Management Fundamentals
Executive Summary
Organizational change is a transition process from the current state to a future aspired state in a company. In business enterprises, organizational change is extremely significant as firms have to mould and adjust themselves to suit existing changes in market, technology, economic, political and other external factors. Effective change management is a mixture of science and art. Expert practitioners of change management are those who strike a balance between rational information by driving certain approaches having extreme insight of emotional drivers. Change management is to have thorough knowledge about the requirements of a particular business venture and accordingly using accurate mechanisms for delivering and implementing change. Successful change management efforts require strategic and insightful management for an organization to correct itself on its path to implement change. Also organizations which strategise and then execute the change management have a competitive edge especially because their organizational performance is enhanced due to planned change activities.
In the last five years, our organization has gone through several small changes in systems and processes especially by upgrading and embracing the latest technology and further foray into other foreign locations. However, entering alien locations was a disruptive innovation process which came into practice only the last year and it led to major restructuring of the organization. At the same time, in order to monitor success all the strategies implemented were continuously assessed and accordingly, if needed, the existing implementation plan was changed.
Introduction
Academic scholars have previously tried to determine certain factors which necessitate the organizational change. A heated debate is ongoing which tries to find out certain factors which help in successful organizational transition. There are a number of sequences which gets unfolded especially when an organization is going through change. These may be a restructuring of the organization, developing or new forming additional groups, organizational growth and innovation, changes in job functions and career paths of individuals and the like (Cameroon & Green, 2012).
In order to survive in an ever changing and competitive world it is very necessary to embrace change. Thus, change management may be explained as a means which is structured in order to transmit or shift people, teams and the overall organization from the present state to an aspired state in the future. The process of organizational change aims to empower individuals to embrace and accept change in their organizational environment. Organizational change occurs due to an alteration in the management systems and structures or implementation of a new process or technology or implementing a new control process to be followed by superiors and subordinates. A change may be implemented in the entire organization or in a specific department, division or even a team. However, the individuals being a part of the organizational change process has to be counselled by the human resource team to embrace and accept change. This is because there is a natural reaction of resisting change due to individual’s foreseeing imminent danger or reluctance to accept new structures, processes and systems.
In today’s competitive world it is essential for organizations to constantly innovate and adapt the latest technologies, systems and processes in order to remain in the market. In most organizations, change is associated with strategic planning and implementation. There may be several factors behind imposing a change in the organization. These may be changing rules and regulations, technological change, change in the senior management and the like. Effectively managing change in an organization may be dependent on accurately identifying certain complements among practice, strategy and technology. It is essential for superiors to first plan and formulates a strategy coordinating with the entire interactions of essential mechanisms of a business enterprise. This is mainly because the role of technology and recent paradigms of organization has eliminated certain barriers like space, inventory buffers and time and this makes operations to be more competitive. The linkages between the above mentioned constructs lead to an acceleration of issues relating to change management processes and systems and hamper smooth interactions between all forces of the organization (Seddon, Calvert & Yang, 2010).
It has been witnessed that in some instances the organizational change is implemented from the top to the bottom level. This approach is a top-down approach and here change management process commences in the very top level of the organization. This kind of example was observed in Apple when Steve Jobs rejoined the organization in the year 1997 as the Chief Executive Officer. He implemented a series of change management measures which trickled from the very top level and was effectively passed down to the bottom of the organizational hierarchy. This kind of approach helps in suiting organizations best because the decision making and strategic formulation is made by the senior management team. Moreover, this team are also in a position to enjoy a systems perspective to tackling change management (Sminia & Nistelrooij, 2006).
However, this approach is suited only for change management approach. A mechanism to promote organizational development commences from the bottom of the line. Also the processes of change management and organizational development have to be simultaneously implemented in order to aim for organizational success. An essential part of organizational development is knowledge management and sharing competencies. In today’s cut throat competitive world, organizations are plagued with the challenge to cut costs and sharing competencies and key knowhow and skills among employees helps in attaining higher levels of performance with shared resources and this leads to considerable reduction in costs.
