The Change Process in Business

Introduction

The purpose of this paper is to discuss the importance of change in a modern organization, the major forces of change and positive and negative outcomes arising when change is being implemented. Also, the paper analyzes resistance to change that may occur at organizational and individual levels. The theoretical approach, applied to the paper, helps to visualize the importance of change in organization and the singles out possible ways to reduce resistance to change. At the same time, the essay emphasizes the crucial role of managerial behavior in the change process and managers’ responsibilities in delivering and identifying issues in the change management process.

Change and Business Environment

In order to survive in a highly competitive world, organizations have to improve their flexibility and be ready to meet change from external environments. He says that changes in organization are often facilitated by such factors as uncertain economic conditions, globalization and fierce competition, the level of government intervention, political interests, scarcity of natural resources, and rapid developments in technology. As well as increasing demand for high-quality goods, services and customer’s satisfaction, flexibility in organizational structure determines the changing nature of the workforce and conflict within the organization. Therefore, in today’s fast changing business environment, change turns out to be an unavoidable part of social and organizational life. Hence, organizational change can appear in different shapes, sizes and forms; it can be reflected in various change programs such as total quality management, business process re-engineering, performance management, lean production are being enforced in organizations all over the world (Burnes 2004). Moreover, each organization has to find its own approach on how to implement change, reduce resistance and achieve higher productivity. As restructuring process in an organization can bring to a variety of issues related to resistance to change and culture breakup or, the opposite, to a high standard performance, it is important to have a detailed management plan, create an appropriate organizational environment to deliver change, follow carefully the steps of change models and focus on human resources (Balogun and Hailey 2004).

Discussion Section

Change Process

Arguably, there are two different types of change: strategic and operational. Strategic change occurs when the organization aims to achieve its strategic goals and maintain competitive advantage. In other words, some changes can be made in culture, structure or system, as well as, in manufacturing process, finance or in human resource management. Operational change is characterized by introducing new systems, procedures, structures, or technology and usually has immediate effect on working arrangements and impact on people (Burnes 2004). Both types of change can be opposed by individuals and by organization itself, which may cause a failure. The reasons for individual and organizational resistance to change vary. Individual resistance may occur from economic and symbolic fears, inconvenience and uncertainty, habit, inconvenience or loss of freedom. Whereas Thornhill et al (2000) gives reasons of organizational resistance emphasizing such weak areas as culture, maintaining stability and predictability, investment in resources (as extra expenditures), past contracts and arrangements (with government, trade unions, other companies or customers) , threats to the power and influence of certain groups within the organization (Hughes 2006).

Therefore, in order to reduce resistance to change, low stability and high levels of stress among employees, change within the organization needs to be well planned. This is a three-step model including (1) unfreezing, (2) changing and (3) refreezing. Unfreezing of the existing state is considered the most important stage, when the organization understands the need for change and improvement, whereas, Field Force Analysis enables to distinguish the restraining and driving forces of change. Changing or ‘transition process’ involves the implementation of change and moving towards the new state. In this case, communication and employees support – (training and coaching) are crucial. Refreezing stage involves establishing stability through supporting policies, structure and norms and integrating new values. However, it is disputed that the refreezing stage may take longer (more than 3 years if it is a major change) and be still in process when the other change is started (Hayes 2002).

Six main types of change theories exist: (1) evolutionary, (2) teleological, (3) life cycle, (4) dialectical, (5) social cognition, and (6) culturally-based models. Evolutionary theories suggest that change is inevitable, and evolves naturally over time in response to external and internal circumstances. Teleological theories attribute change to institutional leaders who see the necessity of change. Life-cycle models focus on the natural stages of growth, maturity, and decline of an organization. In contrast to these models, dialectical models see change as evolving from conflict, rather than as a linear process, a result of clashing ideologies or belief systems (Burnes 2004). Social-cognition models describe change as being tied to individual learning and psychology, and change occurs because individuals understand they need to grow, learn, and change their behavior in response to circumstances. In cultural models, change occurs within the institution as part of the natural alterations in the human environment as human cultures are always changing (Burnes 2004).

