Executive Summary
It is quite clear that an effective organizational change is of great significance in regard to the success of any business organization. In most cases, it is very essential to enable business organizations to attain success and remain in business in the current economic situations which are quite demanding and unpredictable. But on the other hand, the existing organizational change models and their practical applications which are at the disposal of the business managers are, in most cases, not clear and confusing and they lack evidence as well. At all times, support is offered to these theories by the hypotheses that have not been proven; which have not been tested to confirm how valid they are. This report mainly aims at conducting a specific comprehensive review of some of the major theory applications of organizational change.
The report seeks to carry out a critical review of the literature that has been presented by other researchers on the subject of organizational change and the way it can impact on the productivity of a firm. The specific work that has been reviewed in this report is that which was presented by Lindsay Nelson. Lindsay’s work exemplifies the argument through a case history of PowerCo, an Australian power company, and points out the issues and problems which had an impact on the company’s change program. The report as well presents a “post event” change evaluation. This report would as well illustrate valid understanding of the organizational change impact on a particular company and presents recommendations on the way increased efficiency can be attained by organizations.
Table of Contents
Executive summary
1.0 Introduction
1.1 Background of the Organisation under review
2.0 The case study
2.1 Leadership
2.2 Research methods
2.3 Issues limiting Organizational change at Powerco
3.0 Discussion
3.1 Static change model
3.2 Dynamic change model
4.0 Conclusions and Recommendations
References
1.0 Introduction
The term “change” can be defined as an effort made consciously to ensure application of definite physical alterations on the way stuffs are being carried out and applying a different emotional consciousness as well. Achieving change can at times be very difficult and painful to realize in the workplace since it involves a move towards the unknown from the known. In most case, every time there is application of major changes in an organization, the employees lose their efficiency, competency, security, familiarity as well as their comfort which they were formerly having before the change. This comes about for the reason that the employees have set up competencies and friendship from the environment they are sued to over a long time period.
In the real life situation, however, a belief is always held that change is a step forward and essentially, there is need to ensure that organizations take steps forward. But this is not the case at all times and sometimes even the likelihood of deriving huge gains and acquiring much from the changes that are carried out would not make all the participants to be willing to effect the change. Sometimes, the workers would not actively participate in the change process just for the reason that they hold a belief that they would not derive any benefit from the change. It has been clearly established that a large number of workers would work in opposition to any change that is introduced at their place of work. The generally held belief is that any kind of change would come from the top management and brought down to the workers and is mostly initiated by the leadership, and therefore, the workers give priority to opposing any change. It now turns out to be very important for the business managers and leaders to make an effort to win over the workers as the first step before making an attempt to apply any changes.
There can be no clear definition of the reason for change. The reason for change is quite dynamic, sporadic, sometimes unplanned, and comes out from situations where there exist crisis within an organization; it can either be a crisis in relation to leadership or that which relates to poor performance of the business organization in the market (Nelson, 1998). However, dealing with change in a better way is believed to be quite essential to the survival and viability of an organization in the current economic situation which is very unpredictable and quite dynamic.
Harris (2002) offers a very distinctive and appealing definition of the factors which have a tendency to interfere with the organizational change application. This author divides these factors in to four categories. The first category is what he refers to as “Lip Service”. This refers to a way to disrupt the change process by failing to acknowledge the leaders’ and managers’ authority. In such a case, the workers agree to changes by words but in the actual sense, they are neither willing to implement the recommendations nor to have change of attitudes. These workers deliberately disregard the change process provisions. In such a situation, for the leader or manager to carry along the whole workforce, he or she needs to have effective leadership skills. The next is “Pronged Argument” and this involves disrupting the change process by using heated and prolonged debates and arguments at whatever small chance to do away with support and the enthusiasm for change as well as to frustrate the leadership in the process of change application. The third one is “Hijacking” and this involves disrupting the process of change where the workers make use of different tactics to alter the main aims and objectives of the change process. In this case, the workers do contrary to what is required; they carry out a different activity from what is agreed in the strategy of the change process. The application of these tactics is aimed at giving out false results and frustrating the managers. The fourth one is Scarcity Creation and this involves interfering with the change process by undermining and this includes the deliberate conduct of a more offensive form.
