Change Management for Organisation Development

PURPOSE OF REPORT

The purpose of this report is to critically research and analyse the change management and leadership theories, tools and techniques in order to achieve the business administrative goals. This will help the organisation to set the planning to attain the goal in an organised way and at last achieve the desired goal. Before, the in-depth study it is important to know, what is Change Management and leadership.

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CHANGE MANAGEMENT is basically a systematic approach in dealing with the transition or transformation of an organisation’s set goals, processes and the existing technologies. The absolute purpose of change management is to implement strategies for making change, then controlling change and at last helping the people associated with the organisation to adapt to the change. These strategies are well organised and structured. (Rouse, TechTarget, 2015)

LEADERSHIP is a quality of an individual which in some cases can be innate but is mostly acquired. It is the ability of the individual to influence and guide other individuals to work in a desired direction to attain the set goal. Leadership involves making crucial decision about the course of action which needs to be taken and to set a clear vision ahead for the followers. (Rouse, leadership, 2014)

Leadership is one of the main functions of the management, it helps to maximise the efficiency of the organisation and to achieve its set goals. Leadership helps to initiate the action for the set plan, motivate the employees to work harder, it provides guidance and helps the employees to build up the confidence and is needed for self-motivation. Therefore, leadership helps to build a pleasant work environment and coordination among the management.

The following report will analysis the four change management theories and leadership theories with regard to leadership styles. This critical analysis will help to choose the most appropriate change management and leadership theory with regard to leadership styles which will be well suited for the development of the organisation.

CHANGE MANAGEMENT THEORIES

1.     Kurt Lewin’ Change Management Model:

Kurt Lewin’s model is one of the most popular and easy to understand model. In this model, the change processes are splitted into three stages, these fragmented pieces are easy to understand and thus this theory is easy to implement.

Lewin describes the three stages of change management:

• Unfreeze
• Make changes
• Refreeze

UNFREEZE THE PROCESS AND PERCEPTIONS:

Before making changes in the organisation, it is important to first unfreeze the current processes. This means to critically analysis every step of the organisation and conduct an in-depth study of the processes of the organisation. This will automatically help in eliminating the existing biases and the commonly accepted mistakes. This will help to understand the cause of problem and therefore, helpful in finding the solution.

Forcing sudden change, only causes resentment. Therefore, it is important for the organisation to prepare the team for the new element to be changed. Every team member should know what change is needed, what changes are being suggested, and what are the benefits that comes with the change. This procedure will help to understand the need of change and convince and encourage the employees to stick to the upcoming change.

MAKE CHANGES:

Once the analysis of the current situation is done; communication, support and education are used to limit the difficulties that may arise while transition and addressing the problems as soon as they arise.

Firstly, the team has to be educated about the change that is to be made. Whether it is a change in technology or market policy, the team ought to learn about the new change.

Secondly, a support system should be ensured, to whom the employees can go, whenever any problems arises. This could be a meeting with the manager or a mentor they can go to or a knowledge base that can help to answer their questions.

At last, these should be a proper communication within the organisation. A feedback system needs to be installed in the organisation, that would highlight the problems or even give suggestions to the arising problems.

REFREEZE:

After the change has been employed, it is important to “refreeze” the new status quo. It is vital for the change management to conduct regular reviews on the working of the new methods and seeing weather everyone is following it. Rewards should be given to those employees who work harder and makes extra efforts.

All the processes associated with the change should be regularly monitored until that change becomes a habit. Continuous reinforcement is required to make this change permanent and for the employees to work extra harder for it.

ADVANTAGES OF LEWIN’S CHANGE MANAGEMENT MODEL:

• Fantastic model, when there is a need for drastic change in order to develop.
• Helps to uncover the hidden mistakes.

DISADVANTAGES OF LEWIN’S CHANGE MANAGEMENT MODEL:

• Unfreezing processes could be difficult to conduct and is time-consuming.
• Requires great deal of care
• Drastic changes may risk alienating the employees because of different work scenarios.

Kurt Lewin’s Change Management model requires democratic leadership style, as this style believes in participation and co-ordination. This style allows the leaders to encourage to participate and leader always take a unanimous decision to achieve the goal.

