lewin proposed that organizational changes have three steps. The first step involves unfreezing the current state of interactions. This means defining the current state, surfacing the driving, resisting forces, and picturing a desired end-state. The second step is about moving to a new state through participation and involvement. The third step focuses on refreezing and stabilizing the new state of affairs by setting policy, rewarding success, and establishing new standards.

Figure 2

Lewin’s three-step model

Source: Lewin (1951)

Lewin’s model is good, and can be considered as a fundamental base for further study or theory

The model is seen as plan of actions, which can be used to make the change, rather than a model of change Model. It also ignores the assumption of the organism metaphor that “groups of people will change only if there is a felt need to do so”. (Mills, Dye and Mills, 2009) The change process can then turn into an un-well studied plan that does not tackle resistance and fails to harness the energy of the key players. The effect of culture also is ignored in this model.

Bullock and Batten, planned change: machine

Bullock and Batten’s (1985) phases of planned change draw on the disciplines of project management; there are many similar ‘steps to changing your organization’ models.

This particular approach implies the use of the machine metaphor of organizations. The model assumes that change can be defined and moved towards in a planned way. A project management approach simplifies the change process by isolating one part of the organizational machinery in order to make necessary changes, for example developing leadership skills in middle management, or reorganizing the sales team to give more engine power to key sales accounts.

this approach implies that the organizational change is a technical problem that can be solved with a definable technical solution. The approach also simplify the process of change , but it can not handle complex situation for organizational change , i.e. when organization has complex situation of changing where change drivers and forces are unknown

Kotter, eight-steps: machine, political, organism

Kotter’s (1995) proposed ‘eight steps’ to make change in organization; his model is derived from analysis of his consulting practice with 100 different organizations going through change. His research highlighted eight key lessons, and he converted these into a useful eight-step model.

The eight steps are:

Establish a sense of urgency, ‘felt-need’ for change.

Form a powerful guiding group. Assembling a powerful group of people who can work well together.

Create a vision. Building a vision to guide the change effort together with strategies for achieving this.

Communicate the vision. Kotter emphasizes the need to communicate at least 10 times the amount you expect to have to communicate. The vision and accompanying strategies and new behaviors need to be communicated in a variety of different ways.

Empower others to act on the vision. This step includes getting rid of obstacles to change such as unhelpful structures or systems. Allow people to experiment.

Plan for and create short-term wins. Look for and advertise short-term visible improvements. Plan these in and reward people publicly for improvements.

Consolidate improvements and produce still more change. Promote and reward those able to promote and work towards the vision. Energize the process of change with new projects, resources.

Institutionalize new approaches. Ensure that everyone understands that the new behaviors lead to corporate success.

This eight-step model gives more defined and detailed procedure for change process; the steps are clear and well defined; but it may take more time to implement and, maybe, it would be difficult to follow strictly. The approach did not refer to the situation of inability of achieving one-step; and how it can be handled.

Beckhard and Harris, change formula: organism

Beckhard and Harris (1987) developed a formula of change that defines some parameters to take into consideration Figure 3.

Figure 3

Source: (Cameron , Green, 2004)

Factors A, B, and D must outweigh the perceived costs X for the change to occur. If any person or group whose commitment needed is not sufficiently dissatisfied with the present state of affairs A, eager to achieve the proposed end state B and convinced of the feasibility of the change D, then the cost X of changing is too high, and that person will resist the change.

Resistance is normal and to be expected in any change effort. Resistance to change takes many forms; change managers need to analyze the type of resistance in order to work with it, reduce it, and secure the need for commitment from the resistant party.

The formula is sometimes written (A x B x D) > X. This adds something useful to the original formula. The multiplication implies that if any one factor is zero or near zero, the product will also be zero or near zero and the resistance to change will not be overcome. This means that if the vision is not clear, or dissatisfaction with the current state is not felt, or the plan is obscure, the likelihood of change is severely reduced. These factors (A, B, D) do not compensate for each other if one is low. All factors need to have weight.

This formula is simple but in the same time useful. It illustrates the factors affecting change process; if each party in the process applies in this formula, it will help determining the weak points, and help enhance the performance in each phase of change.

On the other hand; the formula gives each factor the same weight, and did not correlate any of these factors together; which may be in accurate.