1.2 Background of the Organisation under Review
The business organization that has been reviewed in this report is PowerCo, an Australian electricity company. Between the years 1991 and 1998, this company was a subject of organizational change of a very wide range. The company was set up in the year 1914 with an objective of generating, transmitting and selling electricity. The electricity was generated from the hydro-power sources and later in time, turned out to be known across the globe as an excellent source of civil engineering research and expertise. Moreover, as time went by, the civil engineers in this company began exercising much more control over the electrical engineers. There was relegation of the electrical engineers to the background. This came about for the reason that the big engineering projects and the problems that were dealt with by the company were projects and problems which were in field of civil engineering. These included such projects as dam construction, river and stream diversion, and canal building among others.
In order to turn out to be a leader in electricity generation, transmission and sale, the company began to portray particular characteristics which would affect the company in a negative manner. The high level of research and expertise in the field of civil engineering in the company caused the company not to seriously consider other power generation areas. This was quite damaging to the company since the other ways of generating power were progressively more “cost effective” and caused the company not to be in a position to gain a competitive advantage in the market place. The stalemate that resulted from the amount of money that the company owed which was meant for dam construction and the demonstrations that were carried out by people in regard to the environmental concerns transformed this company’s strengths in to a liability.
2.0 The Case Study
The workers in PowerCo were not aware of the company’s past reputation and the spiteful controversies in which the company has been involved. The major issues facing the company were its dealing with their immediate surroundings and the big sums of money which it owed. As a consequence of not having knowledge about the issues that the company faced, a large number of the employees were opposed to change for the reason that they could not comprehend the reason for change and they had preference to hold on to the old days and they held hopes that there would be fresh contacts for the new dams to be constructed just as it had always been the case. No clear explanation was made to employees in regard to the need to have wide ranging changes and this was not done because the management had intentions of hiding such information from the workers but it was simply because the management considered historical background as not being relevant and thus, did not see it as being a significant factor in the process of change.
2.1 Leadership
The company’ management was constantly criticized for it not having co-ordination in the leadership of the change process as well as the commercialization process. The two processes were vested in the hands of the project teams. In the midst of change crisis, the company’s chief executive officer resigned from his position and this brought about an unstable leadership era. The chief executive officers who came thereafter were also accused of projecting a notion of the absence of direction and lack of the ability to offer leadership among the employees. The duty of offering sure and strong leadership was complicated since the issues concerning privatization and disaggregation remained unresolved up to towards the end of the year 1998. Basing on the fact that the future of the PowerCo Company has not been resolved and does not have a direction and effective crisis management on the part of the company’s management, the employees started to have less confidence in the leadership as well as in the commercialization drive direction. Any change season usually causes coming in of a time of lack of certainty and the hard change parts were worsened by lack of stability in leadership which was perceived.
2.2 Research Methods
Presenting criticisms towards Pettigrew’s (1985) paper, which is linked to organizational change studies, was utilized as a starting point. This report focused on the change dynamics in the environment which is changing on a continuous basis. The static models emphasis the content of change, in which there is domination of contingency approaches for change implementation. According to Greenwood and Hinings (1988), there is need to have more studies conducted in regard to understanding how application is carried out in a business organization. This view is further explained by Dawson (1994; 1996) by elaborating on the significance of getting o understand the change process. With content therefore, an appropriate evaluation of he change process is quite vital to understand organizational change.
This case study was selected because of its capability to take in what is referred to as Pettigrew (1995) a “complete and right manner of change”. Therefore a case study is a practical analysis which: carries out an investigation of a current phenomenon within its real-life context and particularly when the border lines between context and phenomenon are not clearly seen (Yin, 1994).
