Organizational change is a process, which is undertaken by companies in order to move from the present to the future state, thus enhancing efficiency. The change usually involves a redesign of structures and cultures within the organization. It is possible to distinguish two types of change: evolutionary, which takes place gradually and has a narrow focus, and revolutionary. However, no matter what approach managers choose for the change process, it is crucial to conduct the change in a systematic and structured manner.
The first step in the organizational change process is action research, which allows to set goals and to plan a way to achieve them. It can be subdivided into 6 steps. Firstly, managers should diagnose the current situation and identify the desired outcomes. In the third and fourth steps, planned change should be implemented and evaluated. Finally, change should be institutionalized, so that all people within the organization commit to change implementation and facilitate continuous change process. This aspect is especially important in light of the Kurt Lewin’s force-field theory, which postulates that organization always face a trade off between change and resistance to change (Rue & Byars, 2003).
That is why it is so crucial to ensure employee devotion to change, thus minimizing opposition. Taking into consideration the forces of resistance, Lewin suggests a systematic approach to implementing change. In the first step he recommends to “unfreeze” organizations from their current state. Second step involves change implementation, while the last one recommends to refreeze the company in the new state, in order to avoid resistance. In addition to that, the company may implement strategies and tools, such as Total Quality Management, which could foster continuous change management and improve overall performance and efficiency.
One example of a company, which has successfully conducted a change process, is Hallmark Cards. In order to address low efficiency and long time-to-market for the greeting cards, Hallmark has redesigned its structure from functional to cross-functional. In this way, employees could work closer together, exchange ideas and improve productivity. Moreover, a new point-of-sales system allowed more information transparency and emphasized customer orientation. The overall change effort has demonstrated significant improvements in terms of productivity increase, competitiveness enhancement and a more pleasant working environment (Jones, 2009).
An example of an unsuccessful change effort was demonstrated by Toyota’s long-term expansion strategy. As the company was increasing its presence abroad, in particular in the U.S., it was trying to embrace a more decentralized approach to its operations. The core of Toyota business model, tight relationships with suppliers and partners, has been replaced by more cost-driven and decentralized management of partners. As a consequence of this shift the company lost control over distributors, which resulted in major car recalls and customer loss in 2008-2010 (Connor, 2010).
Change management is an essential component of any organization. It has to be implemented regularly even in the most prosperous organizations, since it allows to adjust to the fast-changing market environment and to respond faster to customer demands.
References
Connor, M. (2010, January 31). Toyota recall: Five critical lessons. Business ethics. The
Magazine of Social Responsibility, Retrieved from http://business-ethics.com/2010/01/31/2123-toyota-recall-five-critical-lessons/
Jones, G. R. (2009). Organizational Theory, Design and Change (6th ed.). Upper Saddle River, United States of America: Pearson.
Rue, L. W., & Byars, L. L. (2003). Supervision: key link to productivity. (8th ed.). New York,NY: McGraw-Hill.
