They Are Going Through Change And Disruption Commerce Essay

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WHAT IS ORGANISATION?

"An organization in its simplest form (and not necessarily a legal entity, e.g., corporation or LLC) is a person or group of people intentionally organized to accomplish an overall, common goal or set of goals. Business organizations can range in size from one person to tens of thousands". (Carter McNamara, MBA, PhD, Authenticity Consulting, LLC)

WHAT IS CHANGE?

Change is very important in organization as it plays a big role. As everybody knows that change is inevitable. Change is a "systematic approach to dealing with change, both from the perspective of an organization and on the individual level."(searchcio-midmarket.tchtarget.com). It has at least three different aspects i.e. adapting to change, controlling change and effecting change. A proactive approach which needs to deal with the change is at the center of all three aspects.

Over the past few years, organization after organization, they are going through change and disruption. Whether people call this rationalization, reorganization, the old times like seventies and eighties seen an ever increasing concern with performance, productivity and profit. Even in this climate, many of the old using ways of doing things have been discarded, even sometimes have to be replaced with new innovative methods but even all that too with the simplistic idea of 'back to basics'.

It is very important to manage the change in organization, otherwise it can also leads to the negative side. For this, the organization always keep in mind that the changes made should be managed properly.

WHATS IS MANAGEMENT?

According to American Management Association" Management is working with and through other people to accomplish the objectives of both the organization and its members".pg(2)

Scenario (summary)

As change is a process that is inevitable. Change is happening everywhere; in fact at an alarming rate. Such rapid and dynamic change can either adapt progress or perish.

This organization recently looses £5 million contract due to which there is immediate 30% decrease in the budget. The senior management team did the meeting and come with the decision that they will cut 30% core and program staff positions and restructure its operational structures. Everyone is aware of the financial loss and knows that some level of staff reduction will be important. As to be expected employees are nervous. Overall morale is low. Supervisor is worried that same amount of work to be done now by the fewer employees.

The country director realizes that this SMT has not shown the strong track record when met with strong human resources issues, even in the past, they have been accused of lack of information sharing, making decisions in isolation and playing politics favoring some staffs over others.

Now the CD has asked the cross-section of individuals to form a task force to advice SMT on proposed strategies for making this transition transparent, inclusive and smooth as possible. I have been chosen as the leader of this task having the responsibility to make a presentation to entire SMT on their strategic roles and responsibilities in leading this organizational change. Even I need to understand where they are likely to resist encounter.

Describe the impact of change within this organization. What factors are compelling organizations to adopt new forms of organizing?

It is the process of implying and managing changes with the support of testing system and techniques so that there will be minimum changes of any mistakes and impact can be minimized. The change comes in many forms and can comprise of more then one environment. This brings the planned match which brings changes in the current environment for good results in an organization.

IMPACT OF CHANGE PROCESS:

Accepting environment like government, social and customers: It is very crucial to understand the outer surroundings and establish suitable liaison with various actors like government, society etc.

Objectives, Strategy formulation and implementation: the impact of change at irrelevant stage on its own internal dynamics and the primary is objectives settings and looking for competitive gain.

Employees training and practices: the employees are the main assets of the organization. The employees should participate in workshops and should be trained before they start their job so that they can increase their knowledge and increase their skills.

Technology: Technology plays very vital role in today's growth world. It is difficult for the managers to take decisions that how to deal and absorb the blow of changing knowledge and information in change process.

FACTORS WHICH ARE AFFECTING THE ORGANISATION

PESTEL FACTORS

POLITICS FACTORS (P) - This shows the government strategy as the point of involvement in the economy.

ECONOMICS FACTORS (E) - This mainly consist of economic expansion, exchange rates, interest rates.

SOCIAL FACTORS (S) - It also affects the demand of the product in the firm like age factor brings the demand increase or decrease according to age.

TECHNICAL FACTOR (T) - It is other factor which has great affect on macro environment. As the price of the product decreases, the demand increases.

ENVIRONMENTAL FACTORS (E) - This consist of changing the weather and climate condition where the organization exists.

