Organizational Change Essay
1 THE NEED FOR ORGANISATIONS TO CHANGE
Organisations worldwide are currently facing increasing competition, price pressures and slower growth rates and in order to be successful, for many organisations, this prompts the need to constantly change to survive (Appelbaum, Delage, Gault & Labib, 1997; Burnes, 2004; Ndlovu & Parumasur, 2005)
This new type of organisation is dynamic and change has become strategic to stay ahead of the game. Successful organisations are changing continuously but managing their change positively and carefully which results in increased productivity, commitment and involvement from employees (Kenton & Penn, 2009; Ndlovu & Parumasur, 2005).
According to Luthans (2011), a successful organisation needs to create a learning culture that is proactive in its approach to both internal and external forces of change.
2 AIM OF DISCUSSION
In an economy that is rapidly changing, an organisation’s ability to anticipate and respond to forces of change is a key success factor (Luthans, 2011; Robbins et al, 2009). The aim of this discussion is to provide a critical overview of change in the organisational context, using the field of Organisational Behaviour to analyse change at the individual and organisational level and to examine the ways in which organisations try to eliminate resistance to change in the workplace. More specifically, the case study of organisational change at Nissan South Africa will be used to illustrate the impacts of change and the ways in which organisations try to manage change at the individual and organisational level.
The following aspects will be further discussed to give an extensive understanding of organisational change: An overview of the concept of change, and the ways in which organisations should prepare for change An analysis of the change process using Kurt Lewin’s model, A discussion of the ways of reducing resistance to change in the workplace, An examination of the reasons for resisting change at the individual and organisational level An overview of the ways in which organisations should manage resistance to change in the workplace.
2 PREPARING AN ORGANISATION FOR CHANGE
3 THE CONCEPT OF CHANGE
The concept of organisational change has many different meanings, but simply, it can be explained as the transition of an organisation from its current state to a desired state. Kenton & Penn (2009) highlight two types of changes, evolutionary and revolutionary change. Evolutionary change refers to continuous improvements of an organization which is gradual. This type of change becomes part of the norm in the ways of working. Revolutionary change refers to radical changes in ways of working where there are periods of normal operations followed by periods of drastic change (Kenton & Penn, 2009).
Robbins et al (2009) describe change as planned or unplanned. Both of these types of change refer to a transformation, however, planned change is seen as a proactive approach to improve an organisation’s ability to adapt to anticipated forces of change. Forces of change can be internal or external.
For South African organisations, change is overdue. After the sanctions of political Apartheid regime were lifted, South African organisations have found themselves in a climate where the need for change has intensified due to the political and economic changes, an increasing diverse workforce, technological advances, increasing global competition, and rapid social developments. These internal and external forces of change need to be closely managed for an organisation to be profitable.
4 THE USE OF CHANGE AGENTS
At the heart of an organisation are its people. Thus for any change to occur an organisation needs it’s people to change (Pasmore & Fagans, 1992). To prepare employees for change organisations often use change agents to facilitate organisational change. These change agents can be internal (e.g. managers, H.R. practitioners) or external (e.g. consultants). Internal agents, such as managers, are useful in that they have a deep understanding of the organisation’s systems and culture whereas an external agent, such as consultants, offer more objectivity and have a deeper understanding of change processes (Cummings & Worley, 2009; Kenton & Penn,2009; Robbins et al, 2009; Worren, Ruddle & Moore, 1999).
5 THE LEARNING ORGANISATION
Burnes (2004) refers to organisational change as a constant feature both at an operational and strategic level. Thus for organisations to ensure their sustainability they need to constantly and actively identify the forces of change, their desired state and take the necessary actions to manage these changes to achieve the desired state. These organisations need to become learning organisations where there is a systems thinking approach, open and honest communication, teamwork, the presence of innovation and change, a gap between a desired state and current state to serve as motivation for change, critical reflection, empowerment and empathy, inspired leadership and other external factors (Luthans, 2011; Robbins et al, 2009).
6 DEVELOPING A CHANGE MODEL
As discussed, learning organisations are key to successful organisational change. The characteristics of a learning organization are at the core of the organisation’s culture. One of the important steps to prepare an organisation for change is to assess its current culture and desired culture. From this an organisation can identify how to manage change. A change model or a development process should be used to identify an organisations current and desired culture and to facilitate the change process (Burnes, 2004; Cummings & Worley, 2009; Luthans, 2011; Robbins et al, 2009).
