An Empirical Analysis – Dissertation Sample

An empirical analysis of 'X companies' approach to strategic and organisational change

Change Management

Resistance to Change

Employees can face increased levels of anxiety or fear from changes or proposed changes in the work environment. These changes are then resisted, caused by fear of the unknown, this is not normally malicious, just an innate reaction. A major risk of implementation of organisational change is the suspicion of some employees to the proposed changes. With uncertainty and fear for their future, employees can slow down the change process. Individuals can resist by withholding information and hindering the process wherever possible. Resistance can become overt i.e. in industrial action, including working to rule and strikes (Coram, R, and Burnes, B. 2001).

It is vital to disseminate the news to employees as early and clearly as possible. Even when bad news is involved, information reduces uncertainty. The informal groups within the organisation will spread information quickly, although the accuracy of it is questionable. Knowledge removes fear from an individual, and gives them the confidence to change (Mullins, L. 2005).

The change process and methodologies

Over the last 20 years the speed and scale of organisational change appears to have accelerated, there has been a significant increase in the number of approaches to change management. There are several forms of change in an organisation, some forced and others deliberate.



There is an obsession with change that focuses on what is imposed from the top. Although the success rate of this forced change is not very high. Huy and Mintzberg (2003) argues that “the realization that effective organizational change often emerges inadvertently or develops in a more orderly fashion” For the organisational change to succeed, all types of change should be considered (Huy, Q. and Mintzberg, H.2003:79).



Systematic change is slower, less ruthless, more focused and more carefully constructed and sequenced. There have been many approaches to systematic change, including quality improvement, work reprogramming, benchmarking, and strategic planning. The nature of these approaches can be overly formalised and so stifle initiative in the organisation (Huy,Q. and Mintzberg, H.2003).



Organic change seems to ascend from the ranks without being formally managed. A problem with the organic approach is groups may begin to work at cross-purposes and fight each other over resources. Organic change can proceed as a challenge to that authority, yet its results can be dramatic (Huy,Q. and Mintzberg, H.2003).



Planned change is an iterative, recurring, process involving analysis, action and evaluation, and further action and evaluation. It is an approach which maintains that once change has taken place, it must be self-sustaining. The purpose of planned change is to improve the effectiveness of the human side of the organisation by focusing on the performance of groups and teams. Central to Planned change is the stress placed on the collaborative nature of the change effort: the organisation, managers, recipients of change and change agents jointly diagnose the organisation's problem and jointly plan and design the specific changes (Burnes, B. 2003).



The main criticisms levelled against the planned approach to change are, as Burnes and Salauroo (1995) point out, as follows. Planned change was developed for, and in response to, top-down, autocratic, rigid, rule-based organisations. These organisations operate in a predictable and controlled environment (Burnes, B and Salauroo, M. 1995 Cited in Coram, R, and Burnes, B. 2001).



It is argued by chaos theorists that the world of the organisations is unstable and chaotic, making it impossible for them to foresee the future. Therefore traditional approaches to strategic decision making are no longer relevant (Johnson J & Scholes K 2004). Increased competitiveness has raised the value of organisational strategy, for organisations to be competitive they must adapt faster to change. Therefore all organisations are subjected to the constant pressure of change (Mullins, L 2005).

Planned change is based on the assumption that common agreement can be reached, and that all the parties involved in a particular change project have a willingness and interest in doing so. This assumption appears to ignore organisational conflict and politics, or at least assumes that problem issues can be easily identified and resolved (Burnes, B and Salauroo, M. 1995 Cited in Coram, R, and Burnes, B. 2001).



Emergent change is a continuous process of experiment and adaptation aimed at matching an organisation's capabilities to the needs and dictates of an energetic and uncertain environment. This change is achieved through a multitude of small to medium-scale incremental changes. This change is a political social process not an analytical rational and is multi level, cross organisation process. The role of managers is to foster an organisational structure and culture which encourages and sustains experimentation, learning and risk-taking (Coram, R, and Burnes, B. 2001).



Dramatic change is frequently initiated in times of crisis or of great opportunity when power is concentrated and there is great slack to be leveraged. Dramatic change always makes headlines in the press, first about its promises and later about its often-dramatic collapses. Huy and Mintzberg (2003) discussed that “unlike the phoenix of mythology, which could rise from its own ashes but once every 500 years, companies cannot continue to rely solely upon the mythical promise of dramatic re-emergence” They do not concur that organisations should abandon dramatic initiatives, but the must consider that lasting, effective change arises from the natural, rhythmic combination of organic and systematic change with the well-placed smattering of dramatic transformation (Huy, Q. and Mintzberg, H. 2003:82)



A model to assist managers whilst planning change is Storey’s (1992) four-fold typology of change, (1) Top-down systemic change. This is aimed at transforming the organisation. (2) Piecemeal initiatives. These are devised and implemented by departments or sections in an unconnected fashion. (3) Bargaining for change. This is where a series of targets are jointly agreed between managers and workers, but are pursued in a piecemeal fashion. (4) Systemic jointism. This is where managers and workers agree a total package of changes designed to achieve organisational transformation (Storey, R. 1992).