LEGAL FACTORS (L) - It includes the legal environment where the firms operate.

For EXAMPLE: Keeping the personal example in my mind that I was working in TATA Communications. It's a consistent, high capacity, included (wireless and wire line) and digital network. It is competent of delivering a lot of services including whole info communication, infrastructure and services and in enterprises. The main factor of revolutionize in technology is its business encompass a full range of telecommunication services that covers mobile and landline which include internet (dial-up and wifi). They are also having the best internet network in India. Even they have recently launched the cheapest mobile phone for the middleclass people giving all features which expensive mobiles give. They have varieties of mobile and broadband varieties. They are also having their own shopping complex, Cyber cafes etc.

INTRODUCTION ABOUT BUREAUCRACY

The idea of bureaucracy has subject the field of organization assumption. And for some, ' large scale organization' and 'bureaucracy' are virtually synonymous (child 1977;presthus 1979). Bureaucracy has subject the organization of administrative work in the same manner that rationalization subject to help the organization of operational work. Many organizations have the small staff at top structure of organization which leads to heavy responsibility. Fayol's writings are more obviously rigid, but are labeled as 'formal theory' and little bit different from study of bureaucracy. This difference is largely fake, since both 'bureaucracy' and Fayol's 'formal administration' tells important same approaches to the administrative organization. Three main principles of bureaucratic organization by max weber which tells about more detailed characteristics, can be identified.

Specialization

Hierarchy

Impersonal rationality

STRENGTHS OF BUREAUCRACY

A unity of purpose in large scale organization can be achieved through hierarchical structure.

It provides the upward and downward communication in an organization which tells every employee their roles.

Hierarchy ensures strict obedience to procedures and avoids ignoring of the transitional links.

It makes the procedure simple of the movement of files through proper channel and makes easy to know where a file is.

WEAKNESSES OF BUREAUCRACY

In the hierarchical system, course flow from above to down below. Those down below are projected to carry out mechanically teaching of their superiors with no initiatives and drive.

It's bring out inflexibility in managerial organization and is not proper for the growth of dynamic human relationship between its members.

The achievement or breakdown of this system very much depends on the individual likings of the head of the organization. If he can bring life and personal touch in the organization, it is jump to success. Otherwise it is bound to be a failure.

ORGANISIATIONAL CHANGE

Organizations are changing. The new demands set by the technological advances are no longer meet by the traditional organizational structures. Hierarchical ethics have to make a way to concepts as teamwork, independence, self-management. "Competition has increased, followed by downsizing and the need for a flexible workforce". The most important rule in modern organizations is quality. Organizational change management processes comprise for creating a change management strategy appealing senior managers as change leaders(sponsorship), creating awareness of the need for change(communications), increasing skills and knowledge to sustain change(education and training). The principle of empowerment is becoming much important and the educational level has risen of the workforce. Changes in the organization have an impact on the shape of careers.

DEVELOPMENT CHANGE: Organization change has always focused on the development of the change in the organization. Improving the performance in small areas of the organization. "The process of development keeps people vibrant, growing and stretching through the challenge of attaining new performance levels through- very much the focus of previous continuous improvement initiatives".

For Example- previously I was working in TATA communications, we used to get workshops and training to improve our knowledge and skills so that we can deal with the computers regarding new software and updates.

TRANSITIONAL CHANGE- "Rather than simply improve what is, transitional change replaces what is with something entirely different".(practicing organization development: a guide for consultant). Acc. to Rubin Harris (1987),"the transitional change requires the dismantling of the old state and creation of a clearly designed new state usually achieved over a set period of time, called the transition state".

For Example- when I was in TATA communication, the strategy is to always attract the customers by providing them extra facilities like free minutes, free voicemail one month's broadband to sustain the customer.

TRANSFORMATIONAL CHANGE: It is "most difficult type of change facing organizations today. Simply said, transformation is the essential move from one state of being to another, it is so important that it needs behavior, a shift of culture and mindset to apply successfully and continue overtime.

