Principles of Management, Organizational Change - Article Example

Organizational Change Your Name, College/University Name, 18 August 2008 INTRODUCTION In the global environment, challenges faced by the companies are rapidly increasing. Some of the challenges include organizational culture, organizational change, workforce diversity, discrimination, work stress etc. The importance or need for strategic change is briefed. The relevant management theory is discussed and the famous Kurt Lewin’s Change process is explained with McDonalds change to technology as reference. The possible outcomes of the change programme at McDonalds technological up gradation are evaluated using Lewins three step process of change management. A manager's efficiency and effectiveness improves with strategy planning. Finally, the transition in challenges and managing them are discussed and concluded. Organizational culture: When one wants to change an aspect of the culture of an organization one has to keep in consideration that this is a long term project. Changing corporate culture is very hard and employees need time to get used to the new way of organizing. Changing an existing culture will be even harder to change. Organizational Change: Change has become a way of life for most organizations. Pressure from increasing competition, globalization, technological developments, and other forces has created an environment that rewards an organization that are capable of identifying trends and issues and responding quickly to them. Change is the only permanent thing in this world and when organizations change there are many forces of resistance against the change and culture is one of the important forces of resistance. HRM Techniques play a major role in changing the organizational culture. The major Interventions used in bringing a change include Human processual, Techno structural, Socio technical systems and organization transformation. The various HRM Techniques include Action research, Organizational development, Sensitivity Training, Survey Feedback, Process Consultation, Team Building, Inter group development, Appreciative enquiry. Managing Diversity: (Workforce Diversity is the concept that organizations are becoming more heterogeneous in terms of gender, race, ethnicity and inclusion of other diverse groups.) Demographic changes (women in the workplace, organizational restructuring, and equal opportunity legislation) will require organizations to review their management practices and develop new and creative approaches to managing people. NEED FOR CHANGE Change is inevitable in the life of an organization. In today’s business world, most of the organizations are facing a dynamic and changing business environment. They should either change or die, there is no third alternative. Organizations that learn and cope with change will thrive and flourish and others who fail to do so will be wiped out. The major forces which make the changes not only desirable but inevitable are technological, economic, political, social, legal, international and labor market environments. Recent surveys of some major organizations around the world have shown that all successful organizations are continuously interacting with the environment and making changes in the structural design or philosophy or policies or strategies as the need be. The essentials of change include risks and uncertainties, bring challenges to the organization, may bring new business opportunities, may be used by an organization for moving its business operation to next higher state of business operations, and may enable the organization to abandon some negative cultural values, some outdated and obsolete practices. Change can be used to raise motivation, lead to satisfaction for workers. According to Barney and Griffin, “the primary reason cited for organizational problems is the failure by managers to properly anticipate or respond to forces for change.” Thus in a dynamic society surrounding today’s organizations, the question whether change will occur is no longer relevant. Instead, the issue is how managers cope with the inevitable barrage of changes that confront them daily in attempting to keep their organizations viable and current. Otherwise the organizations will find it difficult or impossible to survive. MANAGING PLANNED CHANGE A planned change is a change by the organization; it does not happen by itself. It is affected by the organization with the purpose of achieving something that might otherwise by unattainable or attainable with great difficulty. Through planned change, an organization can achieve its goals rapidly. The basic reasons for planned change are: To improve the means for satisfying economic needs of members To increase profitability To promote human work for human beings To contribute to individual satisfaction and social well being The planned change process may comprise, basically the three following steps of planning for change, assessing change forces, implementing the change. These steps are applied to a technological change at McDonalds. The sales people were given a hand held device after each delivery is made at the customer place. This is to monitor the performance of the sales people and evaluate them by the manager based upon the time taken to deliver. PLANNING FOR CHANGE PROCESS The first step in the process of change is to identify the need for change and the area of changes as to whether it is a strategic change, process oriented change or employee oriented change. This need for change can be identified either through internal or external factors. Once this need is identified the following general steps can be taken: 1. Develop new goals and objectives: The manager must identify as to what new outcomes they wish to achieve. This may be modification of previous goals due to changed internal and external environment or it may be a new set of goals and objectives. In the case of McDonald, the goal will be to increase the speed of order delivery through proper control using the hand held device. 