                                                                                                                                (Mulholland B. , 2017)

2.     The McKinsey 7-S Model:

McKinsey 7-S model focus on analysing hoe coherent is the company, instead of supporting deep analysis and large shifts. This model basically helps to know what change is required for the particular organisation. This model works by analysing the 7 aspects of the organisation. These aspects are as follows:

• Strategy
• Structure
• Systems
• Shared values
• Style
• Staff
• Skills

ASSESS THE STRATEGY:

Strategy help to move towards attaining the purpose and making a systematic plan can also keep us ahead our competitors. While making a strategy, few this are important to be kept under consideration:

• Company’s objective
• How competitive is the company?
• What are the existing plans and does they need to be changed?

LOOK AT THE STRUCTURE:

It is important to have a more organised and systematic structure, information regarding the structure of the organisation should be accurate to see the effectiveness of the changes. It is important to know how the organisation is structured, its hierarchy, how the department & teams are organised & managed, who makes decisions within the organisation and how everyone communicate with one another.

ANALYSE THE SYSTEM:

McKinsey model emphasised the importance of having processes and managing them effectively. He emphasised to know the core systems of the business (HR, management, etc), how the systems work, how they are updated, are they accurate or not and keep a track on them and most important: who controls the system?

RECORD SHARED VALUES:

Record shared values basically includes the official company’s values and the company’s culture. Company’s culture may seem irrelevant but it can play a powerful part in the establishment of the change. Linking of both values and culture will act as a work force, which will make the work environment more adaptable. To understand the values following points are important to keep under consideration:

• Core company values
• Company’s culture
• Team’s culture
• How strong the values are?
• How to strengthen this practice?

TAKE NOTE OF THE COMPANY’s STYLE

This stage focuses on the management and leadership styles used in the business. During this aspect it is important to know how department & teams are managed, how active is the management or leadership, is their chosen style effective & how and at last does it inspire competition or collaboration?

LIST OF STAFF:

This aspect entirely focuses on the company’s staff, their job descriptions, common tasks and skills. This aspects analysis whether the positions are filled, what skills do they have, is there any particular skill that has been left out, does the company needs to hire more and if does than who is the one, they need to hire?

ASSESS THE STAFF’s SKILLS:

This aspect focuses on the skills that the staff have- the existing skills and also helps to find out what skills the company lacks. For this analysis, following points needs to be considered:

• Does employee’s skill, sufficient for the job he is required to do?
• What skills does the company lacks?
• Which is the strongest skill that the company have assessed to?
• Does company perceive these skills well, how they are reflected in context to the company’s requirements?

      Cross-examine the 7-S’ and find the changes that needs to be implemented:

After analysing all the 7-S, the relationship between them is seen like how they affect each other. It is important to look whether the 7-S supports each other, for example; weather the structure of the organisation support the strategy or how the values influences the system of the organisation. After the cross-examining of all the 7-S, it would be clearly seen that what kind of change needs to be implemented.

ADVANTAGES of The McKinsey 7-S Model:

McKinsey 7-S Model shows the weakness of the company and draw attention to the aspects of the organisation that requires change. It makes sure that every aspect of the company supports one another, making the organisation more flexible to work within.

DISADVANTAGES of The McKinsey 7-S Model:

This model does not work in small companies as it is quite impossible to collect the required data that is needed for the analyses of 7-S and implementation of change.

The McKinsey 7-S Model requires Charismatic Leadership Style because this kind of leadership inspires the team and the leaders are more enthusiastic with positive approach. This change model is quite time-consuming, therefore the employees may after sometime lose their interest, in this scenario the charismatic leadership style comes in handy as it will help to motivate the employees and keep up their enthusiasm.

 (Mulholland B. , 2017)

3.     Maslow Motivation Theory:

Maslow Motivation Theory is one of the most influential and well-known theory for workplace motivation. The American humanistic psychologist Abraham Harold Maslow developed the famous theory of individual development and motivation, he continued to refine his theory based on the concept of a hierarchy of needs over several decades (Maslow, 1943, 1962, 1987). In his theory, he proposed the hierarchy of needs, like how human react in a way and how he addresses to his basic needs: so, called higher level needs.                          (Maslow Motivation theory, 2015)

In his paper (1943),” A Theory of Human Motivation”, published in Psychological Review, Maslow identified five levels of goal attainment. The hierarchy of the needs goes as follows:

                           (McLeod, 2017)

Maslow argued that the individual move in an ascending order; example: firstly, he would satisfy his physiological needs (food, water, warmth & rest), then he will go up and fulfil his safety needs (security & safety) and this way going up, at last he will attain self-actualization means achieving one’s true & full potential. Maslow’s theory influenced the development of other theories as well- including Frederick Herzberg’s two-factor theory, which emphasised that some factors cause satisfaction at workplace, while others do not.

