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Today's business environment is so dynamic that it prompts every organization to adopt change with respect to organizational behavior. The velocity of change is so quick that if business organizations don't accept the change and move with the change then they will left behind or overtaken by competitors, because of these factors there is a necessity of the concept known as "Change Management.'' Rapidly changing technology, increasing global and local competition and demographics made business organizations more aware of the usefulness of advice and on implementing specific kind of change in the business boundaries. Successful organizations take appropriate steps to maintain a compatible fit, this requires continual change.
The key purpose of this study is to vitally study the result of change in an organization and to give attention to on whether the change without consultation could ever be successful. This will be done by using organizational change theories and practical examples to prove whether prior consultation is beneficial component for successful change or not.
2.0 Change Management
''Change is nothing but to, alter, to make different, by substituting something else for, or by giving up for something else; from one state to another; as to change the position, character, or appearance of a thing; to change the countenance.'' (Anon., 2010)
2.2 Core Principals that revolves around change:
According to Barons & Greenberg (1990) there several principals about change:
People perception about change
Individual barriers to change:
Fear to Unknown
Threats to social relationship
Failure to recognize need for change
In addition Barons & Greenberg (1990) listed the following organization barriers to change:
Work group inertia
Threat to existing balance of power
Previously unsuccessful change efforts
According to Bennis, Benne, & Chin, R. (1985) there are several key drivers to change:
Nature of workforce
Changing social trends
3. Organizational Change Management
3.1. Organizational Change
Companies that are able to compete successfully in today's rapidly changing business environment-characterized by globalization of the economy, exploding information technology, downsizing, restructuring, and new employer-employee relationships-must be ready to make significant changes in the way they operate. Organizational change management concept refers to understanding your business organization and making the right moves to achieve your organization's real needs. The motivation for change typically stems from the fact that something isn't working-for example, continued negative feedback from customers, reduced profitability, threats of acquisition, or other market pressures.
According to Kurt Lewin (1947) there are three stages in change process:
a). Assessing the current situation
b). Diagnosing possible resistance
c). Preparing the ground
d). Communicating intentions
a) Selecting strategies
b) Selecting the timescale:
c) Create an awareness of the need for change based on facts.
d) Making the resources available
a). Institutionalise the change
b) Stabilizing the organization after the change occurred appendix2
3.1.1 TYPES OF CHANGE
Changes in an organization can often be identified as one of four types, with the definite possibility of overlap among them:
Operational changes affect the way the ongoing operations of the business are conducted, such as the automation of a particular area.
Strategic changes occur in the strategic business direction, e.g., moving from an inpatient to an outpatient focus.
Cultural changes affect the basic organizational philosophies by which the business is conducted, e.g., implementing a continuous quality improvement (CQI) system.
Political changes in staffing occur primarily for political reasons of various types, such as those that occur at top patronage job levels in government agencies
Different kinds of change require different strategies and plans to increase employee engagement and acceptance of change. The two types of change that occur most frequently in organizations are listed below:
3.1.2 Need for change
Recognizing the need for change is the primary objective of most of the business organizations. Some organizations are good at anticipating the need for change, these organizations benefit because they have the time to investigate the emerging problem and decide how best to respond other organizations lack this ability, and they may fail to recognize the need for change which could in some circumstances can threaten the organizations long term survival. Change need to be understood and managed properly as people are affected by it, and have a chance to decide how the change will be managed, and to be involved in the planning and implementation of the change.
3.2 Organization Change management
Organizational change management (OCM) is a framework for managing the effect of new business processes, changes in organizational structure or cultural changes within an enterprise. Change management means defining and adopting corporate strategies, structures, procedures and technologies to deal with changes in external conditions and the business environment. (Anon., 2009)
Change management plays an important role in any organization since the task of managing change is not an easy one. Consultation is a process where management seeks the views of employees, undertakes meaningful discussions with them and their representatives with a view to reach an agreement. There are a number of different vehicles, for instance the corporate joint consultative committee, ream meetings, group meetings, individual meetings, newsletters, emails etc. Some of which will be more appropriate than others depending on the scope and nature of the change proposed. . It's a sensitive process where top management actively participate to take views and opinions of every employee and tries to incorporate their views into organization change process (Beer & Nohria, 2000). To explain the change initiative process ADKAR proposed a model which is given below:
ADKAR model is very much a goal-oriented change management model which allows managers or change agents to focus their activities on specific business results. The ADKAR model presented in ADKAR: a model for change is a framework for understanding change at an individual level. This model is then extended to show how businesses, government agencies and communities can increase the likelihood that their changes are implemented successfully. This model's origins in aligning traditional change management activities to give predetermined goal. The goals or outcomes defined by ADKAR are sequential and cumulative. An individual must obtain each element in sequence in order for a change to be implemented and sustained in respective area of fields.
A manager or leader can use this model to identify gaps in the change management process and to provide effective training and development for their employees
Source: Overview of the model:( http://www.change-management.com/tutorial-adkar-chapter-1.htm)
Outcomes of the ADKAR model:-
The ADKAR model has the ability to identify why changes are not working and help managers or leaders to take the necessary steps to make the change successful. They will be able to break down the change into parts, understand where the change is failing and address that impact on any specific area in the business organization.