In these three transformational changes cannot be managed. It needs established leadership with awareness to the people / cultural area as well as a realistic structure for implementing the change. They need a road map to direct their journey.

RESISTANCE TO CHANGE

According to Kotter and Schlesinger (1979), four reasons that certain people resists changes.

Narrow self-interest- Some people are worried with the suggestion of the change for themselves. They are mainly more concern about their own interests instead of concerning the interests of success of business.

Misunderstanding- concerning with communication problems, inadequate problems.

Low acceptance to change- some people are very eager on security and firmness in their work.

Different Assessments of the Situation-some employees don't want to adopt changes on any reasons and on merits and demerits of change process.

Resistance to Change Pyramid

SIX CHANGE APPROACHES TO DEAL WITH RESISTANCE TO CHANGE BY KOTTER AND SCHLESINGER

Education and Communication: It is very important to educate the people about the change effort beforehand. Communication and education helps the employees knowing the logic in change effort.

Participation and Involvement: The staffs have to involve and participate in the efforts which the organization is doing to bring change. This likely to lower resistance and those who just accept to change.

Facilitation and Support: the people resisting change due to adjustment problems. Managerial support plays a big role like supportive with employees in difficult times. This approach is mainly concerned with the condition of training, counseling, time off work.

Negotiation and Agreement: If some staff is resist to change, we need to allow that change resistors to prohibit elements of change that are threaten. This approach can be used where those resisting change is in place of power.

Manipulation and Co-option: the good technique is to co-opt the resistors if any other approaches are not working. This brings the resistor in change management by patronizing gesture for the sake of appearances somewhat than their substantive contribution.

Explicit and Implicit Coercion: this mainly used as the last approach as it involves implicitly and explicitly forcing employees to losing their jobs, firing or not promoting in future if they resist change.

INTRODUCTION ABOUT STAKEHOLDERS

According to Freeman (1984), he defined stakeholder as" any group or individual who can affect or is affected by the achievement of the organization's objectives".

Freeman uses a alternative definition of stakeholders as' those groups who are vital to the survival and success of the corporation' (2004) in which he changed two principles and renamed.

The Stakeholder-enabling Principle. Organizations shall be managed in interests of stakeholders.

The Principle of director responsibility. In order to define and direct the affairs of the corporation, the directors of the organization shall have a duty of care to use reasonable judgement in accordance with the stake holder-enabling principles.

Later on, he again adds a another principle reflecting a fairly new affinity in stakeholder theory

The Principle of stakeholder recourse. They can make action against directors of not performing their duty of care.

There are two kinds of stakeholders

Internal stakeholders-

Work council, employees and unions.

External Stakeholders

Buyers

Suppliers

Competitors

Government

Shareholders

STAKEHOLDER'S ANALYSIS

It is the identification of a project's key stakeholders, an appraisal of their interests, and the ways in which it will affect project riskiness and feasibility. Stakeholder analysis provides to project design by the logical framework and finding appropriate forms of stakeholder involvement by helping.

"Stakeholders are the groups, persons or institutions with interests in programmers. Primary stakeholders are those who are ultimately affected either positively or negatively. Secondary stakeholders are those who are mediators in the aid of delievery process".((http://www.euforic.org/gb/stake1.htm)

Four major attributes are key for Stakeholder Analysis:

The stakeholders' position on the improvement issue,

The level of control (power) they hold,

They have Level of interest in the specific reform,

The group/alliance to which they belong or can sensibly be associated with

MEASURES OR PROCESSES USED TO HELP INVOLVE STAKEHOLDERS IN ASPECTS OF ORGANIZATIONAL CHANGE

According toRDI, It is the technique which helps in making decisions about who to involve and how to engage them used by the organization. A stakeholder is the one who is affected by any decision or action.

This report shows about how stakeholders are related to an organization like Renault and how it plays it s part. Renault is the France company which is world's major automaker company and more then 250,000 employees. This company is mainly famous for cars. As it is very big company and obviously more will be the stakeholders which support and put weight on it.