Organisation change

From Kurt Lewin's work in the 1940s to the present day, organisational change, as a systematic process, has moved from being a topic of interest to only a few academics and practitioners to one that is seen as lying at the core of organisational life. As Stickland (1998, p. 14) remarks:"…the problem with studying change is that it parades across many subject domains under numerous guises, such as transformation, development, metamorphosis, transmutation, evolution, regeneration, innovation, revolution and transition to name but a few" (Stickland 1998 :14)



Change in organisations does not have to be dramatic or far reaching. Stickland (1998) notes, “sometimes change is incremental and hardly noticed: a new piece of equipment or software is introduced or a person leaves and somebody new joins the organisation. Sometimes change is large and dramatic: a complete re-organisation, a merger or a take-over, and no one and nothing in the organisation is unaffected “(Stickland 1998:298).



The failure rate of organisational change is alarming. Authors have tried to identify the causes of failure, whether these are errors, barriers or obstacles. In a recent study by Burnes (2003) it was identified that the majority of causes of failure represented a failure in the skills of management, including poor and ineffectual leadership. These failures were attributed to managers lacking the skills, competencies, or aptitudes necessary to manage change successfully (Burnes, B. 2003).



The two greatest challenges facing organisations today are leadership and change, recruiting, retaining and developing managers. These managers are then capable of successfully managing organisational change (Mullins, 2005; Peters, 1997). Burns (1979) stated that “that the prime task of leaders is to bring about change and change requires leadership” (Burns 1979 cited in Burnes 2003). Management development can increase the skills of the individual to bring about organisational change. You can also buy dissertation at PhDify.com



Various cultural and structural factors have a direct affect on the very success of the organisation. These are highlighted when an organisation attempts to redefine itself, to change their image in an attempt to maintain or to enhance their capabilities (L Gratton, 1999). Organisations that have failure at cultural change, should review and react, if not they are wasting valuable resources at each attempt. Organisations can place them selves in a position that requires constant change, and constant failure. Weick (1979) stated that “organisations that keep falling apart….will require chronic rebuilding If an organisation is caught in this cycle, then the stake holders must question the management decisions (Weick (1979) cited in Beardwell, I. et al 2004:80).

Acquisition & Mergers – changes from this

The 1980s and 1990s heralded unprecedented merger and acquisition (M&A) activity across the world. The realisation of value from acquisition and merger activity has been notoriously difficult to achieve.



There is a growing consensus that one of the principle causes of under- performance and failure is the lack of focus and expertise in managing the people and culture issues. Clemente and Greenspan (2000) stated that they are often “focused solely on convincing its shareholders to approve the deal but neglected to focus on preserving the crucial human assets it was acquiring” It is unthinkable to embark upon M & A activity without a thorough financial audit, firms did not conduct cultural or people assessments before engaging in a merger (Clemente, M. and Greenspan, D. 2000).



Not only do many M & As under-perform, but a very large number of them also fail completely. Recent estimates of failure vary between 50% and 75%. Similarly, joint ventures are found to be highly unstable, with about 25% of them failing during the first 18 months (Cartwright and Cooper, 1995)

From this perspective the vagaries of human behaviour through organisational change can appear unpredictable, chaotic and all too difficult to manage. The art of transforming people and culture has yet to be incorporated into management theory and practice and has only recently emerged from a synthesis of human disciplines (psychology, sociology, and systems theory). The forerunner perhaps found its clearest expression in psycho-social theory and practice, which addresses the complex interplay between the inner world and the individual and the social or organisational context. (Hollis, 1966).



Typically acquired or merged organisations experience a rate of staff turnover in the first two years post merger of at least 30 per cent and as high as 60 per cent. There is an increase in stress related physiological and mental health problems amongst employees. This will have a negative effect on the performance of a substantial number of employees continuing well after the initial transition. The organisational implications are decreased performance and effectiveness (Clemente, M. and Greenspan, D. 2000).

Strategic Change

Managerial decisions are made to identify what is required to implement the new strategy. Are new resources are required? I.e. property, finance or employees, then the risk should be assessed for its long term value to the organisation. Strategies should not only be considered on how they will affect existing resource capabilities, but also if needed new resources and how they will be controlled The costs to the organisation should be weighed against the long term gains, and if needed it can be reviewed, accessed and amended accordingly (Johnson G, & Scholes K, 2004).



Managers of organisations have responsibility to get the strategic intent right, not just for the advantage of the organisation. Drucker (1989) discussed the responsibility of management as being “decisive not only for the enterprises itself, but for the Managements’ public standing….for the very future of our economic and social system and the survival of enterprise. The decisions that managers make, do not just affect the organisation, they have an affect on the whole of society, with ethical, environmental and social considerations. Misjudged and misguided strategies have in the past brought down organisations both financially and in their reputation, damaging the public’s opinion of them (Drucker (1989) cited in Mullins 2005:214).



Choice management is the process whereby an organisation makes decisions regarding change. These choices are seen as being an outcome of the context in which an organization operates the focus of its decision making attention and its trajectory. The trajectory is composed of an organisation's past actions and proposed future direction, and is seen as the outcome of the combined effects on the organization of its vision, strategy and past changes. The change process is itself both a power on and a result of the trajectory process (Burnes, B 1997).