The effective change management strategy required following five key goals stated by ADKAR model:-
A = (Awareness) represents a person's understanding of the nature of the change, why the change is being made and the risk of not changing. Awareness also includes information about the internal and external drivers that created the need for change, as well as "what's in it for me."
D= (Desire) represents the willingness to support and engage in a change. Desire is ultimately about personal choice, influenced by the nature of the change, by an individual's personal situation, as well as intrinsic motivators that are unique to each person.
K= (Knowledge) represents the information, training and education necessary to know how to change. Knowledge includes information about behaviors, processes, tools, systems, skills, job roles and techniques that are needed to implement a change
A= (Ability) represents the realization or execution of the change. Ability is turning knowledge into action. Ability is achieved when a person or group has the demonstrated capability to implement the change at the required performance levels.
R= (Reinforcement) represents those internal and external factors that sustain a change. External reinforcements could include recognition, rewards and celebrations that are tied to the realization of the change. Internal reinforcements could be a person's internal satisfaction with his or her achievement or other benefits derived from the change on a personal level.
Concentrating on awareness, desire, and knowledge, like a solid foundation in a new building, provides the base for the acceptance of change and the ability to successfully implement the new process. With this positive base, when you provide the ability and follow up with strong reinforcement, not only will the natural human reluctance to accept change be eliminated, you will often enjoy a strong team effort to make the coming developments proceed smoothly and very successfully. Senior management knows it is critical to competitive victory. Implementing ADKAR properly often translates into change management devoid of trauma, stress, and regression.
The elements of the ADKAR model fall into the natural order of how one person experiences change. Desire cannot come before awareness because it is the awareness of the need for change that stimulates our desire or triggers our resistance to that change. Knowledge cannot come before desire because we do not seek to know how to do something that we do not want to do. Ability cannot come before knowledge because we cannot implement what we do not know. Reinforcement cannot come before ability because we can only recognize and appreciate what has been achieved.
3.2.1 Resistance to Change
It is part of human nature to resist change; people often prefer familiar surroundings and don't react well to changes in their work or social environment. Resistance to change often takes some typical forms. One typical reaction is denial, which individuals use to protect themselves. If the change never really occurs, it won't need to be dealt with. Another common reaction is passive resistance-individuals agree on the surface with the need for change but are quietly unsupportive of it. Still others may respond with active resistance by openly disagreeing with the proposed change, lobbying against it, and encouraging others to do the same. The main reasons why people create obstacles to change are as follows-
Fear of the unknown
Incongruent team dynamics
Incongruent organizational system
4. Consultation in Change Management
Consultation is the process by which management and employees or their representatives jointly examine and discuss issues of mutual concern. It involves seeking acceptable solutions to problems through a genuine exchange of views and information (ACAS, 2005).
4.1 Methods of Consultation
According to Acas (2005) different organizations have different methods of consultation depending upon the working environment of the organization. Therefore it is important for organizations to choose cautiously the consultation process that will best suit for their structure and business culture.
It is very vital for the organization to know about the various factors that can influence their choice before choosing the consultation method (Ackers & Wilkinson, 2000).
Some influences factors are listed below:
Size of structure
Degree of centralization and decentralization
Employment relation climate
The issue to be discussed
Whether trade unions are recognized and there structure
Most of the companies regard consultation as the primary part of the day to day management process and therefore they are straightforwardly consulting with employees and as well as indirectly through employee representative (Lines, 2004).
The different methods of consulting employees include:
1 .Direct Consultation
2. Indirect Consultation
4.2 A successful change management strategy includes:
Agreement on a common vision for change - no competing initiatives.
Strong leadership to communicate the vision and sell the business case for change.
A strategy for educating employees about how their day-to-day work will change.
A plan for how to measure whether or not the change is a success -- and follow-up plans for both successful and unsuccessful results.
Rewards, both monetary and social, that encourage individuals and groups to take interest for their new roles and responsibilities
Factors for effective change
1. Understanding and accepting the need for change-it is quite straight forward that if I didn't understand a recommended change, I probably won't get very enthusiastic about making the change neither individual nor organisational.
2. Sufficient commitment-changing habits especially habits of thinking is especially difficult. In order to "stay in course", a person will need a very strong commitment to being successful.
3. Specific deliverable goals-even if one it's necessary, desirable and possible to make the change, the person still needs to have a clear picture of the outcome.
4. Mechanisms that require repetitions of new pattern-habits reach autopilot status through many repetitions. For a new habit there are relatively few repetitions, in order to add the needed number of repetitions of the new behaviour a mechanism needs to be created.
5. Feeling supported and safe-people intent on making changes seem much more willing to dive into the unknown when they feel that they are in a safe environment.
6. Patience and perseverance-establishing changes often takes a great deal of time and effort.
4.3 Successful vs. Unsuccessful change
Reasons of unsuccessful change processes:
It might be that the organization is having problems delivering the tough messages.Â Alternatively it might be inconsistency in the message delivered by members of the leadership team. The problem might not be with what is said but listening effectively to differing views and ideas.
