Change Management in Alborz Insurance - Case Study Example

Name: Instructor: Course: Date: Change Management in Alborz Insurance Introduction Change management is a process of transition period of individuals or organizations to a better state in the future. It may also mean a change in the scope of a project or the approach that management introduces and approves. It is a structured process of set tools that lead to a positive change. This does not mean that change management is an improvement method but it is a tool and a technique for managing change. By that, it is a way of increasing the will and chances of change and reducing the resistance to the implementation process or organizational change. For effective change management, simple but strict rules should be followed. If these simple rules and principles are applied and adhered to, change is more successful. Personal change involves consultation with the affected people and engaging them, thoughtful planning, and finally and, above all, carrying out a sensitive implementation process. If the change is forced on people, then problems will arise due to resistance. Due to globalization, the world is currently changing at a faster rate than any other time in history. For this reason, organizations should adopt to the world’s changes for competitiveness and survival (Burke& Litwin 527). Organizations that do not have the ability to change will weaken and be overtaken by those that successfully initiate changes. In response to global changes, many organizations are continually trying to adapt the changes. Research indicates that the goal of change management is the firm effectiveness and believes that changes will result in efficiency in an organization. Literature shows that organizational effectiveness is directly related to change management. This paper will analyze the organization change in Alborz Insurance. The study is in the line of research conducted by Nadler and Tushman. In their model factors such as organizational strategies, external environment, resources, past behaviors in their provided model, factors such as external environment, resources, past practices were considered as the inputs of change management, while products, services, performance, and effectiveness are considered as outputs of change management at the organization (Nadler and Tushman, 14). In addition, the strategy was recognized as the most crucial dimension of a change system because it plays a significant role in a firm’s effectiveness. Definition of organization change Change management can be regarded as a way through which organizations continuously improve on their day to day activities and increase their long-term projections. It also refers to changing values, attitude, and the structure of a firm to enable it to adopt new technology, access new markets and manage challenges. The process of organizational change can occur when an employee undertakes a research on how tasks are performed using existing methods and provide ways of improving these methods and systems. On the other hand, organizational development refers to the application of behavioral science to planning development and strategies to improve the organization effectiveness. The organizational change consists of transformation in various aspects including structures, policies, outputs, and behaviors. These efforts are vital to improving the current prospects of the organization, empower the employees, and create a learning process for solving problems within the organization. Nadler and Tushman‟s Congruence Model This theory for managing change was built by Nadler and Tushman (23). It is also referred to as congruence model, and it is based on several factors that have an effect on the success of the change process. According to the congruence model, an organization is viewed as a system consisting of several sub-systems that explain external environment changes (Nadler and Tushman 17). The organization analyzes both internal and external change inputs and transforms them. It also acquires outputs that are used at different levels such as individual, team and total. These sub-systems are components of the transformation process. According to Nadler and Tushman (11), inputs can be obtained from both internal and external sources, and transformed into outputs. The Strategy The analysis of Alborz strengths, weaknesses, competencies, threats and opportunities will result in a strategy that the organization will implement. Sometimes a strategy is implemented after a conscious decision(Nadler 17). However, it can also be as a result of past methods that the organization used. If there is a gap between the decision on the strategy to use and the actual strategy used, the organization has always given more attention to the actual strategy. The change strategy is vital for analysis, particularly for the leaders. The Tasks While implementing its organizations strategy, it is crucial for an organization to define a set of tasks. These tasks are significant for its success and must be achieved to ensure successful implantation of the organization strategy. A task is defined as a listing, for instance, the roles of a particular position or duties performed by various functions such as marketing, production, finances, and others that the organization perform during its change process. At Alborz Insurance, the leaders always review the modifications in the fundamental tasks that occurred as a result of the change to enable a particular gap analysis. The Designed Structure and Systems This refers to systems or structures that the management may create to enable them to achieve the desired outcomes. Once the management defines and identifies tasks, they are linked together to form a relationship with various departments, divisions, and so on. The purpose of a structure is to ensure that there are efficiency and effectiveness during task performance. On the other hand, the systems of an organization refer to the mechanisms that the organization uses to accomplish its tasks and direct the efforts of its