STAKEHOLDERS ATTITUDE INFLUENCE ACTIONS

++ -- H M L

SHAREHOLDERS

++

H

ANNUAL MEETINGS

CUSTOMERS

+

H

MEDIA , SUGGESSION BOXES

EMPLOYEES

+

M

UNIONS

SUPPLIERS

+

H

NEGOCIATION

COMPETITORS

_

L

COMPETITOR STRATEGY

GOVERNMENT

+

L

RULES & REGULATIONS

COMMUNITY

+

L

COUNCIL / COLLECTIVE VOICE

LENDERS

+

L

TERMS & CONDITIONS

This analysis shows that how much the stakeholders are important to the company. The shareholders of the company invested the money in the company so that they can help the company as compared to other stakeholders. It also shows that how important are the government, employees, customers, suppliers to the company.( RDI, Managing change in organization, level 7)

Summary: we can conclude that an organization is really influenced by all stakeholders but we should not forget that an organization is also depend on shareholders.

TWO MODELS OF CHANGE

Business Process Re-engineering

Kaizen Method

BUSINESS PROCESS RE-ENGINEERING

The business process reengineering method (BPR) is described by Hammer and Champy as "the fundamental reconsideration and the radical redesign of organizational processes, in order to achieve drastic improvement of current performance in cost, services and speed".

According to relationship marketing, value creation for the customer is the leading factor for BPR and information technology often plays an important enabling role. It is a complete method, addressing such activities of organizing the project, assessing the current business process, designing the reengineered business process, and planning and implementing the solution.

A FIVE STEP APPROACH TO BPR

Develop the business vision and process objectives: the BPR method is obsessed by business image which implies precise business objectives such as output quality improvement, cost reduction and time reduction.

Identify the business processes to be redesigned: Recognize all the processes in the organization which requires improvement and then prioritize them in order of redesign regency.

Understand and measure the existing processes: try to avoid the repeating of old mistakes and a baseline should be provide for future improvements.

Identify the IT levers: BPR should influence by the awareness of IT capabilities.

Design and Build of the New Process: The symbol of prototype provides the BPR with the quick delivery of results and the satisfaction and involvement of customers.

INTRODUCTION ABOUT KAIZEN

This method is originally originated as Japanese management concept steady , continuous(incremental) change. It assumes that every level of our life should be improved constantly. This Kaizen philosophy stands behind many Japanese management concepts like small group activities, total quality control, labor relations etc.

The main elements of Kaizen are

Quality

Efforts

Involvement of all employees

Willingness to change

Communication

Out of this basis, three main three factors arises

Elimination of waste and inefficiency

The Kaizen 5-S framework

SEIRI- Tidiness

SEITON- Orderliness

SEISO- Cleanliness

SEIKETSU- Standardized clean-up

SHITSUKE- Discipline.

COMPARISON BETWEEN KAIZEN AND BPR

The Kaizen philosophy is more people-oriented, easier to implement when compared to BPR but this Kaizen requires long term discipline and it's a very slow chain. Whereas BPR is technology oriented and it enables fundamental change but change management skills are required in BPR process.

REFERENCING

http://managementhelp.org/org_thry/org_defn.htm( organisation definition)

Montana J. Patrick and Charnov H. Bruce (2000) Management 4th Edition. USA- New York.

Hales, C(1993)managing through organization: the management process, forms of organization. Green publishing press- Great Britain

http://managementhelp.org/misc/types-of-orgl-change.pdf(organisation change)

Peper.B et al. (2005)Flexible working and organizational change :the integration of work. Great Britain-Edward Elgar Publishing Limited.

Rothwell J. William (ed.) (2005) Practicing organization development: a guide for consultants. USA-Pfeiffer ( a Willey imprint).

Friedman L. Andrew and Miles S. (2006) Stakeholders: theory and practice. US- Oxford University press ( New York)

http://www.euforic.org/gb/stake1.htm

http://www.valuebasedmanagement.net/methods_kotter_change_approaches.html(resistance to change)

http://www.12manage.com/methods_bpr.html

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