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Effective Organizational Change Management

Written by Londy Bracale

Colorado Technical University

MGM604-0801A-06: Organizational Behavior

Dr. Jack Huddleston

Phase 3 Individual Project

January 27, 2008

 

Abstract

Businesses of today that do not anticipate and plan for change may not be in business in the future. The business climate in these times requires matrix organizations to adapt to continually changing customer demand and tough competition in a global economy. The companies that focus on planning, being cognizant of economic, global dynamics, and understand how it affects the customer base and the organization as a whole, will be the successors of the future. Those that do not will ultimately fail. Great organizations and start ups alike need to embrace change if they are going to compete long term.

 

Effective Organizational Change Management

The rapid growth that Superior Widget Corporation (SWC) has recently experienced has put pressure on the young organization for change and improvements in efforts to effectively compete both domestically and internationally. This document will focus on how SWC should plan future change and understand lessons previously learned and what improvements could have been made to implement change. Next, we will examine how to create the new organizational structure with minimal negative effects. This document will also discuss the importance of change. SWC works in a matrix organization which groups people by function and product team. This has many positive features but it is not perfect. The major disadvantage of the matrix style is possible frustration, power struggles, and stress. In addition, SWC has rapidly gone through sales growth, new hires, and centralized services. That is a lot of change for a two year old company to manage. If the current rate of change is not managed well, it can appear that the organization is incompetent. Change is just as important as understanding the resistance to change. I will also discuss the resistance to change that can lead to fear, stress, uncertainty, and reduced productivity. This is important to recognize and learn how to plan for it in order to implement a successful change strategy. Leadership is critical for the success of change and provides consistency throughout the organization. I will outline change management models, motivation, and suggest recommendations for SWC (CTU Online, 2008).  

SWC is organized in a matrix structure which simultaneously groups people by skill-set in departments and report to a functional manager. This will minimize duplication of skills, and increases productivity on projects. The objectives for organizational change are numerous and vary for each company; however, change is necessary for survival in the competitive global business economy. Organizational change is nothing new. Change is not just an excuse to fire people or downsize just to save money. People are not machines that can be replaced or disposable commodities. Organizations need people to perform daily functions and tasks to be profitable and grow for the long-term. The result of change depends largely on how it is planned, its goals, and objectives.

The organization as a whole should be involved in the change process as much as possible; to embrace it and become part of what should be interpreted as a good thing. Not getting people involved creates fear, stress, and reduces productivity. SWC experienced this when the customer service department was centralized without notification to the affected departments. Centralization of services makes sense however; the implementation was not well planned and resulted in unnecessary employee grief. So, what is change? Change is the ability to create a competitive advantage in the marketplace. If SWC is going to successfully compete in the global market, it is necessary to quickly adapt to the customers shift in demand, change in competition, technology advancements, economic, political, and global influx, and demographic and social changes (ChangingMinds, 2007).

Managers need to stay on top of environmental forces of change. If SWC becomes slow to respond to competitive, technological, economic, political, global, or demographic changes, it will lose its competitive advantage. Competitive forces are important because SWC needs to outperform the competition and be forward thinking. SWC can accomplish this through innovation, quickly responding to customer demand, satisfying their wants needs and desires, and filling needs that are not being met to satisfaction. SWC needs to concentrate on as many of these areas as possible if they will survive long-term. Another area is efficiency, quality, and the use of technology. SWC needs to minimize operational process issues within the matrix structure. Some of the experiences have been cross-functional problems of order processing, resolving customer complaints in conjunction with the shipping division (George & Jones, 2005).

Competition is always changing. SWC has entered into the global economy and competitors will not just be domestic firms but competitors from abroad. Responding quickly to competitive innovations, and service levels, customized short run products, and an adaptable workforce are all potential threats. SWC must foster cooperative teamwork within various departments and develop preparedness for change. Economic, political, and global forces will continue to affect SWC now and in the future. Options of outsourcing, production, centralizing, and utilizing specialized labor will sustain a competitive advantage. The European Union currently has over twenty members joining forces to create a competitive economy and reduce trade barriers. There are new concerns of doing business in the global economy for SWC. Governmental policies, politics, economic conditions, and demographics are areas we need to understand and be cognizant of. What happens in one country will affect SWC in some way and we should be prepared to address these issues in an ethical manor. SWC is facing different cultures, international law, differences in business practices, economic conditions, and different demographics and markets. The international business environment has established a more competitive marketplace with countries offering low-cost production and innovative technology that we never had to compete with before (George & Jones, 2005; Robbins & Judge, 2007).

Technology has made a huge impact on change in the business world. Understanding how new technologies can improve performance, cut costs, or save time can provide a competitive edge corporations need. Progressive organizations allow for proper training and development, continuing education, and skills for their employees. This has advantages such as job enrichment and will increase job satisfaction. People are the most important asset SWC has and there needs to be a scorecard on their job satisfaction especially when the organization changes. Job satisfaction is an emotional response to someone’s work and their role as they see it in the company. There is a slight relationship between high job satisfaction and job performance. SWC needs an organizational change management plan that will incorporate job enrichment and satisfaction. Using surveys is one way to asses the overall job satisfaction for SWC employees. This can be performed privately via the corporate intranet. It is important that confidentiality is attained so the feedback is honest and the employees do not feel threatened when they provide their answers. The survey should have combined direct and open ended questions with a space to type answers. Consider how the results of the survey will be communicated back to the employees. There should be a plan to address areas of dissatisfaction and specific action for good news (CTU Online, 2008).