According to Worren et al (1999), this change model needs to be an integrative and holistic approach for change management that focuses on strategic changes to process and people. Some of these models for change include Kurt Lewin’s three step change process, action research, and the positive model, amongst others (Cummings & Worley, 2009; Luthans, 2011; Robbins et al, 2009). Kotter’s eight step plan for change will now be used to illustrate how to prepare for change management in an organisation followed by a detailed discussion of Kurt Lewin’s model for change process.
7 PREPARING NISSAN SA FOR CHANGE USING KOTTER’S EIGHT STEP PLAN
Kotter’s eight step plan was developed as a result of findings that majority of organisational change efforts failed. This model indicates that the change process is a series of long phases and mistakes in any of these phases can have a considerable impact of the success of the change effort (Robbins et al, 2009). Kotter’s model will now be further explained with application to the Nissan S.A. case study.
2.1.1 Establish a sense of urgency
The first step to avoiding failure of a change management process is to create a reason for the need to change (Robbins et al, 2009). For Nissan S.A. this could be a number of factors (both internal and external) to change. Externally, the organisation needs to change to meet world class standards of performance and to be able to compete. Internally the organisation needed to improve its efficiency, align to internal global standards, as well as to improve on its labour workforce to be sustainable in the future.
Nissan S.A. should develop scenarios identifying the threats and opportunities for the future. Nissan S.A. needs to communicate well the reasons for transformation and downsizing, the internal and external forces that have prompted change and the factors that are within the employees control and out of their locus of control. The organisation could also request support from outside stakeholders to support their argument.
2.1.2 Form a powerful coalition to lead change
The second step to managing change is to create a team of change agents. These change agents need to be strong leaders that constantly communicate the urgency for change (Robbins et al, 2009). NUMSA members, managers as well as some older influential employees could be targeted for this team at Nissan S.A. This team should be used to convince others of the urgency for change and the need to take voluntary severance packages vs. forced retrenchment.
2.1.3 Create a vision for change
The next step in the change management plan is to create a clear understanding of why the change is needed and what is the end goal (Robbins et al, 2009). Creating this vision can help convince and direct employees. Nissan S.A. should create a vision that would encourage employees to take severance packages, creating a vision of the end state for them, for example, starting their own business as suppliers.
2.1.4 Communicate the vision
Once the vision is created it needs to be continuously communicated (Robbins et al, 2009). Poor communication about the downsizing process, the new structures, roles and future of the organisation can impact on trust and loyalty of survivors (Appelbaum et al 1997; Aucamp, 2001). Organisations need to constantly communicate to employees throughout the downsizing process as well as after, providing support and encouraging positive attitudes and commitment (Ngirande & Nel, 2012).
Organisations should communicate the future of the organisation, clarify the new roles of employees, and be transparent about the reasons for downsizing. Constant communication will build security, trust and commitment (Aucamp, 2001; Luthans, 2011; Ndlovu & Parumasur , 2005). Nissan S.A. could follow the example of the tools the mining company De Beers used for staff communication. Some of these include open employee engagement sessions, videos from leaders communicating the vision, one on one sessions, helpdesks and regular emails/ letters (Bomela, 2007).
2.1.5 Empower others to act on the vision
Once the vision is created and communicated it needs to be actioned. But there will be obstacles to make this happen. Therefore it is important that the team of change agents are empowered to keep the vision and direction alive. One of the ways Nissan S.A. could do this is to identify those resisting change and help them move past their conflict as well as rewarding the team of change agents that are working to facilitate the transition (Furst & Cable, 2008; Robbins et al, 2009).
2.1.6 Create short term wins
The next step is to identify the low hanging fruit that aids the vision and celebrate achieving these steps to motivate employees (Robbins et al, 2009). For example, Nissan S.A. could have celebrated the agreement reached with NUMSA and communicated this widely across the organisation as a positive agreement. Another example, Nissan S.A. could celebrate and reward the first few employees that have taken the severance packages and that have become suppliers.
