Management of Change
The management of change is an issue that is destined to be with us for many years to come, while people adjust to a world of work that is likely to be more fragmented than previous generations had come to expect. In the middle of the last century it would be fair to say that most people expected to choose a trade, profession or occupation and, if they wanted to, stay in it until retirement. But now people increasingly need to improve their skills and change their work styles according to the changes in the organisations. The nature of changes in the organisations can be as differing as bringing smaller and simpler changes to a small work setting to making huge transformations to the entire organisation.
It is imperative that whenever any sort of change, however complex, is being brought about in an organisation, it should be properly managed. In a business environment that changes radically and rapidly, an organisation’s ability to change is a critical success factor. No organisation can sit on its laurels. The days of secure business niches insulated by government protection, geographic location, proprietary technology, or weak competition are all but gone. Today, corporations must adept as never before in order to survive.
Compounding the challenges posed by today’s competitive business environment is the growing complexity of organisations themselves. Fewer and fewer corporations are designed around neatly defined functions. Instead, cross-functional matrices and a web of joint venture and alliance operations characterize many organisation charts. Many of these new forms have a global character. Not only do companies like Ford, General Electric, and Sony span the globe, but increasing numbers of middle- and small-sized organizations have operations in distant corners of the world as well.
Due to their extensively large presence around the globe as well as because of rapidly changing technologies, the organisations confront the need for change as well as development rather more frequently now. In order to bring a change successfully in an organisation, that change needs to be managed. There is a need for a balanced approach in terms of the structural, cultural and political aspects of a change initiative in an organisation taking into consideration the complexities of the internal and external environments. And this is the area of discussion for this essay.
Body of Essay
Organisation transformation generally occurs in response to or in anticipation of major changes in the organisation’s environment or technology. These changes often demand significant alterations in the firm’s business strategy, alterations that in turn require modifying corporate culture as well as internal structures and processes to support the new direction. “Such elementary change involves a new idea for organising and managing organisations. It involves qualitatively different ways of perceiving, thinking, and behaving in organisations. The change process is characterised by innovation and learning and continues almost indefinitely as organisational members discover new ways of improving the organisation and adapting it to changing conditions”. (Cummings and Worley, 2001)
The past decades have witnessed a growing number of organisations radically altering how they operate and relate to their environment. Increased foreign competition has forced many smokestack industries to downsize and to become leaner, more efficient, and flexible. Deregulation has pushed financial institutions and airlines to rethink business strategies and to reshape how they operate. Rapid changes in technologies have rendered many organisational practices obsolete, pushing firms to be continually innovative and nimble.
These organisation changes have been characterised by a number of terms including “double-loop learning” (Argyris & Schon, 1978), “frame-breaking change” (Nadler & Tushman, 1986), “reorientation” (Nadler & Tushman, 1986), “culture change”( Kilmann, et al., 1985), “strategic change” (Tichy, 1983), “quantum change” (Miller & Friesen, 1984), and “transformation” (Kilmann & Covin, 1988). These terms imply fundamental changes in organisational strategies and structures, and “in how members perceive, think, and behave at work. These changes go far beyond making the existing organization better or fine-tuning the status quo. They are concerned with fundamentally altering the organizational assumptions about how the organization functions and how it relates to the environment. Changing these assumptions entails significant shifts in the organization’s philosophy and values and in the numerous structures and organizational arrangements that shape members’ behaviour.” (Cummings and Worley, 2001) Not only is the magnitude of change greater, but also the change fundamentally alters the qualitative nature of the organisation.
A growing number of managers have come to appreciate the power of corporate culture in shaping employee beliefs and actions. They have come to realise that a strong corporate culture closely linked to an effective business strategy can mean the difference between success and failure in today’s business environment. Cultural change is very difficult to effect in organizations, particularly in mature organizations. An existing strong culture can often resist a weak change effort. To be successful, the plans for change must be firmly focused on developing a culture that is aligned with the firm’s intended strategy.
Trying to implement a cultural change that is counter to the strategy is almost certain to fail. It is the high-level leader’s responsibility, once strategy is chosen, to bring the corporate culture into close alignment with strategy and keep it there. Any attempt to introduce management practices or organisational behaviour changes that are radically different from the existing culture will almost certainly fail if these changes are incompatible with the existing culture. The culture, that sum of values, beliefs, and assumptions that is the core of any organization, must support the new initiatives if these behavioural changes are to take hold. Without a change in the culture of the company, no new set of skills or work processes will bring about the kind of reform that is needed.
Diagnosing corporate culture requires uncovering and understanding people’s basic assumptions, values, norms, and artefacts about organisational life. As stated by Champy (1995), “Don’t expect people to change how they behave unless you change what they do; that is, their work must be designed to allow them to act differently” (Champy, 1995). Therefore whatever may be the nature of the intended change initiative, it cannot be brought about effectively unless the norms and beliefs of people involved are made to suit and match that change initiative.