MASLOW’s HIERARCHY OF NEEDS IN THE WORKPLACE:

As being the theory of human motivation, it explains certain things that are more foundational than others to health, well-being and further more to achievement. Maslow’s pyramid hierarchy already exist in every work place, there are different levels and ways for each individual to attain the self-actualisation, from manager to the CEO. Today, it is expected from every organisation to maintain standard of ethics, which most importantly should include ensuring the employees needs to be satisfied. And as being the business leader, striving the employees’ needs is morally accepted as well as financially makes sense, as well as attracting and retaining the top talent has become a highly competitive attempt.

ADVANTAGES OF MASLOW’s THEORY OF MOTIVATION:

• Simple to understand: This theory is very simple, even a layman can relate to this theory. The most important for a business man is the top level i.e.; achieving everything and being satisfied with it.
• It takes human nature into consideration: This theory takes human’s basic needs into consideration. Example: suppose a little kid is hungry, and he is given two choices- first is food and second is his favourite toy. The kid will at first reject the toy and take food but after that demand the toy; this shows the nature of greed and this concept is very well described in Maslow’s theory.
• Relevant in every field: This theory is relevant in all the fields weather it is home or office; the needs of individuals are somewhat same.

                                                                                                                (Parikh, Advantages of Maslow’s theory of motivation, 2018)

DISADVANTAGES OF MASLOW’s THEORY OF MOTIVATION:

• Not all individuals have same mind set: One of the main disadvantages of this theory is that not all individuals think in a same way; for some individuals social affection maybe more important as compared to others for whom safety is more important. Therefore, hierarchy might not be same for everyone.
• Cultural differences: People from different cultures also have different kinds of needs and may put more emphasis on one need as the other culture may focus on another. Example: people from individualistic society like USA believe that at the age of 18, individual should move out of the house and earn his living; while on the other hand people from collectivistic society like India emphasize that kid should always live with their parents and help them in old age.
• Difficult to measure: It is very difficult to measure the satisfaction as it is subjective in nature, and subjective concepts are quite hard to measure.

                                                    (Parikh, Disadvantages of Maslow’s theory of motivation, 2018)

This change model requires freedom; therefore, Laissez-faire Leadership style would be used here. As this leadership style allows freedom to the employees and gives an environment in which the individual can work freely.

4.      Force Field Analysis:

Kurt Lewin is the founder of social psychology, during his research he proved that not only individual’s internal processes like desires, motives and expectations plays an important role in individual’s life but also the pressure from the environment plays a crucial role. In his change management model, Lewin emphasised that it is possible for individuals to be flexible, thus they can change their behaviour. Kurt Lewin gave three stages that lead to change: the unfreezing stage, the change stage and the refreezing stage; these stages are discussed above.

CHANGE PROCESS:

• The very first stage is becoming aware about one’s behaviour and getting rid of the unwanted bad habits; making efforts to change “unconscious wrong behaviour” to “conscious wrong behaviour”.
• After being aware about the “conscious wrong behaviour”, only than the individual will be able to move to the next stage i.e.; the move stage. During this stage, the individual should acquire the required appropriate knowledge and then make the effort to convert “conscious wrong” to “conscious right” activities.
• The last stage requires the good behaviour to become permanent, i.e.; the continuous transition from “conscious good” to “unconscious good”.

FORCE FIELD ANALYSIS:

Force Field Analysis (FFA) developed by Kurt Lewin states that this is a method in which organisation can predict which possible resistance may be proposed as change in the upcoming time.

A single change has many different ways in which it can be affected. Example: introduction of new technology or product, reorganisation, etc can have different effects on the management. With the help of Force Field Analysis, it becomes quite clear weather which particular force would have significant effect on the change.