2.Â Top Down
Senior people might lead the organization, set the direction and put the plans in place.Â Yet in reality they are not the people who can make it happen.Â People at lowest level of the organization determine whether a change program delivers.Â They need to be involved.
3.Â Lack of space and support
Changes impact on individuals in a very personal way.Â If organisations do not provide the space and support to individuals who are impacted by the change, the chances of success are greatly reduced.
4.Â Unclear objectives
The objective or outcome of any change program needs to be clear.Â Ambiguity makes it impossible to get across the reasons and benefits of the change.
5.Â Lack of performance measures
Change is usually about improvement.Â Unless there is a clear set of measures that can let people know whether they are on or off track, that are monitored and people are held accountable for sustainable change is unlikely.
6.Â Underestimating emotions
While everything on a spreadsheet or project plan is highly rational, it is important not to underestimate emotions.Â Few relish change and see it as an opportunity.Â This is neither right nor wrong it is just the way it is.Â Awareness of people's emotions can make a huge difference.
7. Ineffective use of consultants
Improper use of consultants is also a reason for un successful change
Reasons for successful change
Leader should set an example for there employees and should be proactive to the situation. So, that the leader can inspire people and can make real and relevant objectives.
Building the guiding team
Find a devoted team with right expressive dedication and right mix of skill.
Get the vision right
Find a team which will follow a simple vision and strategy and work on creative aspects.
Communicate for Buy in
Involve as many people as you can, communicate transparently and respond to people needs proactively. Use technology in favors of you and not against you.
Eliminate obstacles, allow positive feedback and lots of shore up from leaders - reward and recognize progress and achievements.
Create short term wins
Focus on short terms wins. Manage your initiates accordingly and prioritize your tasks. Finish current stages before jumping into new one.
Don't Let up
Encourage willpower and perseverance. Encourage ongoing process reporting, highlight achieved and future milestone.
Make change stick
Strengthen the importance of successful change via recruitment, promotion and new change leaders. Weave change into culture.
5. Can change introduced without consultation can ever be successful?
In order to answer this question some cases of companies will be analyzed.
Since last 20th century, it had launched a wave of strategies alliance and M&A in the world automobile industry, which is caused high competitions based on globalization and over-production crisis. There is no doubt that the Korean automobile industry has experienced a major crisis since late 1997. By viewing the crisis as a reflection of the need for fundamental structural change and strategies alliance with foreign makers in this sector. M&A is one of the major measurements for the reduction of the oversupplied capacity of an automobile industry in Korea. Hyundai Motor Co. took over bankrupt KIA Motors Corp.
and its sister commercial vehicle maker, Asia Motors Co., in December 1998. After the integration of Hyundai Motor Company and Kia, they maintain their own brands for field full vehicle ranges and maintain individual sales and marketing approaches throughout world markets. In this context, Hyundai will focus on boosting the synergy effects from the acquisition of Kia Motors and sister company Asia Motors through the pooled platforms of
Hyundai and Kia, exchange of auto parts, joint use of sales outlets and reductions in the development of new car models.
This helped them in continuing, pushing for strategic tie-ups with major foreign automakers to introduce advanced technology, jointly advance into world markets and improved liquidity. For this purpose, Hyundai had set-up the strategic alliances with DaimlerChrysler. At same time, Hyundai, pushed to speed up its strategic alliances to set up a world car project. Hyundai developed the next-generation car together with the two partners based on a model that it has been developing independently.
Chung, Myeong-Kee, "Internationalization Strategies of Korean Motor Vehicle Industries", Actes
Du GERPISA, No. 18, 1996, pp.117-122
-----------------------, "Globalization Strategies of Korean Motor Vehicle Industries: A Case Study
of Hyundai", Actes Du GERPISA, Vol.22, 1998, pp.45- 54
-----------------------, "Hyundai Tries Two Industrial Models to Penetrate Global Markets",
In the mid 90s shell was not responsive enough to global customers and new competitors were grabbing market share. Managers in charge of shell's operation for a particular country resisted changes that threatened there autonomy and the headquarters managers couldn't break out of the routine that worked well in the past .Shell realized that the giant anglo -dutch oil company had to change. Head of the shell world wide oil product business decided to change the company from the bottom up. Executive teams held several 5 days work shop each attended by 6 countries team of frontline people. The teams then returned home to study their market and developed their proposals for improvement. Each team had 60 days to put their idea into action and then returned for another workshop to analyze the output. They also started field tours and several others grassroots activities which had a tremendous effect on the front line employees who developed an infectious enthusiasm and a stronger business approach. Thus, Royal Dutch / Shells executives were able to create a more responsive organization by working directly with frontline employees rather than through layers of management.
The success of change depends from several aspects, each of them is important for particular organization, time and situation. 'Fundamentally the answer is that implementing change usually requires the commitment and co-operation of many people- and many interests'. The change introduced without consultation can be successful; however changes introduced with consultation are more likely to be successful, because employees feel involved in the changes the organization is making. Whenever change introduced with or without consultation, the success of it mostly depend on how it was implemented and managed.