Stakeholder Analysis

Stakeholders have a great impact on product markets as they determine the main trends and product requirements for future period of time. To decide what a customer means by more colorful, more durable, or stronger, and to build these characteristics into a product, can easily involve misinterpretations. Moreover, needs and desires must be predicted years before the product planning activity can be implemented. Also, the development of a new product may require the creation of new machines, a new distribution system, and new processes and materials. The profitability of capital outlays for these purposes must meet investment criteria. With the time span between the birth of an idea and its development and commercialization, and the uncertainties of market reactions, product development becomes a sensitive activity. Since new products are basic to a company’s growth and profitability, their development is a fundamental activity (Burnes 2004).

The main stakeholders are supplies, customers, the society (community), employees and the state in general. In the US, the law makes available a repertory of ecological policy instruments of broad coverage and applicability, strong enough to support an integrated planning process comprising the federal government, the federal entities, municipalities, and society itself. This includes the ecological organization of regions and human settlements, the mandatory evaluation of environmental impacts of important projects, ecological planning regulations, steps for the protection of natural areas, research and education, inspection, and mechanisms for social participation. The authority should have a right to regulate mobile sources and emissions from businesses and services, parking lot inspections, vehicle traffic management, control over transportation systems and public roads, emission regulations for public transportation, and authority over urban development and land use. The federal regulatory agency has reserved to itself control over industrial sources, determination of technical regulations, and operation of atmospheric monitoring systems. From the government (state) point of view, businessmen have proven that they are the marketers of the world. They have seized the initiative as advertisers, sellers, product developers, packagers, merchandisers, and perfect marketing communications systems. As a result, marketing technology is being imitated in other parts of the world. Mass-marketing knowledge and techniques are exportable commodities. Less-developed countries are recognizing that their economies can be bolstered and their economic development stimulated through marketing (Cameron and Green 2004).

Changes and HR

While all of these models have their value in explaining changes in higher education, perhaps the dialectical model of change as the result of political wrangling is most appropriate. Universities have relatively autonomous governing bodies, including the different academic departments and different parts of the administration, as well as student and faculty organizations. All of these institutions have profoundly different interests, even though they may be housed within the confines of the same diffuse structure (Burnes 2004). The university model of leadership has been called ‘organized anarchy’ rather than a true organization. Take for example, a school that wishes to build a new football stadium The football team advocates the construction because of its previous winning season (Cameron and Green 2004). Other, less well-funded sporting teams howl in outrage—the football team only recently won a championship and drew national attention, but the women’s basketball team has had a consistent winning record for many years. Yet because it is not a ‘money sport’ that attracts alumni attendance, it is ignored. These two groups desire change—the swim team wants greater recognition and a reassessment of athletic priorities, the football team believes that as it attracts more spectators, it deserves a stadium. Then, the alumni network begins to lobby hard for the stadium, as do certain students who want to belong to a well-regarded Division I school. The admissions office believes that a bigger stadium will attract more applicants. Current students struggling to pay tuition say the money should go to more scholarships and oppose the stadium (Collins 2002).

As it was mentioned above, there can be different types of change related to different systems and processes within an organization. The most common are cost reduction, redundancies, and culture change and performance improvement. It happens often when organizations have to restructure departments and redundant some positions in order to cut costs and achieve efficiency. Arguably, people remain the ‘key factors’ in organizational change. Therefore, it is reasonable to draw attention to the staff motivation, in order to successfully deliver the change and to eliminate individual resistance (Burnes 2004). At this point, it might be helpful to implement a theoretical approach to the restructuring process. There are many theories which explain the importance of employee motivation in organizational development. When we refer these factors to the restructuring, the job security issue and working conditions may arise. During the restructuring and deletion of one of the departments and consequential redundancies, people may start to worry about their future; as a result people might be demotivated. As the second factor, the theory distinguishes motivators or a growth factor. Great attention should be drawn to the restructuring of jobs when making changes within an organization, because the nature of the work might be one of the motivating factors. If the nature of a job is well designed an employee is genuinely encouraged to self-develop and exercise self-management learning (which is undoubtedly needed in change process) (Collins 2002).