Despite all the above stated importance of organizational change implementation, it has been witnessed that most change efforts fail miserably. At least 70 percent of business projects may not attained desired goals. The main reason behind this is that organizations fail to strike the right balance between product mix, technology, structural and strategic issues, available resources and most importantly the employees in the organization. Despite academic scholars highlighting the importance of communication and coordinated change efforts, superiors still find it extremely difficult to handle such situations. An example of coordinated change and effective communication process was established after Steve Jobs rejoined as CEO of the company in the year 1997. Although he interacted only with his in-group members and down the hierarchy employees had not even communicated with him, they were very sure of their job functions and had clear communication regarding all policies, procedures and certain updates that the company shared with them. This mechanism is extremely difficult to implement and can only be possible if there is excellent coordination between all employees. For this to happen, it is essential to have an effective and an efficient leader who can constantly coach, guide and monitor performance of the organization (Milliken, 2012).
There are several mechanisms which organizations apply in order to manage organizational change process. The contingent perspective method is one such tool which is used by organizations to outline circumstances wherein a specific approach is thought to help in fitting and timing the approach to the essentials required for processing organizational change. However, there may be certain hindrances as this process advocates alternating diverse mechanisms as time passes. This may lead to unnecessary delays and confusion and may not lead to acquiring the desired objectives. Another process is that of a top – down strategic change management process and simultaneously conducting a bottom – top organizational development process in order to successfully implement change management. However, this process needs leadership expertise so as to instil commitment, trust and confidence among all affected parties to the change. However, empirical research conducted on both approaches has determined that the second approach to managing organizational change helps in producing better outcomes than the first one (Sminia & Nistelrooij, 2006).
The change management strategies should ideally consist of four stages. The first stage involves in determining the business practices which should be adapted and implemented by superiors for attaining certain desired goals and objectives. The next stage should concentrate on successful interactions among these practices and processes and anticipating the possible hindrances in transition from one system to another. The next stage involves in interacting with the various stakeholders involved so that valuable suggestions and feedback may be obtained from them on the proposed modifications. The last stage has to do with disclosing systems interactions which may act as benchmarks for change locations, sequence, feasibility and pace.
Innovation and change management
The process of developing a new product or process and introducing it to a market or a foray into a new market or new location with a product or service line is also termed as innovation. The process of innovation is synonymously associated with the risks of market uncertainty and failure. Hence, before embarking on product or service innovation it is essential to pre test it before actual implementation. Innovative opportunities exist both inside and outside the organization. Inside the organization, innovation may be in the form of process incongruities, unexpected happenings, market changes, changes in the structure of the industry and needs of the process and system. Innovation opportunities outside the organization may exist in the form of identifying changes in the demography, new knowledge and perception changes.
Innovation has a significant role to play in change management policies in organizations. Most companies are constantly innovating and imposing either minor or major changes in order to drive for enhanced organizational success. In case of imposing continuous and gradual innovation, it does not necessary lead to extreme unrest in the organization. This is because small changes may not be implemented to the entire organization but in some divisions, teams or departments and this do not impact the organizational environment drastically. However, if change management in an organization is imposed due to discontinuous innovation then it is essential for change agents to prepare employees for the change process. Implementing organizational innovation in organizations is extremely challenging as they are highly complicated and may have multidimensional issues. In order to implement organizational innovation it is essential for companies to have extensive knowledge, which may be outside the surroundings of the organization.