Stacey and Shaw, complex responsive processes

There is yet another school of thought represented by people such as Ralph Stacey (2001) and Patricia Shaw (2002). These writers use the metaphor of flux and transformation to view organizations. The implications of this mode of thinking for those interested in managing and enabling change are significant:

Change, or a new order of things, will emerge naturally from clean communication, conflict, and tension (not too much).

As a manager, you are not outside of the system, controlling it, or planning to alter it, you are part of the whole environment.

In Patricia Shaw’s book Changing Conversations in Organizations, rather than address the traditional questions of ‘How do we manage change?’ she addresses the question, ‘How do we participate in the ways things change over time?’ This writing deals bravely with the paradox that ‘our interaction, no matter how considered or passionate, is always evolving in ways that we cannot control or predict in the longer term, no matter how sophisticated our planning tools’.

As a first look, the model seems to be passive one; it discards the ability of making change goes as we want; also, it assumes that change is an ongoing process by itself, we have no control upon it; all we have to do is to watch and participate in it with a limited role.

This can be translated to practical as follow:

Managers have to decide what business the organization is in, and stretch people’s thinking on how to adapt to this.

Ensure that there is a high level of connectivity between different parts of the organization, encouraging feedback, optimizing information flow, enabling learning.

Focus people’s attention on important differences between current and desired performance, between different styles of work and between past and present outcomes.

Characterization of organizational culture

On the other hand Hofstede cultural dimensions will be used to characterize the organizational culture and can be defined as psychological dimensions, or value constructs, which can be used to describe a specific culture (Harris, Moran , Moran, Judith, 2004). where Hofstede has defined 4 dimensions to define culture ,first is the Power distance is The extent to which a society accepts that power in institutions and organizations is distributed unequally.(Harris, Moran , Moran, Judith, 2004), second dimension is uncertainty avoidance, is the extent to which a society feels threatened by uncertain or ambiguous situations. (Harris, Moran , Moran, Judith, 2004), third dimension is Individualism, which is loosely knit social framework in a society in which people are supposed to take care of themselves and of their immediate families only.(Harris, Moran , Moran, Judith, 2004); and Collectivism, which is the opposite, occurs when there is a “tight social framework in which people distinguish between in-groups and out-groups; they expect their in-group (relatives, clan, organizations) to look after them, and in exchange for that owe absolute loyalty to it” .finally; masculinity is The extent to which the dominant values in society are assertiveness, money, and material things, not caring for others, quality of life, and people. (Harris, Moran , Moran, Judith, 2004)

Hofstede cultural dimensions

The pioneering work on cultural measurement could be credited to Hofstede (1980).

In the earlier stage, Hofstede identified four dimensions of culture and highlights the most important culture differences in a multinational organization. The four dimensions are individualism versus collectivism, power distance, uncertainty avoidance and masculinity and femininity. These four dimensions were initially detected through the comparison of the value among the employees and managers working in 53 national subsidiaries of the IBM Corporation.

Dr. Geert Hofstede, believes that “culture” counts and has identified four dimensions of national culture:(Harris, Moran , Moran, Judith, 2004)

1. Power distance: indicates “the extent to which a society accepts that power in institutions and organizations is distributed unequally.”

2. Uncertainty avoidance: indicates “the extent to which a society feels threatened by uncertain or ambiguous situations.”

3. Individualism: refers to a “loosely knit social framework in a society in which people are supposed to take care of themselves and of their immediate families only.” Collectivism, the opposite, occurs when there is a “tight social framework in which people distinguish between in-groups and out-groups; they expect their in-group (relatives, clan, organizations) to look after them, and in exchange for that owe absolute loyalty to it.”

4. Masculinity: with its opposite pole, femininity, expresses “the extent to which the dominant values in society are assertiveness, money and material things, not caring for others, quality of life, and people.”

Criticism of Hofstede’s cultural dimensions

Hofstede’s work on culture is the most widely cited in most of studies. His observations and analysis provide scholars with a highly valuable insight into the dynamics of cross-cultural relationships. However, his work does not escape criticism.

In this section, most of criticized points will be listed and discussed.(Jones , 2007)

Relevancy

Many researchers allude a survey is not an appropriate instrument for accurately determining and measuring cultural disparity. This is especially apparent when the variable being measured is a value which culturally sensitive and subjective. Hofstede addresses this criticism saying that surveys are one method, but not the only method that was used.

