A transition or a transformation process either in human life, growth or in any organization is a change. Organizational change is therefore a term used to describe the transformation process that a company goes through in response to a strategic reorientation, restructuring, change in management, merger or acquisition or the development of new goals and objectives for the company.
The realignment of resources and the redeployment of capital can bring many challenges during the transformation process and organizational change management seeks to address this by adopting best practice standards to assist with the integration of new company vision.
An Organizational change is not just a change for the sake of change itself. The major precursor for organizational change is some form of exogenous force such as an external event. Cuts in companies funding, the streamline of operations due to a merger are common examples of the magnitude of an event that creates organizational change and development.
Companies that are nearing the end of the product life cycle make organizational changes in response to exiting a market or reorienting resources to new or existing business operations. [1]
1.2 CAUSES OF ORGANIZATIONAL CHANGES
This is a time of unprecedented change in our society. The changes one experiences are happening at faster and faster rates. As examples, the telephone, radio, TV, and microwave were not even in use decades ago, and today these gadgets are commonplace, along with the computer, Internet, and fax machine.
In just a few months, the technology that an organization uses on an everyday basis may be outdated and replaced. That means an organization needs to be responsive to advances in the technological environment; its employees' work skills must evolve as technology evolves. Organizations that refuse to adapt are likely to be the ones that will not be around in a few years to come. If an organization wants to survive and prosper, its managers must continually be innovative and adapt to new situations.
Every organization goes through periods of transformation that can cause stress and uncertainty. To be successful, organizations must embrace many types of change. Businesses must develop improved production technologies, create new products desired in the marketplace, implement new administrative systems, and upgrade employees' skills. Organizations that adapt successfully are both profitable and admired.
Managers must contend with all factors that affect their organizations. The following lists internal and external environmental factors that can encourage organizational changes:
The external environment is affected by PEST factors such as political, social, technological, and economic stimuli outside of the organization that cause changes.
The internal environment is affected by the organization's management policies and styles, systems, and standard operating procedures, as well as employee attitudes.
Typically, the concept of organizational change is used to describe organization-wide change, as opposed to smaller changes such as adding a new person, modifying a program, and so on. Examples of organization-wide change might include a change in mission, restructuring operations (for example, restructuring to self-managed teams or due to layoffs), new technologies, mergers, or new programs such as Total Quality Management, re-engineering, and so on.
Managers should note that all changes should be implemented as part of a strategy to accomplish an overall goal; these transformations should not take place just for the sake of change. [3]
Exit Strategy at the end of the product life cycle: As the market for a company's product reaches maturity, market growth and profits begin to diminish. Despite the fact that cost cutting occurs and marketing budgets are reduced, when the opportunity cost of deploying capital and resources to another more favourable opportunity presents, companies either sell off existing operations or cease production altogether. This can be in response to a new superior product release, a change in consumer purchasing habits or the introduction of a new technology. The exit strategy is a common cause of organizational change.
Change in Government: Employees that work for government departments can find existing initiatives get discontinued when a change in government takes place. The subsequent refocus of priorities that takes place as a result of the new governments mandate can create redundancies or a radical change in the way the department conducts its affairs.
Mergers and Acquisitions: When two competitors merge the existing business operations of both companies get centralized and streamlined. This can result in the merging of departments and processes, cost cutting and a redeployment of existing resources. Mergers and acquisitions are one of the most frequent causes of organizational change.
Strategic Refocus: When the company changes its business processes to adopt a new paradigm organizational change ensues. Consider the plight of a company that shifts its focus from a product centric to a customer centric platform. New manufacturing specifications, new marketing and a change in logistical operations create a change reaction for change throughout the organization.
Structural Change: When new administrative processes get introduced, organizational change results. Consider the ramifications of centralizing an archiving process using computer technology. Old redundant processes get replaced by new software and hardware and staff members are required to retrain to operate the new systems.
Process Oriented: When a company redefines its manufacturing operations by changing its manufacturing process to a JIT operation, infrastructure, warehousing and logistical operations are required to be redesigned and deployed. This structural shift in the way a product is created has a domino effect on organizational change. [1]
1.3 TYPES OF ORGANIZATIONAL CHANGE
1.3.1 Organization-wide Versus Subsystem Change
Examples of organization-wide change might be a major restructuring, collaboration or "rightsizing."
Usually, organizations must undertake organization-wide change to evolve to a different
level in their life cycle, for example, going from a highly reactive, entrepreneurial organization to one that has a more stable and planned development. Experts assert that successful organizational change requires a change in culture - cultural change is another example of organization-wider change.
Examples of a change in a subsystem might include addition or removal of a product or service, reorganization of a certain department, or implementation of a new process to deliver products or services.