2. Select a change agent: The next step is that the management must decide as to who will initiate and oversee this change. One of the existing managers may be assigned this duty or even sometimes specialists and consultants can brought in from outside to suggest the various methods to bring in the change and monitor the change process. Here the change agent will be the manager in charge of the sales people. 3. Diagnose the problem: The person who is appointed as the agent of the change will then gather all relevant data regarding the area of problem or the problem where the change is needed. This data should be critically analyzed to pinpoint the key issues. Then the solutions can be focused on those key issues. The problem here is the slow delivery of orders resulting in sales depreciation. 4. Select Methodology: The next important step is to select a methodology for change; employee’s emotion must be taken into consideration when devising such methodology. The methodology used by McDonalds is to increase the sales by applying technology. 5. Develop a plan: After devising the methodology, the next step will be to put together a plan as to what is to be done. For example, if the management wants to change the promotion policy, it must decide as to what type of employees will be affected by it, whether to change the policy for all the departments at once or to try it on a few selected departments first. The plan of monitoring the sales people through the technical hand held device is pilot tested. 6. Strategy for the implementation of the plan: In this stage, the management must decide on the ‘when’, ‘where’ and ‘how’ of the plan. This includes the right time of putting the plan to work, how the plan will be communicated to the employees in order to have the least resistance and how the implementation will be monitored. After the initial test success, McDonalds strategically adopted the same control mechanism to monitor its sales people. ASSESSING CHANGE FORCES The planned change does not come automatically; rather there are many forces in individuals, groups and organization which resist such change. The change process will never be successful unless the cooperation of employees is ensured. Therefore, the management will have to create an environment in which change will be amicably accepted by people. If the management can overcome the resistance, change process will succeed. In a group process, there are always some forces who favor the change and some forces that are against the change and thereby a balance is maintained. Kurt lewin calls in the “field of forces”. Lewin assumes that in every situation there are both driving and restraining forces which influence any change that may occur. Driving forces are those forces which affect a situation by pushing in a particular direction. These forces tend to initiate the change and keep it going. The driving forces of McDonalds will be the necessity to technologically upgrade, professionalism, management, competition. Restraining forces are the forces that act to restrain or decrease the driving forces. McDonalds restraining forces would be the opposition from the sales personnel against the change, politics. Equilibrium is reached when sum of the driving forces equals the sum of the restraining forces as shown in the following figure: There may be three types of situations, as both driving and restraining forces are operating: 1. If the driving forces far out weight the restraining forces, management can push driving forces and overpower restraining forces. 2. If restraining forces are stronger than driving forces, management either gives up the change programme or it can pursue it by concentrating on driving forces and changing restraining forces into driving ones or immobilizing them. 3. If driving and restraining forces are fairly equal, management can push up driving forces and at the same time can convert or immobilize restraining forces. Thus, to make the people accept the changes, the management must push driving forces and convert or immobilize the restraining forces. The management of McDonalds forced the issue and made it mandatory for each sales personnel to use the hand held device for faster communication and reporting purposes. McDonalds driving forces exceeded the restraining forces and McDonalds used the push strategy. IMPLEMENTING CHANGE Once the management is able to establish favorable conditions, the right timing and right channels of communication have been established the plan will be put into action. It may be in the form of simple announcement or it may require briefing sessions or in house seminars so as to gain acceptance of all the members and specify those who are going to be directly affected by the change. McDonalds implemented the plan by training all its sales personnel in using the hand held device and the benefits of it. After the plan has been implemented there should be evaluation of the plan which comprises of comparing actual results to the objectives. Feedback will confirm if these goals are being met so that if there is any deviation between the goals and actual performance, corrective actions can be taken. Feedback was collected from the sales personnel and the customers for this change. CHANGE PROCESS Any organizational change whether introduced through a new structural design or new technology or new training programme, basically attempts to make employees change their behavior. Unless the behavioral patterns of the members change the change will have a little impact on the effectiveness of the organization. Behavioral changes are not expected to be brought about overnight. A commonly accepted model for bringing about changes in people was suggested by Kurt Lewin in terms of three phase’s process: - Unfreezing, Changing, Refreezing. 