2.1.7 Consolidate and build on change
To avoid failure of a change process it is important to continuously assess the change plan, vision/actions and to change and make improvements along the way (Robbins et al, 2009). Nissan S.A. should have constantly assessed their change program and when they found poor responses to severance packages they should have revised their plans and changed the way of doing things to target more responses. Some of the improvements that could be made is in communication to employees or educating and training employees in becoming “change masters” (Aucamp, 2001, Oxtoby, Mcguiness & Morgan, 2002).
2.1.8 Reinforce the changes
One of the most important steps in Kotter’s plan is to embed the plan such that it becomes core to the organisation’s culture. This is about creating a
learning organisation where change becomes part of the normal ways of working and where employees have the ability to manage change easily (Luthans, 2011; Robbins et al, 2009). Some of the things that Nissan S.A. could do is to add and constantly empower their team of change agents and publicly recognise these change agents, as well as include change management values when hiring their new staff to ensure continuity of the culture (Oxtoby et al, 2002).
8 PREPARING NISSAN S.A. FOR CHANGE
As discussed, to manage change, a model or process is an important tool in facilitating the change process. Key to the process though are the employees who themselves need to change. The use of change agents is an impactful way in which to encourage employees to change and to create a learning culture. Some of the key highlights that Nissan S.A. could use in preparing their organisation for change include assessing their current and desired culture, developing a team of change agents to facilitate change, creating a short term and long term change strategy and constantly improving on their change plans to achieve their goals.
Some of the things that may impact an organisation’s readiness for change are the employees’ perception toward change efforts, the level of trust, communication and support from managers, and the employees’ level of acceptance of the change (Susanto, 2008).
Central to the steps in preparing for change is to create a learning culture/ organisation to manage planned change. Planned change if managed through a model or process can improve an organisation’s efficiency and effectiveness in achieving its goals (Burnes, 2004; Robbins et al, 2009).
3 KURT LEWIN’S THREE STEP CHANGE MODEL
One of the models for planned change that can be used for the Nissan S.A. case study is Kurt Lewin’s three step model for change process which is based on the theory that for change to occur there needs to be a challenge to the status quo whereby the forces driving change must overcome the forces against change (Robbins et al, 2009).
9 STEP ONE: UNFREEZING
This first step for change involves challenging the current status quo and weakening forces against change. Lewin indicated that for employees to accept the new change then they need to “unlearn” the current status quo (Burnes, 2004). To do this it is important to convince employees of the need for the change (Cummings & Worley, 2009; Robbins et al, 2009). According to Robbins et al (2009) unfreezing involves either increasing the driving forces, reducing the forces against change or a collaboration of both of these approaches. Currently at Nissan S.A. the forces against the change is clearly stronger than the forces driving change.
Nissan S.A. need to clearly communicate the needs for the change and work on strategies to convince employees of the desired future state. The use of change agents in this instance could be very useful as they will introduce the new desired state in a positive way to challenge the current status quo and convince others (Robbins et al, 2009). Some of the things that need to be clearly communicated are the need and reasons for downsizing as well as the short term benefits of the rejuvenation process (severance package, small business start up, staying on longer to train others) vs. forced retrenchment and long terms benefits of the rejuvenation process (increased efficiency, effectiveness and sustainability of the business).
10 STEP TWO: MOVING
Once the current status quo has been unfrozen and employees start to accept and adopt new status quo it is important that the new status quo is strengthened. To do this involves changes to structures and processes (Cummings & Worley, 2009; Robbins et al, 2009). Nissan S.A. needs to identify those change agents and empower them to facilitate change. Another step that is important is creating short term goals for the change process and communicating this throughout the organisation as well as to assist those employees resisting change to accept change (through communication, education, more involvement). According to Oxtoby et al (2002), apart from methods and changes to structures, equally important is the time need to
build employees’ career resilience.
11 STEP THREE: REFREEZING
Refreezing involves reinforcing the new status quo that has been created by balancing the forces for and against change (Robbins et al, 2009). It is important that the new strategies implemented become permanenent through creating a learning culture/organisation (Burnes, 2004; Luthans 2011, Robbins et al, 2009). This can be done through introducing a reward system. Another important step is for Nissan S.A. to constantly assess their change strategies and adjust it so they can achieve their desired goal. Some of the things that Nissan S.A. could do is to add and constantly empower their team of change agents and publicly recognise these change agents, as well as include change management values when hiring their new staff to ensure continuity of the culture.
