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This paper has examined the major changes in an organization that have resistance from its staff members in term of several micro and macro environment factors, as an example of Nokia which announced to work with Microsoft to be a "strategic partnership" on the smart phone system since 11th February 2011, but most of the Nokia stakeholders resistance to have such change. (The Wall Street Journal 2011) From the viewpoint of PESTEL, this paper would focus on investigating the "External forces" - political pressures, demographic characteristics, social factor, technological advancements and "Internal forces" - human resource problem, managerial behavior, to learn about the nature and what cause of staff resistance to change, such as "the fear of failure", "creatures of habit", "no obvious needs", "loss of control", "concern about support system", "closed mind", etc.
In order to have a more clear picture of the resistance reason from staff, this report would also discuss two major types of changes among the business competing market nowadays - "unplanned change" and "planned change". And applies Lewin's three-phase Change Model of behaviour modification "Unfreezing', 'Movement' and 'Refreezing" to explain how organization achieves change successfully. In this analysis which showed "uncertainly" is the biggest issue causing employee resistance to change. "Communication" would be the recommended solution on managing such resistance.
All change efforts are result-oriented; leaders implement change to realize new, different and better result. Monitoring is particularly crucial during change process.
Generally, the key to have an organization change successfully is to "stay in touch" with their people.
Management and Organisational Behaviour "Organization Change"
Table of Content
1.2 Background of Cathy Pacificâ€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦.7
2.1 Discuss the strategic importance of segmentation, targeting and positioningâ€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦9
2.1.1 Market Segmentation & Market Targetingâ€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦..9
2.1.2 Market Positioningâ€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦10
2.1.3 Apply Market segmentation on Cathay Pacificâ€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦.....12
3.1 Discuss customer value, satisfaction, loyalty and brand equity of Cathay Pacificâ€¦â€¦â€¦â€¦â€¦â€¦...14
3.2 Customer Value, Customer Satisfactionâ€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦...14
3.3 Customer Loyaltyâ€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦.16
3.4 Brand Equityâ€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦.17
4.1 Examine how Cathay Pacific builds long-term relationships with its partnersâ€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦18
Management and Organisational Behaviour "Organization Change"
With the aim of examine the reason why "staff resistance the organization change", it is important to figure out, for what reason drives leaders to take action on organization change.
Forces of Organization Change:
"Organization Change" usually takes place while an intelligent leader creating a passion for organization development (OD) and organization change. Rather than those competitors who do not move for making any change, in most cases the initiative leader takes the offensive would be the winner of the business. (Hooper & Potter, 2001)
The following "external forces" and "internal forces" give some ideas about what force leaders to attend OD and organization change.
Organization are open system which effect by different dimension of the environment change - globalization, economic development, new technology exploit, social culture shift and the political change, may cause an organization change, in order to maintain its competitiveness among the business world. (Robbins, 1990)
Capital Market Intervention
Under the influence of high raw material and labour cost nowadays, the business operation cost keeps increasing during these few years. This makes the importance of business investor, such as bank-loan officers, investment bankers, venture capitalists (VC) been on the rise within the capital markets. These people decide whether the organization is worthy for making investment. Companies who seek for investment to run their business have to provide business performance improvements and to avoid any potential risk to their investment. This gives an impulse to the leaders to take action for having organization change so as to satisfy their investors' assent putting fund on their business.
The more diversely human resource nowadays causes a business imperative to change their management system become workforce diversity effectively, in order to maximize the contribution and commitment from monitoring employees.
Technological advancement & operating methods revised
Because of the rapid exploit technology, a change in using new equipment for modify work process involves both manufacturing and service-oriental organizations. Internet usage and computerize occupy large scale of the current business world (ITU, 2010), which affect the daily lives and work processes of the staff. (Armstrong & Stephens, 2005)
All changes revolve people, no matter how good the organization change plan it is, the best way to bring success of the plan is to gain support from people who will affect by the change.
Government policy usually drives the organization have to be change accordingly. The "Minimum Wage Ordinance" is a most recent policy example which highly controversial in Hong Kong. (Labour Department, 2011)
Some change forces comes from the organization inside would becomes the internal change force, such as "Human resources problem" - low morale or "Managerial behavior" - low productivity.