1. Unfreezing Unfreezing means old ideas and attitudes are set aside to give place to new ideas. It refers to making people aware that the present behavior is inappropriate, irrelevant, inadequate and hence unsuitable for changing demands of the present situation. The management of McDonalds educated the sales people on the drawbacks and flaws of the existing system and they communicated the need for change. According to Edgar Schien the following four elements are necessary during this unfreezing phase:- • The physical removal of the individuals, being changed from their accustomed routines, sources of information and social relationships. • The social support must be eliminated and undermined. • Demeaning and humiliating experience to help individuals, being changed, to see their old attitudes or behavior as unworthy and think to be motivated to change. • The consistent linking of reward with willingness to change and of punishment with willingness to change. Unfreezing thus involves discarding the orthodox and conventional methods and introducing dynamic behavior, most appropriate to the situation and thus people are made to accept new alternatives. At the end of the unfreezing stage, McDonalds was successful in persuading most of its sales personnel that the existing way of selling items has lead to the drop in sales and they need a new mechanism to overcome this issue. 2. Changing Unlike unfreezing changing is not uprooting of the old ideas, rather the old ideas are gradually replaced by the new ideas and practices. In changing phase new learning occurs. The necessary requirement is that various alternatives of behavior must be made available in order to fill the vacuum created by unfreezing phase. During the phase of changing, individuals learn to behave in new ways, the individuals are provided with alternatives out of which choose the best one. McDonalds managed to change the behavior of the sales people and gradually make them accept to the new idea before testing the change. Kelman explains changing phase in terms of the following elements:- Compliance: - it occurs when individuals are forced to change either by reward or by punishment. Internalization: - it occurs when individuals are forced to encounter a situation and calls for new behavior. Identification: - it occurs when individuals recognize one among various models provided in the environment that is most suitable to their personality. 3. Refreezing Refreezing is on the job practice. The old ideas are totally discarded and new ideas are totally accepted. Refreezing reinforced attitudes, skills and knowledge. He practices and experiments with the new method of behavior and sees that it effectively blends with his other behavioral attitudes. McDonalds made the hand held device a mandatory one to be carried by its sales people in Europe and was successful in making the change a habit. Ferster and Skinner have in this connection introduced the main reinforcement schedules namely- Continuous and Intermittent reinforcements. Under continuous reinforcement individuals learn the new behavior within no time. And intermittent reinforcement on the other hand, consumes a long time but it is has the greatest advantage of ensuring a long lasting change. Conclusion The world's increasing globalization requires more interaction among people from diverse cultures, beliefs, and backgrounds than ever before. People are now part of a worldwide economy with competition coming from nearly every continent and hence for this reason, profit and non-profit organizations need diversity to become more creative and open to change. Managing diversity remains a significant organizational challenge and managers must learn the managerial skills needed in a multicultural work environment. Managers must shift their philosophy from treating every one alike to recognizing differences and responding to those differences in different ways and at the same time avoiding discrimination and in the recent trend, supervisors and managers must be prepared to teach themselves and others within their organizations to value multicultural differences in both associates and customers so that everyone is treated with dignity. As a result of these step by step changes made by McDonalds, its sales were looking up with most of its sales people working hard to meet the deadlines. To Conclude, Change is the only permanent thing in the world. Companies are now in a position of ‘differentiating to survive’ in the existing competitive world. Organizations must change themselves according to the environment and must develop core competencies acting as their unique selling proposition (USP) for mere survival. To bring about these changes, all accepted managerial concepts must be taken into account and keeping them as the base for managerial decision making, new innovative concepts and models must be developed to sustain competitive advantage. References 1. Stephen P. Robbins, Organizational Behavior, Prentice Hall of India, Tenth Edition. Pg. 14-15. 2. Garry Dessler, Human Resource Management, Eastern Economy edition, Pg 25-57. 3. Randy L. Desimone, Jon M. Werner and David M. Harris, Human Resource Development, Pearson education. Pg.621-634. 4. Francis Cherunilam, Business Environment, Himalaya Publishing. Pg. 499-508. 5. Bachon Nicholas, Storey John, British Journal of Industrial Relations, Vol. 38, No. 3, September 2000 6. Cummings & Worley, Organization Culture and Change , 2005, page 490 - 494 7. Black Enterprise. (2001). Managing a multicultural workforce. Black Enterprise Magazine (July). 8. Devoe, Deborah. (1999). Managing a diverse workforce. San Mateo, CA: InfoWorld Media Group. 9. Esty, Katharine, Richard Griffin, and Marcie Schorr-Hirsh (1995). Workplace diversity. A managers guide to solving problems and turning diversity into a competitive advantage. Avon, MA: Adams Media Corporation. 10. Koonce, Richard. (2001). Redefining diversity: It's not just the right thing to do; it also makes good business sense. Training and Development, December. Read More