Towards a Comprehensive Understanding of Readiness for Change - Assignment Example

Organizational Analysis Name Institution Course Date Organizational Analysis 1.2 Short Literature Review Organizational change Scholars and executives alike have asserted that businesses are evolving very fast which creates uncertainty about the future. The changing nature of the business environment has created a need for organizational change in many firms. According to By (2005), organizational change is the renewal and rethinking process that firms undergo for strategic direction. Change is an integral part of any company. Kotter (2007) has conducted a research on different companies working towards improving their performance through different strategies such as restructuring their corporate culture, improving the quality of their services, reengineering, etc. He noted that all these efforts were based on the goal to change how the business is done to boost competitiveness in the challenging market environment. Lewis came up with a three step model that explains how change can be implemented successfully. The three steps include unfreezing, moving and refreezing (Garcia and Gluesing, 2013). Unfreezing process involves preparing a firm for change by creating the desire in employees and relevant environment associated with desired state. Moving process involves the change in structure, attitudes and behaviours to accommodate change. And lastly the refreezing process involves stabilizing the change by modifying the organizational policy, culture and structure. One important determinant of change is organizational culture according to Barclay (2009). Organizational Culture Change readiness can be considered as the acceptance, attitudes and intents of employees towards organisational change (Johansson et al., 2013). Nevertheless, people’s thoughts and behaviours cannot be thought as being separate from social processes since they are influenced by their surroundings. According to Holt et al. (2007), employee’ reaction to change will be contingent with the rules and values of an organization. Organisational culture is therefore glue that brings individuals together to enhance their readiness for change according to Barclay (2009). Burnes (2004) has defined organizational culture as the values, norms and beliefs that guide employees’ behaviour and undertaking in a firm. The concept has evolved to explain the patterns of organizational behaviour. According to Armenakis, Brown and Mehta (2011), organizational culture consists of two important assumptions that are shared within an organization; values and beliefs. Numerous scholars have stressed the importance of organizational culture to the success of a company (Burnes 2004; Holt et al. 2007). For instance, Balogun and Hailey (2004) argue that successful companies are differentiated from unsuccessful one on the basis of their corporate culture. Effective organizational culture has a powerful influence on employees and can improve the overall organizational performance. Implication of Culture on Organizational change Corporate culture is very important in ensuring change readiness. The influence of corporate culture on change process has been studied by many scholars. Burnes (2004) carried out a research to determine the influence of culture on total quality management. In the research, the author found out that corporate culture is the primary reason for ineffective implementation of total quality management according to Barclay (2009). TQM involves the change in the way a company does business that require changes in values and beliefs that make up the concept of organizational culture. There are many ways in which corporate culture influences change readiness. According to Jacobs et al. (2013), the dimensions of organizational culture that are important in enabling change include motivation, organizational identification, flexibility, and trust. To clearly determine how employees can be motivated during the change process, companies need to identify whether they are motivated by external or internal forces. Motivation is an important factor influencing the success of a change process. According to Holt and Vardaman (2013), employees are motivated when they are confident about the future. Therefore, a culture that promotes open communication between the employees and the senior management will increase motivation of employees (Armenakis, Brown and Mehta, 2011). On the other hand, organizational identity refers to the fit between the employees’ values and a firm’s values which affects change readiness. By (2005) argue that when there is alignment of values within a firm, the change process is likely to be successful. Alignment of values is made possible through a culture that supports free communication and effective leadership practices. Holt et al. (2013) argue that one factor that will enhance change effectiveness is the creation of an organizational structure that is flexible. Flexible organizational structures are linked to innovation, adaptability, leader credibility and morale. According to Burnes (2004), organizational structures that are flexible contribute to openness to change. While formal structures make organizations more rigid, flexible structures stimulates employees to take part in the change process. Therefore, Johansson et al. (2013) argue that flexible organizational structure serves as a foundation for change management efforts. 