The Burnes (1997) model resolves the debate over whether change is driven by strategy or whether strategy is the product of past changes. Both are part of the same iterative process, decisions centrally change will be influenced by how change has been carried out in the past, and the degree of success achieved. Therefore, past changes do shape an organisation's current choices (Burnes, B 1997)

Organisational behaviour

Culture

Cultural descriptions distinguish one organisation from another, and influence the people in the company as individuals as well as company performance. Such "culture" is a diffuse and nebulous notion, encompassing the underlying values, beliefs and principles of the personnel as they are expressed within the management, structure and practices. Culture is said to be a product of individual minds that is expressed as shared meaning, values and purpose within the whole of a group. It is very often hidden and unpredictable. It can be nurtured, but not controlled. Morgan (1998) notes, "The metaphor helps us to rethink almost every aspect of corporate functioning, including strategy, structure, design, and the nature of leadership (Morgan (1998) cited in Stalinski.,S. 2004).



Although Trompenaars suggests that all societies view business activities in a different way. The American dream is the French nightmare. It is helpful in linking the dimensions of culture to aspects of organisational behaviour which are of direct relevance, particularly to people approaching a new culture for the first time (F, Trompenaars (n.d) cited in Mullins l. 2005:49).



Handy has expanded on the earlier work of Harrison, categorising organisational culture into four main groups, from these groups the styles of leadership can be identified. All organisations have their own unique culture larger organisations can have several cultures and sub cultures (Handy cited in Mullins, L. 2005). These sub cultures can arise from external influences, such as union membership, or can come from the structure of the organisation i.e. broken into divisions. When deciding on future strategies these sub cultures should be considered as part of organisational culture. If they are left as a periphery it could increase the risks when implementing the new strategy (Johnson G & Scholes K 2004).

Motivation

The development of the theories on motivation at work highlights the shifting schools of thought to the very notion of motivation and the institution of the work place. Ritti stated “we know a good deal about human motivation and most of it is correct, then why the mystery, the answer is we simply don’t act on it” Motivation of employees has been studied since Taloyrism, although well discussed in theory, very little of the theory transfers into the work place (Ritti cited in L Mullins 2005:490).



There are four main categories that the theories of motivation are classified (1) Economic needs of man, money motivates, Taylorism (2) Social concept of motivation, from the Hawthorne studies (3) Self actualisation this took the findings from the Hawthorne studies further, psychological issues were studied (4) the contingency approach, large number of variables that influence a persons motivation. These theories all have factors that relate to the work place (Mullins L. 2005).



There was no thought to their physical or psychological well being. This style of management has been widely criticised, Marchington (1997) described this theory as “equating people with machines” The assumption that the need to earn money is the one universal method for motivating people at work (M Marchington 1997:295). People within organisation would act accordingly. Rose (1978) discussed the concept of rational-economic person would lead to “employees that are expected to be indifferent, hostile and only motivated economic incentives, the management strategies……….are likely to train them to behave like that (M Rose 1978:62).

The psychological contract between an employee and employer is based on the employee carrying out workplace duties in exchange for the employer meeting certain employee needs. The employer expects that an employee will carry out duties in a capable and suitable manner. The employee requires recognition, and confirmation of his worth through reasonable monetary compensation (Walton cited in I Beardwell & L Holden, 1994:13). The wage received from the employer is not the sole motivator it satisfies the contract of employment. Hegewisch (1991) discussed “the pay packet is one of the most visible expression of the employment relationship, its main issue is the exchange between employer and employee, expressing a connection between the labour market, the individuals work and the performance of employing the organisation itself”(Hegewisch (1991) cited in I Beardwell & L Holden 1994:500).

Leadership culture

Classical authors described organisations in terms of its purpose, with its prescribed structure; the hierarchy of the organisation. The importance placed on work planning, achieving this through managing the technical requirements, and the presumption of rational and logical behaviour from within the organisation (Mullins, L. 2005). Classic management literature is all about the need for controlling and coordinating by designing systems, creating structures and making decisions. Managerial work also involves directing, such as issuing directives, delegating tasks and authorizing decisions (Mintzberg, H. 1999).



There are many disputes within the organisation, leading to conflict between management and employees. Wilson (1999) described employees’ reaction to control as they are “not just passive objects of control, they may accept, deny, react, rethink….or rebel” (Wilson, F. 1999:103). Mullins discussed that most people did not wish to have “control applied to them, but they recognised the need for a control system” (Mullins, L. 2005:832).



Mintzberg (1999) argued that management is on three successive levels, both inside and outside the organization, (1) an information level (closest to the managers), controlling and communicating. (2) A people level – leading and linking. (3) An action level (closest to the organization and the business environment) doing and dealing. At the individual level, leaders teach, coach and motivate; at the group level, they build teams and resolve conflicts; at the organisational level, leaders build culture (Mintzberg, H. 1999).



Managers during periods of excessive organisational change need to consider the implications to employees. As discussed in previously, these changes are quiet often resisted, reducing the chance of success. Change management should be a component of management training.