1.3.2 Transformational Versus Incremental Change
A transformational (or radical, fundamental) change is changing an organization's structure and culture from the traditional top-down, hierarchical structure to a large amount of self-directing teams. This can be by Business Process Re-engineering, which tries to take apart (at least on paper, at first) the major parts, processes of the organization, and then put them back together in a more optimal fashion. Transformational change is sometimes referred to as quantum change.
Examples of incremental change might include continuous improvement as a quality management process. Many times, organizations experience incremental change and its leaders do not recognize the change as such.
1.3.3 Remedial Versus Developmental Change
Change can be intended to remedy current situations, for instance, to improve the poor performance of a product or the entire organization.
Remedial projects often seem more focused and urgent because they are addressing a current, major problem. It is often easier to determine the success of these projects because the problem is solved or not.
Change can also be developmental - to make a successful situation even more successful, for example, expand the amount of customers served, or duplicate successful products or services.
1.3.4 Unplanned Versus Planned Change
Unplanned change usually occurs because of a major, sudden surprise to the organization, which causes its members to respond in a highly reactive and disorganized fashion. Unplanned change might occur when the Chief Executive Officer suddenly leaves the organization, significant public relations problems occur, poor product performance quickly results in loss of customers, or other disruptive situations arise.
Planned change occurs when leaders in the organization recognize the need for a major change and proactively organize a plan to accomplish the change. Planned change occurs with successful implementation of a Strategic Plan, plan for reorganization.
Note that planned change, even though based on a proactive and well-done plan, often does not occur in a highly organized fashion. Instead, planned change tends to occur in more of a chaotic and disruptive fashion than expected by participants. [4]
1.4 CHALLENGES OF ORGANIZATIONAL CHANGE
Planning and managing change, both cultural and technological, is one of the most challenging elements of a manager's job.
Obviously, the more a manager plan in anticipation of a change, the better he serves his subordinates and the organization. Diagnosing the causes of change and structuring a program to promote a smooth transition to the new process, structure, and so on, is critical to a manager's success. [5]
THE CHANGE MANAGEMENT MODELS
Conceptions of planned change have tendered to focus on how change can be implemented in organizations, called "theory of changing" these frameworks describe the activities that must take place to initiate and carry out successful organizational change. The three model discussed below are; Lewin's change models, the action research model and the positive model.
1.5.1 Lewin's Change Model
Kurt Lewin provided one of the earliest models of planned change. He saw change as modification of those forces keeping a system's behaviour stable. Sets of behaviour at any given moment in time are the result of two groups of forces; those striving to maintain status quo (resisting the change) and those pushing for the change. A "quasi-stationary equilibrium" is maintained if these two groups are about equal.
Kurt Lewin's viewed the change process as consisting of the following three steps;
Unfreezing. This step usually involves reducing those forces maintaining the organization's behaviour at its present level. Unfreezing is sometimes accomplished through a process of "psychological disconfirmation." By introducing information that shows discrepancies between behaviours desired by organization members and those behaviours exhibited currently, members can be motivated to engage in change activities.
Moving. This step shifts the behaviour of the organization, department, or individual to a new level. It involves intervening in the system to develop new behaviours, values, and attitudes through changes in organizational structures and processes.
Refreezing. This step stabilizes the organization at a new state of equilibrium. It is frequently accomplished through the use of supporting mechanisms that reinforce the new organizational state, such as organizational culture, rewards and structures.
Lewin's model provides a general framework for understanding organizational change. Because the three steps of change are relatively broad, considerable effort has gone into elaborating them.
1.5.2 Action Research Model
The classic action research model focuses on planned change as a cyclical process in which initial research about the organization provides information to guide subsequent action. Then the results of the action are assessed to provide further information to guide further action, and so on. This iterative cycle of research and action involves considerable collaboration among organisation members and OD practitioners. It places heavy emphasis on data gathering and diagnosis prior to action planning and implementation as well as careful evaluation of results after action is taken.
Action research is traditionally aimed both at helping specific organisations implement planned change and at developing more general knowledge that can be applied to other settings. The phases of planned change go through eight steps;
Problem identification: this stage usually begins when an executive in the organisation or someone with power and influence senses that the organisation has one or more problems that might be solved with the help of an expert.
Consultation with a Behavioural Science Expert: during the initial contact, the practitioner and the client carefully assess each other. The practitioner has his or her own normative, development theory of frame of reference and must be conscious of those assumptions and values. Sharing them with the client from the beginning establishes as open and collaborative atmosphere.
Data Gathering and Preliminary Diagnosis: It involves gathering appropriate information and analysing it to determine the underlying cause of organisational problems. The four basic methods of gathering data are interviews, process observation, questionnaires and organisational performance data (unfortunately, often overlooked). One approach to diagnosis begins with observation, proceeds to a semi-structured interview and concludes with a questionnaire to measure precisely the problems identified by the earlier steps.