1.3 Application Exercise Constraints to the Implementation of Organisational Change Financial Crisis Since companies exist in some context, they are influenced by external factors such as technology, market condition, economic recession and social and political changes. Economic condition of any country may be an obstacle to organizational change. Economic changes reflect on the financial capabilities of an organization. Financial crisis has affected the efforts of ANZ bank to undertake change (Graetz et al., 2011). The global economy has been faced with a serious financial crisis which has affected the financial capabilities of the company. For any change process, financial resources are required. Therefore, in the effort to restructure the organization, the ANZ bank should take action to minimize the effects of financial crisis (Graetz et al., 2011). Resistance to change Resistance to change is the reaction of employees to change process. Resistance to change may take many forms such as foot-dragging, petty sabotage, rebellions and disengagement (Gareis, 2010). Employees often resist to change when they perceive it as a threat. Initially, ANZ Bank was not upfront with their employees and stakeholders about the implementation of change. The management sacrificed employees’ satisfaction in its endeavour to restructure the organization (Graetz et al., 2011). Employees were not fully involved in the change process which affected their morale and commitment to the bank. It is therefore important to communicate to the employees about change process and involve them in the plan to eliminate resistance. Poor Management Effective management is important in implementing change. Poor management practices can deflate employee morale, increase company’s expenditure, cause stress and high employee turnover. Leadership and management determine how an organization operations and how employees are faring. According to Obgonna and Lloyd (2000), effective management and leadership is more important than pay level. One challenge facing ANZ bank is poor management that can potentially affect its change efforts. Reports have indicated that there is a high turnover rate in ANZ bank as a result of poor management. In 2008, two senior employees resigned from the bank following the reports of breach of the bank’s codes (Graetz et al., 2011). The management has been considered ignorant of the risks associated with the operation of the business and the expectations of the employees. Taken together, the inability of the management to operate the business in an effective manner will result to low employee morale and commitment which will affect the change process (Smith, 2002). Poor Organisation Culture ANZ bank has established a mission to transform its operations in order to enhance its financial performance, build on sustainable leadership, and strengthen revenue. However, the study by McKinsey & Co established that there were discrepancies between bank values and employees’ values. Many employees in the bank were concerned about the values dreamed up by the management (Boonstra, 2013). Overall, the employees’ values did not coincide with the values of the organization. The bank had forgotten to live values based on employees which affected the implementation of the organizational change. In addition, the structure of the bank did not support open communication between the management and the employees. The McFarlane did not have a close relationship with the employees and this caused problems in the communication of change (Graetz et al., 2011). The ability of the CEO to manage personnel was questioned and the senior managers lagged behind in establishing a connection from the top management to the subordinates which could affect the implementation of organizational change (Balthazard, Cooke and Potter, 2006). Steps towards Mitigating Constraints Open Conversation One dimension of organizational culture is management structure. ANZ’s culture does not support open communication between the senior level management and the employees (Boonstra, 2013). Effective implementation of change requires open communication between the management and the subordinates. One way to enhance organizational culture and eliminate employee resistance is to communicate to the employees and the stakeholders about the change initiative (Balthazard, Cooke and Potter, 2006). Before the transformation of the bank can start, it is important for the management to hold a meeting with all its employees and key stakeholder and share as much information about the changes that would take place. Also, managers should also allow the employees to express themselves and answer any query that may occur. This approach would ensure effective implementation of change (Balthazard, Cooke and Potter, 2006). Employees Participation Resistance to change can be eliminated through employees’ participation. When making major changes in the bank’s processes and polices, it is important to involve the employees and have them exert input on the changes (Smith, 2002). This is a more proactive approach as it allows employees to influence the change with their creative and innovative approaches and ideas. When staff participate in the change effort, it will be more likely to support the change rather than resist it (Boonstra, 2013). This approach will lower resistance and minimize change costs since tasks that required hiring of additional workers would now be conducted by the employees. Training and Development One way to overcome resistance and enhance the chances of effective change implementation is to train employees about the change efforts in advance (Balthazard, Cooke and Potter, 2006). ANZ should conduct on-the-job training and education of employees to assist them to see the logic behind change and acquire skills required during the change process. In addition, ANZ should educate the employees about the values and objectives of the change efforts and how they can make contribution in achieving the big picture (Speight, 2000). In addition, the company can provide leaders with supervisory skills that they need in implementing change (Obgonna and Lloyd, 2000). One major challenge facing ANZ bank is poor management. Leaders in the company lack the necessary tools and skills required in enhancing employee performance in the change process and in mitigating resistance to change. Therefore, leaders should undergo supervisory training to educate them on the importance of their involvement in the change efforts and their contribution during the process (Jones et al., 2008). Creating a Common “big picture” Employees’ values did not coincide with the values of ANZ bank. Therefore, to solve this issue, the company should ensure that it has a vision that every employee can relate to. The company will need to establish values based on employee input rather than based on management decisions (Caldwell, Herold and Fedor, 2004). When employees feel they are part of the organization through shared vision, they tend to focus on achieving the big picture. References Armenakis, A., Brown, S & Mehta A 2011, Organizational culture: assessment and transformation. Journal of Change Management, 11(3), pp. 305-328. 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