Human resources problem & shortage of available internal competent staff
For the purpose of upgrade the monitoring structure or to fulfill the rapid company growth, company may try to improve the skill-level of its staffs, for those company which not having enough internal talent, may trigger an appointment of an external senior executive who may have successful experience fit to the scope and would bring-in some new operation methods, idea or enterprise to the organization change. (Stamoulis, 2009)
Inappropriate managerial behavior
Conflict between management team and their subordinates may come from autocratic control, inappropriate managerial decisions making or inequitable reward systems. That might be a sign for requiring organization change. For some case, an autocratic family business may only be changed through recognized that long term family predominate are undersigned until a well educated younger generation family member becomes a changer to propel a company into a growth phase and managing with new company culture. (Gersick, 1997).
A Slump in sales
Facing great competition among the own market sector, not able to catch up customer expectations, emerging new technologies, improper marketing promotion or ineffective product development may cause a great sales reduce as a result. This might be the accelerator for the leaders to make approach change onto their organization. (O' Connell, A, 2009)
Management Buyout (MBO) / Takeover
The top management team comes from a company acquisition which buyout a large part or the whole part of the organization. In general, this may follows a transformational change of the operation ownership, the new management structure or a new appointed chief executive officer may ensue. (Armstrong & Stephens, 2005)
Business in these days is affected by number of macro and micro environment factors. Therefore, many companies have to work harder to make sure they fit into the new business environment. As per above influences, leaders should keep their eyes on the business, and it would be easier to be success if there is a well planned change with good managed and consistence with the objectives of the organization.
Level of change
"Change" can be identifying into four difference level - knowledge, attitude, individual behavior and group performance change.
As a most simple stage, "Knowledge change" can be occurring after reading news or learning from a passage. Furthermore, "Attitude change" can be referring to a positive or a negative emotional change which may comes from attended an enlightening lecture. "Individual change" affects staff's own behavior which derived from having training, socialization influence or having counseling. For "group performance change", leaders may process consultation, holding some sensitivity trainings or doing opinion survey to its target group in order to have a deeper understanding of their people. (Hersey, P & Blanchard, K. 1988)
Two Major types of Changes
There are two major type of change - "unplanned change" and "planned change". (Robbins, 1990)
"Unplanned change" only comes of a sudden, unforeseen and unexpected, handling 2008 Global Economic Recession (CNN, 2008) is an example of unplanned economic change which requires great flexibility of the organizations.
"Planned change" usually comes from a carefully orchestrated approach and proactive management team which intentionally carried by some conventional and hierarchical structure company in order to transform to be the new company which facilitates for the self-managed teams.
(Knowles & Saxberg, 2002)
All in all, a capable leader needs to be well trained and should be able to handle both planned and unplanned change appropriately.
Lewin three-phase Change Model:
These days, human resources take the most importance part of an organization. Any organization change would only be success under the support by the workforce, such as structure change, new work process, incentive system as well as job design, all requires individuals change.
In order to understand how organization achieves change successfully it is possible to consider the process of planned change by using the Lewin's three-phase model theory. (Burnes, 2004)
Step 1 - "Unfreezing':
Human stability behavior causes the "resistance" to change, with aim at having organization change successfully, discard and "unfreezing' the previous behavior would be the first and most important phase of the change process. Leaders may create motivation to encourage staffs adopt new change.
Step 2 - 'Movement'
"Change" involves a reinforcement learning, repeat trying and taking action enable staffs adopt the new behavior and new working process. The purpose of "Movement" is to help staffs learn from the new idea and familiar with the new mechanisms to accelerate the change.