Feedback to a Key Client or Group: because action research is a collaborative activity, the diagnostic data are fed back to the client, usually in a group or work -team meeting. Defining what is relevant and useful involves consideration of privacy and ethics as well as judgement about whether the group is ready for the information or if the information would make the client defensive.
Joint Diagnosis of the Problem: at this point, members discuss the feedback and explore with OD practitioner whether they want to work on identified problems. A close inter-relationship exists among data gathering, feedback and diagnosis because the consultant summarises the basic data from the client members and presents the data to them for validation and further diagnosis. He believes that "most companies have drawers full of reports by consultants, each; loaded with diagnoses and recommendation s which are either not understood or not accepted.
Joint Action Planning. Next the OD practitioner and at the client members jointly agree on further actions to be taken. This is the beginning of the moving process (described in Lewin's change mode) as the organisation decides how to reach a different quasi-stationary equilibrium. At this stage the specific action to be taken depends on the culture, technology and environment of the organisation the diagnosis of the problem and the time and expenses of the intervention
Action: this stage involves the actual change from one organisation state to another. It may include installing new methods and procedures, reorganising structures and work designs and reinforcing new behaviours. Such actions typically cannot to be implemented immediately but require a transition period as the organisation moves from the present to a desired future state
Data Gathering After Action: because action research is cyclical process, data must also be gathered after the action has been taken to measure and determine the effects of the action and to feed the results back to the organisation. This in turn may lead to re-diagnosis and new action.
The action research model underlies most current approaches to planned change and is often considered synonymous with OD. Recently it has been redefined and extended to a new settings and application of its basic framework.
The action research model will continue to be the dominant methodological basis for planned change in the near future.
1.6 THE POSITIVE MODEL
The third model of change, the positive model, represents an important departure from Lewin's model and the action research process. Those models are primarily deficit based they focused on the organisations problems and how they can be solved so it functions better. The sportive model focuses on what the organisation is doing right. It helps members understand their organisation when it is working at its best and builds off those capabilities to achieve even better results. This positive approach to change is consistent with a growing movement in the social sciences called the "positive organisational scholarship" which focuses on positive dynamics in organisations that give rise to extraordinary outcomes. Considerable research on expectation effects also supports this model of planned change. It shows that people tend to act in ways that make their expectations occur. Thus, positive expectations about the organisation can create an anticipation that energises and directs behaviour toward making those beliefs happen.
The positive model has been applied to planned change primarily through a process called appreciative inquiry (AI). As a "reformist and rebellious" form of social constructionism, AI explicitly infuses a positive value orientation into analysing and changing organisations. Social constructionism assumes that organisation members shared experiences and interactions influence how they perceive the organisation and behave in it. Because such shared meaning can determine how members approach planned change, AI encourages a positive orientation to how change is conceived and managed. It promotes broad member involvement in creating a shared vision about the organisation's positive potential. That shared appreciation provides a powerful and guiding image of what the organisation could be.
Drawing heavily on AI the positive model of planned change involves five phases
Initiate the Inquiry. This first phase determines the subject of change. It emphasises member involvement to identify the organisational issue they have the most energy to address. For example, members can choose to look for successful male-female collaboration (as opposed to sexual discrimination), instances of customer satisfaction (as opposed to customer dissatisfaction), particularly effective work teams, or product development processes that brought new ideas to market especially fast. If the focus of inquiry is real and vital to organisation members, the change process itself will take on these positive attributes.
Inquiry into Best Practices. This phase involves gathering information about the "best of what is" in the organisation. If the topic is organisational innovation, then members help to develop an interview protocol that collects stories of new ideas that were developed and implemented in the organisation. Organisational members conduct the interviews, they interview each other and tell stories of innovation in which they have personally been involved. These stories are pulled together to create a pool of information describing the organisation as an innovative system.
Discover the Themes. In this third phase, members examine the stories both large and small, to identify a set of themes representing the common dimensions of people's experiences. For example, at the stories of innovation may contain themes about how managers gave people at the freedom to explore a new idea, the support the organization members received from their co-workers. The themes represent the basis for moving from "what is" to "what could be."
Envision a Preferred Future. Members then examine the identified themes, challenge the status quo, and describe a compelling future. Members also identify the relevant stakeholders and critical organisation process that must be aligned to support the emergence of the envisioned future. The vision becomes a statement of "what should be."
Design and Deliver Ways to Create the Future. This is the final phase which describes the activities and creates the plans necessary to bring about the vision. Members' makes changes, assess the results, make necessary adjustments, as they move the organization toward the vision and sustain "what will be". [2]
1.7 Conclusion
Change is dynamic and as a transformational process and it is inevitable, and organisations cannot ignore the need to transform for growth and maximise profits. The change and its impact on the employees and other stakeholders need to be explained carefully and be managed effectively to achieve the organisation's goals.