During the time of its delivery, there was very little work on culture, and at this time many businesses were just entering the international arena and were experiencing difficulties; they were crying out for credible advice. Hofstede’s work met and exceeded this demand for guidance.

This actually is very convincing for researcher to base their research on Hofstede’s work.

Cultural Homogeneity

This criticism is perhaps the most popular. Hofstede’s study assumes the domestic population is a homogenous whole. However, most nations are groups of ethnic units. Analysis is therefore constrained by the character of the individual being assessed; the outcomes have a possibility of arbitrariness. On the other hand, Hofstede tends to ignore the importance of community, and the variations of the community influences.

This critic is somewhat true; but if we will speak about the majority of groups within one culture; as well as the probability of being the individual have the common features of his culture, I do believe that is worth to pursue Hofstede’s work.

National Divisions

Nations are not the proper units of analysis, as cultures are not necessarily bounded by borders. Recent research (Jones , 2007) has found that culture is in fact fragmented across group and national lines. Hofstede points out however that national identity is the only means we have of identifying and measuring cultural differences.

This is true, as we can agree that “national identity” is not the only mean to measure cultural differences; but it is one of them, hence the model still valid , may be less accurate but reliable.

One Company Approach

A study fixated on only one company cannot possibly provide information on the entire cultural system of a country. Hofstede said he was not making an absolute measure, he was merely gauging differences between cultures, and this style of cross-sectional analysis was appropriate.

However, this international organization is worldwide spread, and is considered as a typical example of cultural diversity, so it worth to be considered.

Out-dated

Some researchers have claimed that the study is too old to be of any modern value, particularly with today’s rapidly changing global environments, internationalization, and convergence. Hofstede countered saying that the cross-cultural outcomes were based on centuries of indoctrination, recent replications (Jones , 2007), (Nakata, 2009) have supported the fact that culture will not change overnight.

Conclusion about Hofstede’s cultural dimensions

It is obvious that more research is needed to evaluate culture in terms of contemporary standards.

However, Hofstede’s work has controversy surroundings; the work is still quite high, as it remains the most valuable work on culture.

Based on the theoretical and practical value of Hofstede’s work, research hypothesis refers to its effect on employs reaction toward organizational changes; and this will be investigated.

Resistance to change

Resistance to change has been an important area of inquiry. In fact, the importance placed on this issue might lead one to believe that resistance is inevitable when change is being implemented. Newer research (Mills, Dye and Mills, 2009) indicates that this is not always so. On the contrary, some people embrace change and become bored and uninterested if change is not imminent. Some researchers (Wei , 2003) argue that the younger generations of workers are more used to a constant rate of change, are more adept at change, and actually expect to be moving forward constantly. Despite this, resistance to change can and does occur – just not all the time by everybody. Given that, resistance to change can be a very real problem for those leading change.

Patrick Connor and Linda Lake argue that; (Mills, Dye and Mills, 2009) people tend to resist change or alterations of the status quo. This resistance is broader than simple opposition to a particular change; more widespread than a particular group’s or individual’s refusal to accept a specific change. There is simply the wish in most people to maintain the consistency and comfort that the status quo holds. This generalized resistance to change stems from a variety of sources.

Although their theory of resistance is one of the many that seem to indicate all people will resist change all of the time, their framework is still quite helpful. It creates a framework for understanding why resistance may be happening, when it happens.

Employee’s response to change

There are three general forms of responses to system changes: (de Ven, Andrew, 2004)

Negative feedback loops. These system responses attempt to attenuate or eliminate the impact of the change on the system.

Positive feedback loops. These system responses magnify the impact of the change on the system. This can be in the form of switching (before, during, or after the event) to alternative structures or functions, increased disorder beyond what is directly produced by the change event itself and, if the increased disorder is extreme enough, either ”creative innovation” or ”collapse.”

No response. The system may give no apparent response to a given event: This may occur because either the group failed to note the event, or assumed it would not alter the group’s ”fitness landscape,” or, Some feature of the group’s history, its self-regulatory processes, and/or its routines prevented or impeded response. Alternatively, an apparent ”no response” may be an artifact of the observation process.