Effective change management should minimize the resistance to change. Professional change agents have devised seven tactics to overcome the resistance to change. It is amazing to see how many times communication is listed on studies as one of the solutions to a problem. Take heed to this advice, communication and education are the first logical step to reduce the resistance to change. SWC does not want to misinform or have hearsay run amuck and create turbulence in the organization. Communicating with people will ease the tension and help them understand what is trying to be accomplished. Invite active participation to the organization. If people take part of the change process, there is more buy-in and increased commitment. Offer support services for those that need it. When fear, uncertainty, and anxiety runs high, employee counseling, new job skill training, or other adjustments can help put people at ease. Another method to reduce resistance is to use negotiation techniques and offers something in exchange to decrease their resistance. Cooptation will seek to bring in leaders of a resistant group to take an active part in the change process. Managers can also identify people that are accepting of change. Research has shown the ability to adapt to change is linked to personality. Those that adjust easily to change are open to experience, take on risk, and flexible in their behavior. Lastly, coercion is a tactic that can be used in the form of direct threats or pressure on those in resistance (Robbins & Judge, 2007).

I would recommend an intervention strategy that can help plan this process with key stakeholders of the organization. This will document the need for change so the leadership of the organization will agree and support the efforts. The change management will include job reassignment, job redesign, employee satisfaction, and result in a positive position. There are many approaches to managing organizational change. It is not reasonable to outline them all in this one document. However, I can discuss two that apply to SWC’s situation. Kurt Lewin has developed a three step model for successful change that includes concepts of unfreezing, movement, and refreezing. In his approach, he suggests unfreezing the status quo or the equilibrium state of the organization. Moving away from the status quo will mean overcoming the resistance to change. For an organizational change to be effective, it needs to happen quickly. To overcome resistance Lewin suggests increase the driving forces that direct current behavior away from the status quo, decrease forces that hinder movement from the equilibrium state or combine the two methods.

John Kotter has developed an eight step plan to implement change. Kotter is from the Harvard Business School and began this method with common failures to most organization changes. His eight step plan begins with 1) creating urgency and strong reasons why change is needed, 2) establish a group to lead change, 3) develop a vision for the change and a clear strategy, 4) clearly communicate the vision of change to the entire organization, 5) get people involved and empower them to take risks and solve problems, 6) reward short-term successes along the way, 7) examine changes, adjust where needed and consolidate improvements, 8) demonstrate how new behaviors relate to the successful organizational change. However, the best way to begin a change is with you. Top management must take the leadership role in the organization and make a commitment to change because commitment will flow from the top down. Change is not an easy painless process. It takes a plan, effort, commitment, ability to lead, and an investment of time and money (Nickols, 2006).

In previous discussions, I outlined theories of motivation that I believe should be considered in the change model for SWC. As you may recall, Maslow’s hierarchy of needs starts with physiological or basic needs, safety, esteem, and finally self-actualization. These are key elements that play in the lives of SWC’s employees. When the organization is bringing people through potentially high stress situations, we should consider Maslow’s theory. Utilizing Kotters eight step plan in conjunction with Maslow’s hierarchy of needs will create an effective template for SWC’s change model.

No plan is worth its weight if there are no goals and objectives attached to it. In addition, goal setting has become a motivational tool. The proper use of goals will make the difference between reality and a pipe dream. Goals need to be specific, measurable, attainable, realistic, and timely. The more specifically stated the goal, the more likely it is to achieve. Use drill down technique to narrow the goal down. Do not generalize. Ask, what do I want to accomplish? What date will this be complete? Decide how the goal can be measured. It is important to plan the steps to reach the goal and make it attainable and realistic. One of the most important elements is to identify a deadline for accomplishment. I personally have added the last element to successful goal setting and that is the celebration. I think it is extremely important to recognize accomplishments and enjoy the moment before moving on to the next task.

This document outlined the current situation and issues of past organizational change for SWC; introduce organizational theories, models, and recommendations for successful change in the future. Change is going to happen the question is will the organization plan, organize, manage, and control a change process or will external forces dictate the organization’s change that will likely have negative implications? This is the choice to make. Either orchestrate the change or be negatively controlled by it. Successful organizations like General Electric have embraced change as part of their culture. This is one company I recommend to study and mirror for SWC now and in the future. Managed change brings long-term success and if the recommendations of this document are followed that is what I see for SWC.

 

References:

ChangingMinds, (2007). The change imperative. Retrieved January 28, 2008, from Changingminds.org Web site: http://changingminds.org/disciplines/change_management/change_imperative.htm

CTU Online. (Ed.). (ca. 2007). Course Materials: MGM604-0801A-06: Organizational Behavior. [Printable version]. Colorado Springs, CO: CTU Online. Retrieved January 28, 2008, from CTU Online, Virtual Campus, MGM604-0801A-06: Organizational Behavior website: https://campus.ctuonline.edu/classroom/MultimediaCourseMaterials.aspx?Class=204548&tid=44

George, J, & Jones, G (2005). Understanding and managing organizational behavior, fourth edition. Upper Saddle River, New Jersey: Pearson Prentice Hall.

Nickols, F. (2006). Change management 101: A primer. Retrieved January 27, 2007, from Distance consulting Web site: http://home.att.net/~nickols/change.htm

Robbins, S.P. & Judge, T.A. (2007). Organizational Behavior. (12th edition) Upper Saddle River, NJ: Pearson/Prentice Hall.

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