Step 3 - 'Refreezing"
To secure the new behaviour among the organization change by having "Refreezing" process, a successful change activity must be carrying out sustainable, in term of having a new company policy, new organization culture or new practices for every staffs. The reinforcement can be help by holding frequency training or regular discussion forum. (Burke et al., 2008)
Resistance to Change
According to Zaltman & Duncan, "Resistance is any conduct that serves to maintain the status quo in the face of pressure to alter the status quo." (Zaltman & Duncan, 1977, pp. 63) "Resistance" usually occurs while staffs request to learn something new. In many instances, staffs are not resisting with the benefits from the new change, but they are fear of the losing current status, reducing existing salary wage, facing uncertainly future, especially they are not sure of their ability able to cope with or might have risking of failure. (Ford & D' Amelio, 2008)
Resistance to organization change usually takes the form as "work-to-rule", high turnover rate, low productivity or antagonize against management team. (Burke et al., 2008)
In today's economy, company recognizes "change" is the only way to survive, but it is no easy to carry change in an organization. The decision of Nokia to restructure its smart phone system by works with Microsoft as a "strategic partnership" is an example of organization change. (The Wall Street Journal, 2011) Also, McDonald fights back with the new health style - "Green Fingers" reform program is a notable reform which is taking place in the worldwide business market. (BBC Money Programme, 2005) However, these changes are also resistance by their stakeholder.
The major reasons people resistance change:
Generally, people desire not to lose any quo value, a misunderstanding of the change process, a loophole changing plan or a low tolerance change style usually derives the sense of "resistance".
Fear of failure / Low tolerance for change:
Staffs resist organization change because they fear of failure to develop new skills which require adopting. It is normal for every people who are limit for certain degree in their ability to accept change; company should not require people too rapid change. (John P. Kotter & Leonard A. Schlesinger, 2008, "Choosing Strategies for Change", Harvard Business Review, pp.130-137)
Habits of staffs / Loss of control:
Staffs may cling to the previous working style, if it works well for a long history; people believe it is more secure and predictable. This would be difficult to have people go outside this comfortable zone and learning new skill which beyond their routine manner. Routines work process develops a safety sense to staff as all follow the track. Being asked to use a new way would make them feeling confuse and un-accommodated.
No obvious for change:
Staffs may only aware the organization change impact on their particular work, but do not seeing the entirety part of the company. Thus, they may only find the change disturb their normal working process but not be able to recognize the benefit of change for the whole company.
Concern about support system:
Changing organization structure may cause some staffs shift to the new department. People may worry about working in the new condition, work for the new boss and fear of lack of previous support team.
Individuals' dogmatic characters are rigid and closed-mindedness, staffs who having such character might not willing to change into new situations. (Lau & Woodman, 1995) Some types of cognitive rigidity would be implicated as to resistance change.
Unwilling to learn:
Some staffs especially the elder employees, who do not willing to learn any new skills and technology. By using the old skill, they believe, they have all necessary capability to run the work process well but there is impede the organization development and hinder their self-learning.
Not confidence for the new system
Under the success history of the old working model, people may not interest in any new methods and just want to stay the work process as usual. It is because they fear that changes might not lead to any improvement and might have risk of failure. Normally, they only focus on their own scope of works, but miss to realize that change is needed for the whole company in order to maintain it's competitive.
Fear of unknown:
As a conditioned reflex of the self-protection mechanism, staffs may simply resistance to all changes which they are not familiar. Due to the limited knowledge of the new change, people may suppose it as the worst case. Their supposed "fear" would block the process of organization change.
Fear of personal impact / parochial self-interest:
On account of parochial self-interest, while being asked to make change, people generally view from their own stand-point and only consider if the change could be able to benefit them. In case staffs found the new change would give them more workload or even needs to learn anything new, "resistance to change" would generally as a result.
In short, "uncertainly" seem to be the biggest issue causing employee resistance to carry organization change. While requiring to having change, staffs may worry about their ability to meet with the new requirement, worry about their job security, nervous of the new working structure or just simply closed mind and not willing to attend any change.
How to manage "resistance to change":
It is important for leaders to learn how to manage "resistance of change" from their staffs because the failure on carrying organization change are costly, such as higher turnover rate, decreased staff morale, lowered probability, antagonize against management team which would be a huge waste of company cost and its resources. The most serious is difficulty in fixing the failed changes effort. (Burke et al., 2008)