employees. Organization systems include information systems, production systems, human resource management systems, measurement systems, and many others. For some transformation, the organization hierarchy is considered to be significantly variable. Alborz management believes in having the right systems in place as a way of offering the best service to clients. Management appreciates that systems will change as time goes by, and those areas of the system that were useful will become obsolete. With a new system in place, management usually schedules employees for training but over time, the significance of the exercise fades away, and people tend to follow their traditional ways of working. That is why at Alborz, management schedules employees for periodic training sessions where the company reminds staff about what to prioritize on. In addition, the company allows different levels of managers to analyze the system differently and each to arrange customized training sessions for the staff at that department. As such, senior management has always examined the organization and created systems that work for individual departments but the managers’ work in harmony with other sections. Informal Structure and Systems These are the informal relationships among the employees within the organization, as well as the informal ways in which things are done to form the informal structure (Nadler and Tushman 37). Even though the managers identify the tasks that should be accomplished to achieve the organization strategy using formal structures, some things may occur unplanned. For instance, if there are friendly relationships among the employees, communication will be easy because the groups formed can provide support for the accomplished tasks increasing the organizations productivity. These informal systems include the organization culture, value, beliefs, norm, and managerial style. The organizations culture occurs as a result of its history and the current leadership. Culture acts as the control since it clearly defines acceptable and unacceptable attitudes, behaviors, and values, although this will vary across various organizations. In addition, other informal structural elements should be analyzed when considering initiating change, for example, informal decision-making process, power relationships, and political influences. The leaders have also recognized the critical employees that can assist or block transformation, especially from informal structures and systems. However, the most critical activity is identifying these individuals and ensuring that they contribute to the organization change. Understanding the emergent structures and systems that have the potential to influence and at times derail change is critical to increasing the likelihood of a successful change initiative. People The people in an organization perform tasks, using both formal and informal systems and structures. For this reason, it is vital that the employees’ knowledge and skills match what the organization needs. Understanding people in the organization and how they will respond to changes is significant in managing the change situation. Within an organization, there are certain key individuals that are crucial for its success. Leaders are vital in terms of achieving an organization mission. However, some individual with technical skills are also significant. At Alborz Insurance, higher level management comes up with roles each person performs and assigns the roles. The management reviews the environment over time and changes the roles where applicable to ensure the company remains competitive and relevant. The human resource management performs the task of recruiting suitable candidates and it puts in place periodic training sessions where the employees are taught about the changing dimensions of the environment and the role they should play to remain relevant. Leadership The organization has a good leadership in place that has acted as a link between its different parts. It is possible for management to create a successful organization or lead to its fall. That is why Alborz Insurance Management has put in place a series of simple executive and applicable general performance criteria that forms the basis for beneficiaries’ expectations and strategies of value streams to the processes, people, and all the other organization stakeholders. The management has put the performance measures into a place where each employee will view them easily on the right, scheduled and applied information well explained, from the CEO to the sales employees, allowing each to make decisions according to their daily status and performance. This way, the staff can plan their activities well in advance and make follow up for areas they did not fare on well. Scholars have documented an aspect that is obvious but unnoticed by many people in that a number of managers initiate thinking patterns that serve them and the organization to profitability. The problem is that a number of them do not change their management patterns over time, and this renders the company inefficient. Alborz has been able to stand out among competitors because its management team has carried out annual reviews to determine which products are more relevant in the market, and the company has adopted them and marketed them more. The company as well has dropped less profitable products that could attract high maintenance expenditure but generate less income. The Outputs These are the products and services that an organization provides in order to generate profits and meet other goals. Alborz produces affordable and relevant insurance products to the market that includes motor vehicle and home cover, fire and marine insurance, engineering and liability products and property and animal insurance. In the current environment, other outputs besides profitability are also important such as customer satisfaction, employee satisfaction, growth and development, and so on. In that regard, Alborz has put in place a dedicated customer care line that receives all customer complaints and answers