Introduction
Change management is an important concept for any organization working at any level. It is a continuous process of renewing structure, resources, direction of an organization with time. The aim of this essay is to know why the change management is necessary for contemporary organization. Change management in a contemporary organization is very important as it’s an important feature of an organizational life, whether present or in future. Therefore, the change in an organization cannot be regarded as unimportant and to manage the change is a necessary part of this process. These changes are now the part of the organizational strategies. Due to the importance of change management in organizations, this domain is becoming more vital and necessary for the managers. Management needs extraordinary skills to control and manage these changes. And in this regard Leadership is the primary task of management of organizations. In this essay, we are focusing especially on change management in contemporary organizations as these organizations are an important category of organization, and they are expanding and promoting more and more in the market as compared to the traditional organization. The aim of the essay will be achieved by reviewing different studies, and it will be explained by a real life organizational example i.e. Shell`s tough love. This essay will include the theoretical background of the topic as well as a real organizational example and then the conclusion of the essay (David, 2001).
Theoretical background
The contemporary organization is such an organization in which tasks are divided into different groups and coordinated to different environmental factors (Wilson, 1992).
In response to demand for the marketplace, the contemporary organization structure consists of
Team structure (Organization is divided into groups and teams to perform organizational work)
Project structure (Employees are assigned work on different project one after other)
Matrix structure (Work is assigned to specialists from different functional departments)
Boundaryless organization (The boundaries between employees are broken down, they contact with each other freely and share knowledge regarding particular job)
Autonomous internal units (Organization consist of independent, decentralized units)
Change management is a technique that includes the shifting of a current state to the desired future state by proper management and control on the processes involve in it. It’s an organizational process of helping employees to participate and accept the changes in the current business organization. This shifting can be at the following level (David, 2001).
Individual
Teams
Organization
But the focus of this paper is on change management in contemporary organizations.
John Kotter has defined this process as “The utilization of basic structure and tools to control any organizational change effort.”
The environment is changing globally, competition is severe all over the world, and the organization has to change them accordingly. Whoever does not change with the environment will eventually fall. This change can be in different forms. It has four main basic forms i.e.
Planned change (It’s a deliberate change in the organization)
Unplanned change (It is an imposed change by government or economy)
Radical change (It’s a change in firm`s processes, systems, strategies, core values and structures to regain competitive advantage)
Transformational change (It’s a change in which organization drastically transform themselves)
But the focus of the paper is the planned approach to change in the contemporary organization.
If given a choice between change and stability, an organization will always go for the stability as it is more predictable. But the change in an organization is a must process in response to various forces inside and outside (Zink et al, 2008). Forces for change can be
External (Nature of Workforce, Technology, Economic shocks, competition, social trends)
Internal(Declining effectiveness, crisis, employee expectations, working climate)
Change management is an important part of every organization as it is not an easy task to manage the change in the organization (Price & Chahal, 2006). When we think of managing change, we are meant to be making changes in a systematic and planned fashion that is also our focus of this essay. Managing change in an organization requires different skills like analytical skills, human skills, technological skills, etc. But there are different resistances to change involve in the whole process that can hinders and slow down the process of change in the organization (Wilson, 1992).
These resistances involve the self-interest of the employees, fear of the unknown, fear of failure, poor communication among the concerned entities, personality conflicts, politics both external and internal, cultural values, etc. But this is the stage where managing change plays the important role (David, 2001).
In a contemporary organization, these resistances are considered a form of feedback and this feedback used by the management very productively to manage the change process simply. Such organizations plan for all these resistances and make strategies to use them as a feedback (Wilson, 1992).
Managers manage these resistances to change by effective communication of goals of change among respected entities, engaging and involving employees and motivate them to participate in the change process, support them emotionally, leadership, negotiation, doing efforts at the group level, etc. (Todnem By, 2005).
Change management in SHELL
Shell is a well-known name in the field of oil and refineries. In 2004, Shell was bumped by the oil reserve crisis that jolted the share price of the company. This critical situation was compounded by the unexpected departure of the chairman, Sir Philip Watts. Then the new chairman Jeroen van der Veer after his appointment analyzes the whole situation and then decided to transform the structure and processes of the organization (David, 2001).
Shell is a contemporary organization as it involves the teams and groups to perform different tasks. Also, professionals are appointed on projects to complete them on time. After the decision of new chairman to transform the organization, management of company identified global and standardized processes. These would have impact 80+ shell units working in different countries. Changes are important for the survival of the company, but they proved unpopular in the short run as Shell still lose market share in different countries. Many units balked after the situation (Sziklai et al, 2002).
That was a planned change in the organization, and it would affect the organization in the long run as it includes the change in most of the units of the Shell. This change was a result of both external and internal forces as it was due to decrease in market share (competition) as well as a crisis (Aladwani, 2001).
But as we know that for a change to show its good results, everyone in the organization had to follow the new systems and processes. So the leadership of organization focuses on the adoption of the change in processes for everyone (Price & Chahal, 2006).
The message of the Chairman Van Dar Veer was that “simpler and standard change in processes across all units in different countries and regions that benefited Shell globally outplayed local, individual needs.” (Kramer & Magee, 1990)
Although this type of change faces resistance from employees as it is a contemporary organization it uses the resistance of the employees as the feedback. To use the resistance face from employees as a feedback team of experts which includes senior leaders, in-house experts, implementing consultants and external change expert was made. They had picked because they had both technical understanding and could provide change leadership. They identified the persons and briefed them who would be affecting by the change in processes, who would face risks and problems by the change before any real change implementation (Innes & Mitchell, 1990).
In most of the cases in change programs, there is always a danger that change management will back away from implementation process as it is a very difficult task to complete. But in Shell`s case, the management involve in the change process among units started with the Chairman as well as they ended up with him till the project is wholly implemented (Aladwani, 2001).
After the change, Shell is at the healthier position than before, and it resulted in ongoing change and became a successful organization once again (Anderson & Anderson, 2010).
Conclusion
This era is a globalized era; organizations need to change themselves to fit with the global as well as the local environment. They face different dynamic and inevitable situations that are taking place rapidly in the market. Due to these radical changes, competitions is also becoming severe among the organizations. The change by each and every organization depends on the need and problem faced by the organization. The change can be minor or major. It can be global or local, technological or traditional, etc. But change is a must with the passage of time, and if the organization fails to change, it eventually fails to compete in the market. As change is now a must part of activities, Change management becoming more and more important because thinking of a change is the first step but implementing and managing the change in the organization are the most important stages. Without good management skills, an organization cannot implement the change according to the needs (Aladwani, 2001). Therefore, successful change management involves high skills of management. Implementing change in a contemporary organization and managing it is easier as compared to traditional organizations as contemporary organizations already involve teamwork, groups, motivation, leadership, project structure, etc. So the implanting change in such organizations is easier than other. Employees in every case of change resist first then by successful change management they care convened by the team of change management as organizations cannot be static and in long run change is a necessity. If the organization seeking change is successful in effective planning and its execution, the returns will be in most cases in the favor of organization. To have continuous success organizations need to invest money and time to identify the areas that required changes. People need the motivation to accept and endorse the change. They should be clear about the aim and goal of the change in the organization and how it will benefit everyone. As in Shell case, they have a proper team for performing all the processes of the implementing and managing change among all the units. Most importantly, they have a leader among them i.e. their new chairman Van Dar Veer, whose leadership skills along with his team made it possible to implement effectively and efficiently the whole process.
References
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