2.3 Issues Limiting Organizational Change at PowerCo
The process of organizational change in other companies entails engaging in company restructuring and handling redundancies. But in PowerCo’s situation, the two issues were handled independently. After the dam construction contracts were halted, there was deep cutting of the labor force and a large number of the employees were forced to quit due to the company’s unfavorable fortunes but on the other hand, some of the employees left the company in a willing manner. The company did not succeed in distinguishing between workers basing on their performance or which workers the company actually needed, under the volunteer redundancy program (McDermott 1988).
The effort which was employed by the human resources department was directed towards realizing immense and ongoing decrease in numbers without interfering with works conducted by the company, but at the expense of serving an inconsequential function in the other changes. Recurrent restructuring only led to attaining confusion and irritation among a large number of employees and this contributed to several employees making a decision to quit. The restructuring that were made might be seen as an effort to carry out more adjustment to what was referred to as “new PowerCo”, however, this was not the case. In the actual sense, this was a reflection of an effort to draw back from the original commercialization structure which was interpreted as a “de facto, but premature disaggregation” (Senge, 1990).
3.0 Discussion
3.1 Static Change Model
The PowerCo case exhibits a typical case of a static change model planning and implementation. The company’s management set up the change plans and in turn selected project teams and the change process was allowed to proceed, to continue having dependence on the ongoing activities within the company. Basing on theory, the factor that seemed to be left out was the fact that; while organizations set out to experience a changing business environment, they are supposed to take care of change programs and straighten them and this is basically for two main reasons. The first reason is that the external factors are dynamic as there is implementation of different changes. The second reason is that internal restructuring affects the way the achievement of the change being implemented is realized within the firm. In essence, by the time a firm has accomplished a single stage of its program, the conditions and context would as well have moved on to a level that possibly, the initial plan which might have been set up in good faith, may no longer be entirely suitable (Dawson, 1996).
Among the limiting factors is the idea of the political aspects which need to be under observation and control (Greenwood and Hinings, 1996). In most cases, in the course of time of confusion and leadership crisis brought about by resigning of the key employees, there are those employees who tend to take quick steps to climb the corporate ladder and this was what took place at PowerCo. The managers in the company faced a dilemma in regard to trying to distinguish between who was genuine in welcoming the change and had a willingness to work towards its achievement, and those that were just looking for a way to be promoted. This is in line with the ideas presented by Luthan (1988) of successful managers in contrast to effective managers. Ironically, as it occurred, the employees who had strong support for the change stepped down and quit due to the promotion of the people who were more conservative managers. This is an indication that a larger number of leadership officers and managers only took interest in little change (Daft, 1989).
3.2 Dynamic Change Models
An argument is presented by Leifer (1989) that change is not supposed to be viewed as a straight forward undertaking similar to moving from one point to the other point. In the presence of the need to having recognition of how volatile the business environment is, the application of the static change model to the current business organizations turns out to be quite ineffective. A firm having the static change model appears to be working in a circuit system that is closed. They turn out to be cut off from the current happenings and this would negatively impact on the change which is supposed to be applied. Under the static change model, a change in no way can be seen as a sequence of events that take place in a simultaneous manner but relying on each other. However, each and every individual change has an effect on the entire system. It is important to point out that the organizational change is not the exclusive duty of managers or leadership to implement in responding to a new business environment (Eden, 1996). The big concern is the way to have imagination of change bringing in adjustments in the business strategies and styles which have to be in place in order to get accustomed to any environment and to ensure that any changes that would come in the future can be attained.
A change in perspective, be it either stewardship or substance, is not supposed to be regarded as an event that is not dependent on other factors because there is a consequential effect on the process which calls for having another evaluation of the policy of organizational change. PowerCo’s lack of success in clear understanding of the impact of this relationship brought about a number of problems in this company. For instance, that a change in structure or substance, when implemented called for having new skills as a result or stewardship, or that a “different government view (context) impacted on substance and stewardship” (Daft, 1989).