The forces which may affect the organisation or the people working in the organisation are the resistant people, negative attitudes or habits, insufficient knowledge and skill.

POSSIBLE OBSTACLES:

Force Field Analysis helps to understand that what are the things needed for change and also makes clear about the obstacles that may hinder the change. It helps to get aware about the difficulties involved in the process of change. This will help to implement the change better and also recognise than eliminate the obstacles.

DRIVING AND RESTRAINING FORCES:

Force Field Analysis differentiates between driving and restraining forces. Restraining forces are the ones that get in the way to make the change, also known as obstacles. On the other hand, driving forces support and encourage the change and its associative positive effects.

Force Field Analysis should be implemented as well as critically overviewed regularly to know weather any new obstacle arises or is there any need required to modify the changes. All the stakeholders should come together and overview its process regularly.

 (Mulder, 2017)

ADVANTAGES OF FORCE FIELD ANALYSIS:

• Provides visual summary about the various forces for and against the change.
• Helps to identify obstacles, which will strengthen the force supporting the decision and avoiding the forces preventing it.

DISADVANTAGES OF FORCE FIELD ANALYSIS:

• This model requires full participation and, in some cases, full participation can lead to problem, it may become difficult to interpret the driving and restraining forces on force field diagram.
• Force field analysis may lead to division in the groups, which in turn will have bad influence on the team work.

                                         (Advantages and Disadvantages of Force Field Analysis, n.d.)

STEPS FOR USING FORCE FIELD ANALYSIS

        (Connelly, 2017)

Kurt Lewin’s Force Field Analysis (FFA) requires democratic leadership style, as this style believes in participation and co-ordination, as discussed above this model requires full participation, therefore this leadership style is well suited for this model.

LEADERSHIP THEORIES

1.     Trait Theory of Leadership:

Thomas Carlyle gave the Trait theory of Leadership, it is based on the characteristics of many leaders, both successful and unsuccessful; and are used to predict the effectiveness of the leadership. All the characteristics are written on the list and then compared with the qualities of protentional leaders and see as if they would be successful or unsuccessful.

In Trait theory following characteristics are noted down:

• Physiological (appearance, weight & height)
• Demographic (age, education and socio-cultural background)
• Self-confidence
• Personality
• Temperament
• Intellective (intelligence, decisiveness, knowledge & judgement)
• Task-orientation (achievement drive, initiative and persistence)
• Social characteristics (sociability & cooperativeness)

Potential successful leaders have certain type of interests, attitude, abilities and distinguish type of personality traits that are certainly different from a non-leader. In the past three decades, a set of core traits have been identified; it not only distinguishes leaders from non-leaders but also give us a particular criterion about how should a leader be.

Core traits identified are:

• Achievement drive: great level of efforts, high ambition, energy & initiative.
• Leadership motivation: motivating & uplifting everyone to reach the desired goal.
• Honesty and integrity
• Self-confidence: believing in one’s self and his ideas
• Cognitive ability: have good sense of judgement & high analytical skills
• Knowledge of business
• Emotional maturity
• Charisma, creativity & is flexible in nature

ADVANTAGES OF TRAIT THEORY:

• Pleasant in nature
• Many decades of research have validated the foundation of the theory.
• Gives detailed and proper analysis of the elements of a leader in the leadership process.

DISADVANTAGES OF TRAIT THEORY:

• The process of determining the good leader and bad leader is all subjective.
• List of traits is very long and are also very general.
• There is no determination of what is the most important trait.
• Theory is very complex

                                                      (Trait Theory of Leadership, n.d.)

Trait Theory requires Bureaucratic Leadership style, as in trait theory certain core traits of the leader are identified and the individual is characterised as good leader or bad leader on the basis of these core trait. Therefore, Bureaucratic leadership is applicable as it believes to stick to the rules or set pattern.

2.     Participative Leadership Theory:

Jimmy Carter, a former naval commander gave the Participative leadership theory (also known as Democratic leadership). This theory is a part of decision-making styles in which, the employer asks the employees to take part in the decision making of the organisation. Social workers, group therapists and facilitators use participative leadership.

