Complex Organizational Structure and Change Management

Introduction

Constantly in the business world we hear that the situation is dynamic. We should always be prepared for anything. This means that the real thing to focus on is the change in the developed culture of the organization. The culture should be developed in such ways that it should welcome change, rather that become a force against it. The key to remember is that change is always good, especially in this particular case (Scott, C. and Jaffe, D., 2004).

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Leading change

For a change to become a reality, someone has to take the initiative of starting the change process. This is done in the following manner:

Establish a sense of urgency

The manager taking the initiative should lead the way with the attitude and determination which displays how urgently the change is needed for the organization and how much the organization can suffer if it doesn’t follow his ideas for the change.

Form a powerful guiding coalition

The next thing to do is to gather some followers. These will be employees who share your ideas on the change.

Create a vision

For any follower to be convinced that he isn’t just following someone pointlessly, he should be given a vision to look forward to. He should know improvements in his life after the implementation of the change.

Communicate the vision

Successful communication of this vision is vital. The manager should promise exactly what the change can bring about. If the change turns out to be much less than expected, it can backfire, causing more damage than there was without it.

Empower others to act on the vision

Nothing can be accomplished without help. Therefore, the manager should appoint some specific tasks to dedicated team members to make the change process faster.

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Plan and create short term wins

Accomplishing short term wins will help motivate the team members that they are succeeding in their tasks and their vision will start becoming a reality which will make them work even harder for the change process.

Consolidate improvements and bring more change

Seeing all the short term wins in the big picture will show everyone how much better things are after the partial change process than was before. This will bring about a faster change ratio in more of the employees.

Institutionalize new approach

Finally, it is time to make the change official and regulate it as rules in the organization.

Managing change

Every new change needs to be managed. This is an obvious statement as anything new isn’t perfect. It has rough edges which need to be scraped and filed till the whole process becomes smooth. This is where managing the change comes in. The process for doing this is that tell employees about the change and the changes in the change one at a time. Trying to keep everyone updated at the same time is neither possible, nor is it a practical approach. This is because they have been through so many reforms that they do not see your change as any more suitable than the last manager’s. They have become skeptical that the change can actually bring them any good.

The way forwards from here is to empower employees. Once you can see how they have taken up the change and how they are practically implementing the change then only you can figure out the rough edges which need attention. You can now guide them on how to do things the right way. It doesn’t mean that if some employees are finding it hard to come to terms with the change (usually older employees) that you should force them to change (Jick, T., 1993). Forcing will not help at all. They can take a break and whine about the new change but only for a short period of time. They have to get to grips with reality and motivate themselves to bring themselves up to date with the change if they want to be part of the action in the company. This is because in any following project or product strategy making, the team as a whole will be responsible, not only the leaders. This is due to the fact that leaders can only lead people who want to be led.

This is where the TMT (transition management team) comes in. they are the psychologists of the change process implementation. In a nutshell, they will figure out why some employee is having difficulty in managing the change and assist him to adopt the change.

Change without pain

It is a fact that change has always been difficult to adopt for employees. This is why the concept of changing with as little disruption as possible was given forward by Mr. Eric Abrahamson. He has created a process called dynamic stability which basically delivers the same punch as a traditional change does, but is much less fatal to the organization. He says that organization should implement big and small changes at intervals and should monitor the changes this is bringing about in the employees. What this means is, that rather than bringing about one big change all at once, small portions of the change should be implemented and the rough edges should be taken care of before the next portion of the change is implemented. This would mean less of a difference of change for the employees, and consequently a much more stable approach towards change.

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Do you have a well Designed Organization?

A well designed organization basically is a relationship between seven variables in the organization. These variables are the corner stone’s of any organization and without them an organization would quite literally crumble apart. They are as follows:

  1. Strategy
  2. Systems
  3. Structure
  4. Skills
  5. Staff
  6. Style
  7. Subordinate goals

The first six should not only be completely integrated with each other, but must also share everything between them with the seventh (subordinate goals). This is because the primary objective of an organizations management is to reach the targets (goals) set by them for the time period (Huczynski & Buchanan, 2007).

Designing high performance jobs

The idea behind designing high performance jobs is to manage resources to responsibilities. Who is best able to fulfill which responsibility?

This can be done by taking into account 4 things:

  • Control
  • Accountability
  • Influence
  • Support

When these 4 points are mixed together to create a job which fulfill the requirements on matching resources with responsibilities, then you have a job specification which will not only be more productive, but also get rid of having to hire two employees in place of one. Therefore it will help in cost minimization and profit maximization if the person you have chosen is right for the job and fits right in the mix of resources and responsibilities.

Balanced Scorecard

Balanced scorecard (source: Balanced Scorecard Institute (2008)
Figure 1. Balanced scorecard (source: Balanced Scorecard Institute (2008)

Originated by Drs. Robert Kaplan (Harvard Business School) and David Norton, a balanced scorecard is basically a strategic management system which brings in line the organization’s vision and goals with what is actually going on in the organization in terms of its strategies. It can be considered like this:

A person sees his report card and accordingly makes changes to his study schedule to bring his actual results in line with what he plans on achieving.

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Financial Ratios for Company Assessment

A financial ratio is a ratio of two specific numerical values from the company’s financial analysis statements. It is basically used to analyze the company’s financial position with regard to different prospectives. There can be any combination of numerical values to be considered for the ratio so the specific number is not known, but the basic suggest that there five major ratios which judge a company’s financial position without things getting too complicated. These are:

  • Liquidity ratios: as the term suggests, it analyzes how much cash the organization has.
  • Activity ratios: it measures how well the organization manages its inventory.
  • Debt ratios: they measure the organization’s ability to pay loans (short term and long term).
  • Profitability ratios: it measures the rate of return on the investment of the organization.
  • Market ratios: they measure the shares of the company and how its stock is holding up in the current stock market conditions.

Conclusion

We have seen many ways in this assignment on how to bring about a change in different manners. But there are more things to it than only introducing a change. We have seen that if the change is not managed properly then it can lead to destruction of a company and hence the metaphor “change is always good” will fall down to the ground with the organization. In the end there was also a discussion on how an organization should interact between its 7 “pillars” which hold it up and how bad it would be for the organization if these pillars do not coordinate properly. This would mean that the jobs given to employees should be well designed and follow the approach of matching what an employee can do and how well he can do it.

Bibliography

  1. Balanced Scorecard Institute (2008) Balanced Scorecard Basics.
  2. Huczynski, A. and Buchanan, D. (2007) Organizational Behaviour. Pearson Education
  3. Jick, T. (1993) Managing Change. IRWIN
  4. Kotter, J. (1996) Leading Change. Harvard Business Press
  5. Scott, C. and Jaffe, D. (2004) Managing Change at Work. Thomson Crisp Learning
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