Strategic change generally occurs when organisations shift strategic direction to better meet changing environmental demands. The new strategy usually requires significant alterations in the firm’s design features to channel behaviours in the desired direction. Organisations need to manage these changes in a balanced manner so that the desired results are achieved. For those who see changing systems effectively as the key to managing change, the rationale behind strategy is to define clearly the required state and then plan the change from state A (the existing situation) to state B (the new situation). The transition state is sometimes referred to as state C. Many commentators feel that this middle stage is not particularly well thought through, which may account for its being the least successful. (Tushman,1977; Salancik and Pfeffer, 1977)
Nadler (1993) offers the critical factors underlying change programmes, which are not always addressed in the way he suggests they ought to be in order to gain the commitment of those caught up in them. For Nadler, the resistance to change is triggered by loss of security and a reduction in the worker’s sense of autonomy and self-control. Familiarity with working procedures brings with it competence and repetition, allowing roles and functions to be exercised with a minimum of concentration. Mastery of functional complexity is dependent on the individual internalising working systems that are then reinforced over a long-term period of acceptance and commitment to performance.
Another problem that Nadler identified was power. Changes are rarely neutral. They affect the position of expertise, perhaps, that jobholders are used to exercising. Technological change often makes things easier, ostensibly, but can also destroy the mystique of previously well-preserved knowledge held in a few significant hands. Deskilling may mean ease of operation to some, but can mean loss of status for those in whose hands a skill or craft was held. Not surprisingly, resistance could be expected from such highly skilled groups.
Nadler and the practitioners of Organisation Development suggest that careful management can overcome the occasional disturbance of an otherwise steady-state working life. Normal service can be resumed as soon as possible, if managers are thoughtful, supportive and planned in their approach. However, there is a need to distinguish the temporary resistance envisaged by Nadler to the more radical resistance, which informs the beliefs of radical structuralists. Accepting as a basic assumption that all employer-employee relationships are basically exploitative, no amount of planned intervention will alleviate the belief that the enforced change to working conditions is inherently alienating in that it deprives workers of pride in achievement and ownership of their craft or skill.
Balanced and Aligned Approach to Change Management
Tichy (1983) suggests that some managers and consultants tend to limit their approaches to strategic change, typically using one perspective to the exclusion of others. Some view change primarily as a technical problem and focus on production and control systems. Others see it mainly as a political problem and attend largely to replacing people or restructuring the organisation. Still others view change as a cultural problem and concentrate upon communication patterns and interpersonal relationships. Attention to one kind of problem at the expense of the others can disrupt organisational functioning. For example, if banks view the information revolution mainly in terms of technology, they are likely to experience political and social difficulties, such as employee and customer resistance, when new technologies like automated tellers are introduced.
Tichy subtitles his approach T, P, C Theory, suggesting the need to account for all three perspectives: technical, political and cultural. These three views are integrated in terms of environmental forces affecting organisational systems. It suggests that organisations face economic, political, and cultural forces in their task environment.
The technical, political, and cultural systems are interrelated and form a larger organisational system. Strategic change management involves keeping the three systems balanced or aligned in the face of environmental pressures. This means that the systems must support each other rather than work at counter purposes. For example, if environmental forces push banks to offer a wider range of financial services, the organisational structures might change from functional departments to product groups organised around the different services. This would require corresponding changes in the political systems, such as budgets or promotions, and cultural systems, such as values or goals, to support the product structure. Otherwise, the three systems would become misaligned, and banks would have severe difficulties implementing and taking advantage of the new structure. In short, changes in one of the systems require corresponding modifications in the others if alignment is to be maintained.
An effective organisation processes is a reasonable fit or congruence among the different parts. Tichy suggests the following three steps to change an organisation from its present condition to the some desired future state.
Develop an image of the desired organisation with its loosely coupled technical, political, and cultural systems aligned. Change must start with some vision of a desired organisational state. This image must include a view of each of the three systems, as well as of what the organisation will look like when they are aligned.
Uncouple the three systems, and intervene separately in each one. Because the technical, political and cultural systems tend to reinforce one another, it may be necessary to unhook the system from each other before any meaningful change can occur. For instance, in many of the work design interventions, the technical system is unhooked from the political and cultural systems for purposes of change. Organisations allow employees and managers to experiment with new work designs without the full pressures to produce, and often without having to worry about existing company rules, job classifications, and measurement and reward systems. This frees the technical system from the normal constraints imposed by the other systems, thus allowing room for change.
Plan for recoupling the three systems. Once appropriate interventions have occurred in one or more of the three systems separately, it is necessary to plan how they will be recoupled with one another. This reconnecting plan outlines the process by which the three systems achieve the aligned, desired state outlined in step 1. For the work design interventions just mentioned, careful attention is given to how the technical system changes will fit in with the political and cultural features of the organisation. This may include certain modifications in these latter systems to support the new work designs, such as rewarding managers who innovate in work design and promoting values of learning through experimentation.
This essay presented the ways and approaches of a balanced nature for helping organisations to transform themselves in order to support new strategic directions. These large-scale change efforts typically occur in response to or in anticipation of significant environmental or technological changes. External changes often demand fundamental shifts in corporate strategy, which in turn require altering corporate culture as well as internal structures and processes.
The corporate culture affects whether firms can implement new strategies ad whether they can operate at high levels of excellence. Changing corporate culture can be extremely difficult and requires clear strategic vision, top-management commitment, symbolic leadership, supporting organisational changes, selection and socialisation of newcomers and termination of deviants, and sensitivity to legal and ethical issues.
The strategic change involves aligning the organisation’s design features with one another and with the corporate strategy. These alignments lead to organisation effectiveness and involve integrative changes in the firm’s technical, political and cultural systems. An effective organisation processes a reasonable fit or congruence among the different parts, and a logically drawn change process ensures effectively managed change bringing desired results.
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