Organization Change Case Study: RWG Organization

Introduction

Organization change is one of the essential drivers of organizational success in this century. Gilley et al. (2009) states that organization change as a critical variable in creating organizational competitive advantage. However, organization change is incredibly difficult to implement. It is a long-term effort as it involves implementation of new practices, keeping employees engaged, and managing the resistance to change (Meyerson. 2001). Organizational change is often coupled by organization resistance to change, which is mainly caused by uncertainty and organizational culture (Lakomski, 2001). Gilley et al. (2009) highlights that leaders are the prime mover of the change as they are seen as an organization’s agents who responsible for the change strategy and implementation. This has illustrated that the effectiveness of the leadership role and leadership behaviours are significantly associated with the successful change within the organization. However, what would happen if the change agents themselves resist to change? According to Costa et al. (2003), managers are seen as the change agent in the event of organization. Ford et al. (2008) suggests that organization’s resistance to change among the managers would eventually lead to failure to change or may make the existing situation worse. In this report, I would like to share my experience pertaining to a failed organizational change in Resort World Genting (RWG), which is the organization that I had worked for a year as a line manager. The failure to change was mainly caused by ineffective leadership and managers’ resistance to change, a short description of the event can be found in Appendix. This essay is divided into three sections, in which the first section will discuss about the leadership style within the organization; the second section will discuss about the reasons that contributed to the failure of organization change; while the last section will discuss about how the recommendations will help to execute the change successfully.

Leadership style and Organization Culture within RWG

Leadership is a complex concept which does not have a universal definition, as its definition varies across the global environment, in specific, from culture to culture and it is constantly changing. For example Hemphill (1955) associated leadership with an individual’s behaviour in directing group activities to meet organizational goals. However, the view on leadership has changed and has become more complex as leadership is not only about achieving organizational goals and objectives, but also involves dealing with other essential elements such as employee motivation and influences. For instance, Yukl (2010) suggested that ‘leadership is the process of influencing others to understand and agree about what needs to be done and how to do it, and the process of facilitating individual and collective efforts to accomplish shared objectives’ (Harrison, 2017, pp 6). In other words, it is arguably that the leadership approach has slowly shifted from transactional leadership to transformational leadership.

However, the leadership style within the department can be regarded as pure transactional leadership. Leader A was the general manager in the department, she was extremely task-oriented and directive. For instance, she made all the decision and expect all the line managers follow her instructions without any objections. Prior the change, each individual’s roles and responsibilities were well-defined, and each team knows what is expected of them (Judge and Piccolo, 2004). In addition, the rewards and incentive system were well established within the department, and each team will only be evaluated and rewarded based on the team’s ability in completing certain task. Hence, the teams were able to achieve their targets effectively as this style of leadership had resulted the department to operate in a routinized, non-creative but relatively stable environment (McColl-Kennedy and Anderson, 2002).

Hofstede (1980) highlighted five dimensions of culture that have significant influence in tendencies towards certain style of organizational leadership within a certain culture. According to Hofstede’s cultural dimensions, Malaysian’s culture can be regarded as high power distance, risk averse and individualism. For example, I noticed that RWG’s organizational structure was extremely bureaucratic and the superiors were usually respected and feared due to high power distance. In addition, most of the employees in the organization prefer to work in an environment in which a standard operating procedure has been established. Hence, these characteristics and traits within RWG has formed a leadership prototype which can be characterized as transactional leadership. In such leadership environment, the management within the department can be indicated as passive management-by-exception (Avolio et al., 1999), in which everyone is working individually and management’s intervention to the employees’ work is minimal when the employee consistently achieved the required targets. For example, I barely have had a conversation with the head of department apart from reporting the outcome of my projects; and some of my subordinates have never met nor talked with the head of department. As suggested by Hofstede (1980), this degree of individualism within the organizational culture has affected the hierarchical nature of worker-manage relations.

Factors that constituted the failure of Organization Change

The change in RWG was a big change, specifically, it can be regarded as transformational change, as it involves reorientation in the organization, which disrupts the traditional operational functions (Fischer and Pollock, 2004).  Unfortunately, the attempt of organizational change was a failure and it is arguably the failure is caused by the transactional leadership approach and organizational culture rooted within the organization, which have caused the resistance to change. As suggested by Agho (2009), leaders are the main drivers of organizational change, particularly, the relationship between the leaders and followers is an important element that has significant influence the outcome of the change. However, there wasn’t any shared purposes that binds the leaders and followers within the organization under transactional leadership style as suggested by Silins (1994). As everyone was focusing to achieve their individual goal for reward rather than organization goal. Besides, I observed that some line managers were resistant towards the change, as they claimed that the change would essentially disrupt their team’s structure and practices, and ultimately affect their performance. Ford et al. (2008) suggested that resistant behaviour among the ‘change agents’ is detriment to the outcome of the change, as the behaviour will adversely influence the ‘change recipient’ behaviour.

The second reason that prohibited the change is the failure to recognize the significance of followership in affecting the organizational change efficiency and effectiveness (Agho, 2009). Bjugstad et al. (2006) and Van Vugt et al. (2008) highlighted that the effectiveness of leadership in fostering change is highly dependent on the leader-follower relationship, which linked to the followers’ motivation, trust and commitment with the organization. Unfortunately, the leader-follower relationship within the organization has eroded due to the organizational hierarchy, which inhibited flexibility, creativity and trust. For example, some of my subordinates complained that they wished to use some creative approaches in performing their jobs as they thought that it would be more productive than the traditional approach. However, their suggestion were not being heard nor taken into account as the organization required them to follow the traditional principles and approaches strictly. 