4.0 Conclusion and Recommendations
As it has been established, the leadership of any firm is very vital since it offers the plan and direction for the future and can set up an environment that can facilitate achieving success or failure depending on the strategies and leadership styles that are put in place. Ulrich and Lake (1991) point out that organizational change is continuous and it is very important for any organization to keep itself updated about the ever changing business environment. In the course of change, the organization’s leadership sets the process and the pace for people in the organization to follow. The decisions which are made by the leadership as well as the actions taken determine what will be achieved by the employees in the future (Nadler, 1982).
In order for the organizational change in the PowerCo Company to bring in more results, the managers of this company are supposed to carry each and every person in the company along. There are supposed to be unified goals among the workers in the company. The status which is granted to the civil engineers as well as the electric engineers should be in agreement (Lewin, 1951). The company is supposed to make a great effort to provide comprehensive and specific information concerning the changes that are being put in place. The management should also clearly give out reasons for having these changes and these should be communicated to all employees in the company in the most effective way possible. By doing this, the employees would be given enough time for adjusting to the new situations and they would also have a clear direction.
Last but not least, the PowerCo Company leadership ought to have agreed processes of change to be applied. By doing this, any leadership crisis that may come about as a result of key management team members resigning would be prevented. In addition, everyone in the company should get involved in the change process and this should be a dynamic undertaking. Consequently, there would be realization of a constant change culture (Barley et al, 1997).
References
1.
Barley, S.R., Tolbert, P.S. (1997), "Institutionalization and structuration: studying the links between action and institution", Organization Studies, Vol. 18 No.1, pp.93-117.
2.
Brand, M.D. (1996), "Top down metabolic control analysis", Journal of Theoretical Biology, Vol. 182 pp.351-60.
3.
Daft, R.L. (1989), Organization Theory and Design, 3rd ed., West, St Paul, MN, .
4.
Dawson, P. (1996), "Beyond conventional change models: a processual perspective", Asia Pacific Journal of Human Resources, Vol. 34 No.2, pp.57-70.
5.
Eden, C., Huxham, C. (1996), "Action research for the study of organizations", in Clegg, S.R., Hardy, C., Nord, W.R. (Eds),Handbook of Organization Studies, Sage, London, pp.526-42.
6.
Greenwood, R., Hinings, C.R. (1996), "Understanding radical organizational change: bringing together the old and the new institutionalism", Academy of Management Review, Vol. 21 No.4, pp.1022-54.
7.
Leifer, R. (1989), "Understanding organizational transformation using a dissipative structural model", Human Relations, Vol. 42 No.10, pp.899-916.
8.
Lewin, K. (1951), Field Theory in Social Science, Harper & Row, New York, NY, .
9.
Luthans, F. (1988), Real Managers, Ballinger, Cambridge, MA, .
10.
McDermott, B., Sexton, G. (1998), "Sowing the seeds of corporate innovation", Journal for Quality and Participation, Vol. 21 pp.18-23.
11.
Nadler, D.A. (1982), "Implementing organizational changes", in Nadler, D.A., Tushman, M.L., Hatvany, N.G. (Eds),Managing Organizations: Readings and Cases, Boston, Little, Brown, MA, pp.440-59.
12.
Nelson, L.G., Dowling, P.J. (1998), "Electricity industry reform: a case analysis in Australia", Journal of Organizational Change Management, Vol. 11 No.6, pp.481-95.
13.
Pettigrew, A. (1985), The Awakening Giant: Continuity and Change in ICI, Basil Blackwell, Oxford, .
14.
Senge, P.M. (1990), "The leader’s new work: building learning organizations", Sloan Management Review, Vol. 32 No.1, pp.7-23.
15.
Ulrich, D., Lake, D. (1991), "Organizational capability: creating competitive advantage", Academy of Management Executive, Vol. 5 No.1, pp.77-92.
16.
Yin, R.K. (1994), Case Study Research: Design and Methods, 2nd ed., Sage, Thousand Oaks, CA, .