An important point, that appropriate managerial behavior is one of the key factors of the change process. Certainly, it is manager’s responsibility to be able to introduce and manage change, also to ensure the organizational objectives of change are met. During change, manager has to be aware of close relations between organizational culture, staff motivation and high performance standards. In order to gain commitment to change and eliminate employee resistance, management has to create healthy climate and to involve employees in the decision making process by developing an open communication culture. Therefore, effective HRM (based on a human factor) plays an important part in organizational change, as change processes may be perceived by employees as job insecurity and lead to staff morale and motivation issues and consequently to low productivity. As an employee’s needs are structured into a hierarchy, he or she would progress up the hierarchy only when the lower level of need has been satisfied. Furthermore, referring to the theory such needs as sense of achievement, social recognition and responsibility can be a source of motivation at the workplace, and be a driving force of change (Collins 2002).

Additionally, during restructuring process in any organization culture is perceived as one of the significant components, as it is remains an ‘effective element of effective organizational performance. Organizational culture is developed over a long period of time and has ‘pervasive influence’ over behavior and actions of employees. Also, culture may be a powerful component in improving organizational performance and reducing complexities and resistance to change (Burnes 2004). One could argue therefore, that the organisation may find it difficult to reduce resistance to change. They say, that the best way to reduce resistance to change is to involve all employees in change process, develop open communication culture, which enables to eliminate stress and encourage initiative. Furthermore, manager is required to coordinate, direct employees at all stages of the change process in order to help them to adapt to new environments and overcome possible difficulties (facilitation and support). The manipulation and co-option skills of managers means identifying the leaders oposition and finding ways to control them and make them a part of the change program (Carnall, 2007). The use of explicitl or implicit‘ methods or, in other words, implementation of power culture forces employees to accept change threated with firing, transfering or not promoting. In other words, before enforcing a change process, an analysis should be made in order to distinguish potential impact of change on people in their jobs, and other variables that may be involved in planning and implementing change programm (Collins 2002).

Conclusion

In sum, the model of effective change should be based on Lewin’s model. This combination will help any organization to avoid failure and introduce changes in a short period of time. The change process will be essential aspects of strategic improvements. Strangely enough, of all these characteristics, change is the most misunderstood. The very idea seems completely foreign to the modern mind. It is often deliberately confused for advantage–strategically. Generally speaking, careless use has made the word meaningless and rendered contemporary organization all but dysfunctional. As a matter of fact, it is so exclusively a part of strategic systems that they all necessarily engage in strategy, even in refusal. The results are disastrous: promises are not kept, expectations are not fulfilled, and good faith and good will are lost. Arguably, enforcing change in organization is all about managing risk. In many situations, consequences of change are difficult and impossible to predict. In order to change management, organizational and managers should introduce effective, coercive, directive, consultative and collaborative styles of leadership and efficient managerial behavior patterns. Access to participation in new strategic tasks, as well as opportunities to learn and be supported and guided, is not distributed in modern organizations. Not all employees are welcomed or assisted to learn the requirements for change. Affiliations, gender, race, language, workplace differences or the basis of employment can separate workers. In this case, the task of management is to reduce resistance to change and introduce effective communication and motivational factors (such as training, management support, collaboration between departments, etc.). These employees may have to struggle to gain access to the activities and support required to develop professional skills and knowledge in such contested workplaces. The requirements for professional skills in the workplace cannot be reduced to understanding the bundle of technical skills required for managerial performance. Some will see change and learning arrangements only as occasions that will further expose their inherent weaknesses. Therefore they may be reluctant to participate in change. Given the active role employees play in learning new knowledge, how they engage in particular tasks will influence what they take from that task. Culture and motivation should be a part of the change process which helps to create a new organizational environment and inspire workers to accept change and innovations.

List of References

Balogun J. and V.H. Hailey 2004, Exploring Strategic Change, Pearson Education, 2^nd edition.

Burnes B. 2004, Managing Change: A Strategic Approach to Organisational Dynamics, FT Prentice Hall, 4^th edition.

Carnall, C. 2007, Managing Change in Organisations, Financial Times Press, 5^th edition.

Collins David. 2002, Organizational Change: Sociological Perspectives, Routledge.

Cameron E. and M. Green 2004, Making Sense of Change Management, Kogan Page.

Hayes J. 2002, The Theory and Practice of Change Management, Palgrave Macmillan.

Hughes M. 2006, Change Management: A Critical Perspective, CIPD, London.

Thornhill, A. P. Lewis, M. Millmore and M. Saunders 2000, Managing Change: A Human Resource Strategy Approach, Pearson Education.