     How participative leadership works

      Four Types of Participative Decision-Making

• DEMOCRATIC or PARTICIPATIVE LEADERSHIP: This involves the participation of all the employees in decision making, but the final decision is taken by the leader. Once the decision is taken, leader have to communicate the decision to everyone. It is people-oriented and quality-oriented.
• COLLECTIVE DECISION-MAKING: In this the group collectively makes the decision and even the whole responsibility of the decision is on the group.
• AUTOCRATIC PARTICIPATIVE DECISION-MAKING: Similarly, like democratic decision-making, here also the whole group collectively brainstorm for solutions and after that leader makes the decision. Here the difference is that it is more goal-oriented and results are obtained faster.
• CONSENSUS DECISION-MAKING: Here, the leader gives up the control and the whole responsibility of the decision-making is on the group.

ADVANTAGES & DISADVANTAGES of Participative Leadership

Participative Leadership Theory by Jimmy Carter, requires Democratic leadership style, as this style believes in participation and co-ordination, as discussed above this model requires participation of the whole team and at the end the leader choose the decision, therefore this leadership style is well suited for this model.

                                                 (Participative Leadership Theory and Decision-making Style, n.d.)

3.     Transactional Leadership Theory

Transactional Leadership Theory was first given by Max Weber in 1947 and then updated by Bernard Bass in 1981. This theory is basically used by the managers, it focuses on the basic processes of controlling, organising and short-term planning. McCarthy and de Gaulle are the famous leaders who used this theory.

Transactional Leadership basically involves motivating and directing employees to primarily obey the instructions of the leaders. The power of the transactional leaders comes from the higher authority. This style of leadership is also known as ‘telling style’.

This theory works on two concepts- Reward and Punishment. If the employees do what they are told to do, then reward is given; but if employees does not follow the instructions, then they are given punishment.

 Exchanges are made between the leader and followers to achieve routine performance goals; the exchanges involve four dimensions as follows:

• Contingent Rewards: When the employees complete the given task, rewards associated with the task are given to the employees.
• Active Management by Exception: Transactional leaders actively monitor all the work performance of the employees and correct if any mistakes occur.
• Passive Management by Exception: Here, leaders only intervene when the standards of the work task are not met.
• Laissez-faire: Here, the leader gives full responsibility of decision-making to the employees and does not intervene at all.

 (Transactional Leadership Theory, n.d.)

      ADVANTAGES and DISADVANTAGES OF Transactional Leadership Theory:

(Advantages and Disadvantages of Transactional Leadership, n.d.) 

Transactional Leadership Theory requires Automatic Leadership Style, as it allows the leader to focus on only one direction and this theory’s demand can only be fulfilled by the Automatic Leadership Style.

4.     Contingency Theory of Leadership:

Fred Edward Fiedler, the Austrian psychologist gave the theory of Contingency in 1964. This theory states that there is no perfect style of leadership, leader’s effectiveness is primarily based on the situation he is put in. This theory has two factors- “leadership style” and “situational favourableness” or “situational control”.

Leadership style:

The first step of the theory is leadership style, Fiedler believed that there is fixed leadership style and it can only be measure with the help of a scale he developed –

‘Least-Preferred Co-Worker (LPC) Scale’:

In this scale, individuals are asked to be rated and the total score decides weather the individual is a relationship-oriented leader or Task-oriented leader. High score means the individual is relationship-oriented leader and Low score means the individual is task-oriented leader.

Fiedler believed that relationship-oriented leaders are good at managing conflicts and make complex decision as compare to the task-oriented leaders.

Situational Favourableness:

• Leader-Member Relations: The relationship between team and the leader, the more trusted the leader is, the more influence he has on the team.
• Task Structure: The type of task the team is doing, clear or vague. Structured tasks are easier to achieve as compare to the unstructured tasks.
• Leader’s Position Power: The more powerful the leader’s position is, the faster he can complete the task or get it completed.

APPLYING THE FIEDLER’S CONTINGENCY THEORY:

                                                                                                  (Fiedler’s Contigency Theory, n.d.)                      

ADVANTAGES AND DISADVANTAGES OF FIEDLER’s CONTIGENCY THEORY:

Fiedler’s Contingency Theory of Leadership requires Laissez-faire Leadership style, as according to this style the leaders give freedom to their employees to take their decisions and set their own deadlines.

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