Organizational innovation may impact the organizational structure with extensive structural redesign. Such changes may impact entire departments or divisions of the organization, the entire company or even the manner in which interactions are made with customers and suppliers. In order to prepare for organizational innovation, it is almost mandatory for such organizations to conduct a thorough strategic decision making process which involves by setting an agenda. The first stage is recognizing the central issue and accordingly working for manners to resolve it. In this case, I will provide the example of A4e located in the United Kingdom. Due to some ethical reasons, the firm earned a bad corporate reputation and had to suddenly close down several work stations in the United Kingdom and lose all future contracts in Great Britain. This lead to extensive strategic meetings and an agenda was set to propose possible solutions in order to recover losses and again start afresh. The next stage of the organizational innovation process is to analyze whether chosen innovations help in matching the requirements for resolving the identified issue. If the answer to this question is positive then the firm enters into the implementation stage. The next phase is to restructure and redesign the entire organizational system. In the case of A4e, the decision to establish local offices in other nations and implementing the model of skills development was given a go ahead. Hence, the organization established offices in nations like India, Poland and Australia. Meanwhile, offices were shut down in the United Kingdom (except for the corporate office) and Germany. The next stage involves clarifying in which the innovation is formulated by means of constant processes and structures. This involves clarifying the impacted organizational units and the change in responsibilities and accountabilities. In the case of A4e, precise organizational structures were formulated in which the top leader in every branch office had to report to a team of Executive Directors who were also holding major stakes with the organization. Accordingly, an individual from the team of Executive Directors was made accountable for optimal performances from each branch office existing in other nations. The executive directors’ team had to report to the CMD. At the same time, extensive organizational redesigning had taken place especially in Germany and several offices of A4e in the United Kingdom. This involved change in accountabilities and shifting of job location other than doing away with excess staff. The last stage of organizational innovation involves in regularizing and in this stage a significant role is played by constant innovation with certain organizational activities and structures. In this stage, innovation and organization merges and there are constant small innovation activities which takes place as the progress of change management activities is monitored and assessed from time to time.
In this case, prior to implementing organizational innovation it is essential to collect extensive market information. In the case of A4e, extensive information regarding the establishment of branch offices in outside nations and prospects of pursuing education management had to be extensively explored. Along with this, the acquisition of contracts in such nations was also a challenge and extensive knowhow, interactions with experts and individuals from the education management sector had to be established. Often such kind of organizational innovation activities fail mainly because of the inability to garner enough information or conduct an incomplete market study. In this case, there may be certain areas for which information had not been successfully acquired by the firm. In the implementation process, this result in serious hindrances and at extreme cases may lead to closure of management operations. This requires the work of specialized consultants which may be weak due to the lack of an excellently researched and documented strategy (Kohl & Depner, 2010).
Conclusion
In today’s world change management is initiated in almost every organization. However, the issue that most managers of today face is in the implementation process. There are very few successful examples of change management. In order to successfully implement innovation through change management, it is advisable to have a thorough knowledge about the new product, service or market and then enter into it. Entering into a new business arena with limited knowledge can be extremely hazardous because of tremendous competition from the market and the constraint of risk and uncertainty involved in the market. One main factor behind this successful organizational change is attributed to excellent communication which trickles down throughout the organization (Weiner, 2009).
At the same time it is essential for organizations to exploit present abilities and simultaneously explore new competencies. Such organizations need to have a lot of superiority in structures in order to survive severe market competition. Academic study on successful organizational change has revealed that organizations which attain success in the long run following change management strategy have sound systems, structures and processes which help them to strike a balance between contradictory requirements.
Reference
Cameron, E. & Green, M. (2012). Making sense of change management: a complete guide to the modern tools, and techniques of organizational change. United Kingdom: Kogan Page Limited.
Kohl, H. & Depner, H. (2010). The implementation of an organizational innovation: examples of mass customizing firms of the capital goods industry. International Journal of Industrial Engineering and Management, 1(3), 85 – 95.
Milliken, A. (2012). The importance of change management in supply chain. Journal of Business Forecasting, 4 – 9.
Seddon, P.B., Calvert, C. & Yang, S. 2010. A multi-project of key factors affecting organizational benefits from enterprise systems. MIS Quarterly, 34(2), 305 – 328.
Sminia, H. & Nistelrooij, A.V. 2006. Strategic management and organizational development: planned change in a public sector organization. Journal of Change Management, 6(1), 99 – 113.
Weiner, B.J. (2009). A theory of organizational readiness for change. Implementation Science, 4(67).