any distress calls in case of emergency. The company conducts a detailed valuation of products to ensure clients insure their products at the correct face value. The same situation happens during making of claims where the company pays the right amount that puts clients in the same position they were before their loss. In addition, the company makes it easier for people to claim for losses through its dedicated recovery department and a record turnaround time. This shows that at the company, outputs are measured and defined in a similar way as return on investment or profitability, a factor that is synonymous with many successful organizations. According to Nadler and Tushman model, the success of the organization in producing desired outputs is part of the feedback that informs its resources components and modifies thinking about the organizations strategy. They also argued several critical things as is the case at Alborz Insurance. First, the organization’s system is dynamic; therefore, solutions will change over time with varying concerns of regulating bodies and customer needs. In addition, the similarity between components is crucial in establishing why the organization performs as it does. Also, the organization will structure its change mechanisms in a way that addresses the ever dynamic internal and external processes. This is because the industry processes are changing continuously so when the environment changes, the organization will examine the existing parameters and come up with structures that will perform well in the new environment. An example is when the economy is not performing well, and commodities are expensive; sales will reduce and so the company executives will introduce prudent money management policies. When the economy improves, they will spend money to market products and increase sales since the economic conditions favor high purchasing power. At the same time, insurance requirements keep evolving over time and people keep coming up with unique insurance demands like insuring animals, body parts and the company has covered them after analyzing inherent risks associated with such products. Issues Regulations for the insurance industry have changed over time, and the company is sometimes forced to change the policy terms of those insured (Burke& Litwin 531). It may be quite interesting to study and find out how those insured cope with the sudden changes in terms of their insurance cover and how the company goes about the process without making the clients worse off. The company should consider client feedback before making changes to existing products so that the customer can feel part of the change process at the company. The company is synonymous with having a large number of products under cover and majorities are performing exceptionally well. There are cases where some new products have not performed as per expectations and it may be important to analyze the process the company puts in place when determining viability of its new products and how it goes about advertising and maintaining them to make sure clients get to understand and appreciate them fully. Give that the company has a robust research and marketing, it is good to know why some of its new products do not pick up early enough leading to wastage of resources. The company should consider a thorough research on any new product and assess success rates and if possible roll it out on a pilot basis before introducing it on a large scale. That way it will minimize the occurrence of losses that arise due to new product failures. Alborz management says that its products are up to speed to market, maintain client operational efficiency and maintain information technology rationalization. So, the products enhance the customer experience and allow a seamless distribution of its agents. As an outsider, one may want to know how the company carries out its analytics before drawing policies for different items in a way that clients agree with. It may be important to analyze how the company goes about determining the amount of compensation. Therefore, getting to understand such information, I could love to have access to its analytics system and get to see how its staff uses client information to come up with tailor-made products. Change management is quite difficult for a number of organizations. Alborz has been able to transfer operations from one system to another seamlessly. Management has employed a unique method where its employees have been very supportive of the company puts in place. This has been partly because management involves staff in the planning and implementation of all its programs. The staff assists in integrating the architecture of the systems and they conduct program quality testing and give their approval before the company rolls out the systems. It may be important for me to participate in one of those rolls out exercises and get to see how the company conducts the activity from initiation up to completion. I will like to see the systems management put in place and how the conducts the various teams to ensure there are harmony and positive progress at work. Managing a company is a challenging role. An insurance company brings in more challenges given that a number of clients introduce fraudulent claims with an aim of making profits from the company. To be successful, a company must put in place a sound change management strategy that not only comes up with useful products, but also manages them well and ensures that the company does not lose revenue in the process of running its operations. Works Cited Burke, W.W. & Litwin, G.H. A causal model of organizational performance and Change, Journal of Management. 1992:523-545. Print Nadler, D.A. Champions of Change: How CEOs and Their Companies Are Mastering the Skills of Radical Change. San Francisco: Jossey-Bass, 1997. Nadler, D.A. and Tushman, M.L. Competing by Design: The Power of Organizational Architecture. New York:Oxford University Press, 1997. Nadler, D.A. & Tushman, M.L. A model for diagnosing organizational. 1980. Print. Read More