The third reason is related to the organizational culture, particularly the blame culture that demotivate the followers to change. For instance, I found that most of the team leaders used to blame their subordinates when the goals are not met instead of supporting them. Such scenario is consistent with the findings of Silins (1994), in which Silins found that organizational support and organizational interventions in employees work is minimal in passive management-by-exception environment. In addition, Shanock (2006) suggests that employee satisfaction and motivation will decrease when they cannot receive reasonable support from their supervisor in addition to their contribution not being valued. Also, the blame culture has made the followers felt that they were not being trusted or valued by the organization. Michealis et al. (2009) suggested that the level of leader influence over followers is low when the followers do not have sense of trust and identification with the organization, which will increase the failure rate of the change.

Recommendations for successful change

After analysing the cultural background, organizational culture and leadership style of RWG, I found out that the transactional leadership and organizational resistance to change were the main reasons that constituted to the failure of change. Fischer and Pollock (2004) suggests that transformational change involves changing in culture and behaviour. However, the employees in RWG prefer to preserve the traditional culture and behaviour during the change. In order to facilitate a successful organizational change, there are a few areas within the organization which need to be improved. First, the leadership style within RWG has to be changed from transactional leadership to transformational leadership. Studies show that transformational leadership is relatively effective in managing organizational change (Bass, 1990; Gilley et al, 2009; Silins, 1994). In addition, Yulk (1999) suggests that transactional leader does not like change. According to Gilley et al. (2009) findings, essential skills and abilities which are associated with executing successful change include motivating, communicating, coaching, team-building and involving others, which reflects the need of charismatic leaders. In order to promote transformational leadership within the organization, training should be provided to the ‘change agents’. Bass (1990, pp 27) suggested that ‘transformational leadership can be learned’ and people can be taught to be charismatic. RWG should hold a workshop that focuses on delivering transformational focused training to the managers. For instance, training in mentoring could be done in the workshop to promote organizational support and individualized consideration.

Individualized consideration and coaching would be essential to foster leader-follower relations within the organization, which can improve the followership within the organization. Followership has always been seen as an issue within RWG, as employees have no faith in their leaders due to the passive management-exception and less individual identification given by the organization. For example, some of the employees in RWG tend not to cooperate and commit to organizational change. As suggested by Hollander (1992), supportive actions and participating of followers are crucial for any leadership and organizational event. In order to improve the quality of followership, follower’s motivation, commitment and development should be emphasized. For example, the managers should take initiative to engage more interactively with the followers. Coaching, supporting and mentoring should be provided to the followers to increase their emotional attachment with the leader and to improve their personal development. As strong leader-follower relation would essentially lower the power distance and the degree of individualism within the organization.

After repairing the leader-follower relation, the managers should manage and minimize the organization’s resistance to change, either the resistance from the followers or their own resistance to change. Ford et al. (2008) highlighted that the change agents have significant contribution to organization resistance to change, which resulted from their own resistance to change, communication breakdown and violating change recipients’ trust. For instance, the managers in RWG had failed to communicate the changes and the consequences of the changes to their subordinates, which caused their uncertainties, and hence strengthening their resistance to change. In order to minimize the followers’ resistance to change, the managers should provide justification and rationality of the change to create the followers’ readiness to change as suggested by Green (2004). In addition, well-developed justifications are likely to increase the followers’ acceptance to change and their immunity to the change. However, this approach highly relies on the leader’s credibility and the degree of trust the followers have to the leader. Resistance would essentially become stronger if the followers’ perceived trust to the leader is low or if there was a previous violation of trust.

Conclusion

Studies indicate that organizational change often associated with high failure rate (Bible, 1989; Burnes, 2012), and the change agents often contribute significantly to the failure. Apart from that, the quality of followership is also seen as a crucial factor that would significantly affect the outcome of the organizational change. Besides, organization resistance of change is inevitable during organizational change. However, leadership quality plays an important role in facilitating and managing the change; and to overcome the resistance to change. Pieterse et al. (2010) suggests that transformational leadership is highly effective in positively influencing followers’ behaviour to increase motivation and performance; and facilitate organizational change, but it might be not useful in other organizations with different business nature or culture. For instance, transformational leadership might cause the employees to become passive, as they will be too reliant on the leaders (Collinson, 2005). Conversely, transactional leadership might not be the ideal leadership in the organization change event (Gilley et al. 2009). However, the transactional leadership approach works very well in those highly structured which required to perform repetitive tasks (Judge and Piccolo, 2004). In this context, transactional leadership might be effective prior the change, but not during the event of change, as transactional leaders do not have great power in influencing the employees as compared to transformational leaders (Bass, 1990).

In the future, I would like to use the hybrid style of leadership which consists the quality of both transactional and transformational leadership, which is the resilient leadership (Dartey-Baah, 2015). As the business environment nowadays changes very quickly, a leader should be highly versatile and equipped with the ability to switch from various leadership styles which works best to a particular situation; and to manage a diverse team.

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Appendix

I was a marketing executive and a line manager in a multinational company, Resort World Genting (RWG). The department which I joined was responsible to design and implement marketing campaigns for the company. The department was divided in to a few teams of 5-6 members, and all these teams report to a general manager. However, the top management decided shrink down the department in order to cut cost, which means that the organization will not recruit a new employee to replace any vacancy in the department. This has caused high resistant from the whole department as this policy will definitely increase the workload of the department and reduce the productivity. In addition, the general manager and the head of department display stronger resistant than the line managers and bottom level employees, as both of them were opposed to the policy. The implementation of the policy was finally revoked by the top management. The attempt of this organization change can be regarded as a failure and the reasons that constituted to this failure will be critically discussed and analysed in the essay.