12 REDUCING RESISTANCE TO CHANGE
Resistance to change can be evident at both the individual and organisational level (Cummings & Worley, 2009). From Lewin’s model of change and Kotter’s eight step plan it is evident that there will always be some resistance to change from employees. It is important that the resistance to change is managed appropriately for change to occur. For change efforts to be successful organisations need to reduce resistance from employees for them to adopt new behaviours (Furst & Cable, 2008).
3.1.1 Ways to reduce employee resistance to change
According to Cummings & Worley (2009) some of the ways to reduce employee resistance can be achieved through the following five phase approach: Motivating Change
This involves preparing employees for change through communicating the need for change , the current state and desired future state of the organisation as well as reassurance that the desired future state can be achieved successfully. It also inlvoves management developing strategies to implement change and ensuring support mechanisms are in place to help employees overcome resistance to change.
Creating a vision
This phase includes creation and communication of the vision of the future state of the organisation. This vision needs to be convincing for employee buy in of the change efforts. It therefore needs to be relevant, realistic and needs to communicate the message of the improvements the change will make for individuals and the organisation.
Managing the transition
This includes the activities planned to manage the change, the changes to structures and processes to achieve the desired future state and commitment planning. Important is that these plans and activities are constantly assessed and modified if needed. It is important to keep employees engaged and informed throughout the process so that they understand the needs for change, the processes to getting there as well as keep them in the loop of the progress made.
Developing political support
This phase involves identifying key stakeholders that have powerful influence on the change process and managing these stakeholder interests and engagement in the change process. It also involves assessing the power that change agents have on the change efforts and their ability to influence others.
This includes providing the necessary resources and support for change to occur. Some of the aspects that are important is providing support from managers, training and education of employees, empowering change agents, reinforcing new behaviours (for example through reward systems) and providing feedback to employees. Telkom SA developed a change model focusing on building individuals career resilience to adapt to change more positively and empowered individuals by providing training for new roles and assuring them of their value to the organisation (Aucamp, 2001).
3.1.2 Reasons for resistance to change : Individual level
According to Robbins et al (2009) there are a number of sources of resistance at the individual level.
These include: Habit and Security
Individuals lead complex lives and are constantly faced with having to make decisions. One of the ways to reduce and manage complexity is to rely on habits (programmed responses). Some individuals have a high reliance on their feelings of safety. Any threats to security can result in individuals resisting change as new behaviours sit outside of their comfort zone and any changes that conflict with existing habits can also be a reason for resistance as individuals have a tendency to rely on habitual behaviour. (Robbins et al, 2009). According to Peus et al (2009), individuals may feel uncertainty regarding their positions, roles and responsibilities in the organization and a result will resist change.
Fear of the Unknown and Economic Factors
We live in a volatile and uncertain era where there are constant changes in the business world. Individuals faced with this constant uncertainty of the future may resistant change due to the fear of the unknown (Robbins et al, 2009). According to Peus et al (2009) individuals seek to gain prediction over future events to reduce the fear of the unknown and their loss of control. Another resistance to change can be an individual’s concern for loss of or lower income as a result of the changes.
Selective information processing
Individuals perceptions shape their thinking about the world. Robbins et al (2009) recognize that the ways in which individuals perceive their world can also be a factor in their response to change. Anything new to their way of thinking will be resisted as it is not part of their current knowledge system.
Fear of Failure
Peus et al (2009) also recognises the fear of not being able to cope with the new changes to processes or technologies as one the reasons individuals may resist change. If an individual believes he or she is not able to cope with the changes then there are likely to resist change. Kotter & Schlesinger (2008) also recognise that individuals may resist change if they feel they are not capable of learning new skills and behaviours to adapt to the changes.
Other factors of resistance
Kotter & Schlesinger (2008) also highlight some other reasons individuals resist change including parochial self interest, misunderstanding and lack of trust as well as different views of the benefits and costs of the changes intiated. Parochial Self interest refers to the individual’s perception that he or she will lose something of value because of the imminent changes and as a result focus on their own interests and not the organisations. This in turn results in political behaviour which can be overt or implicit.
3.1.3 Reasons for resistance to change: Organisational level Robbins et al (2009) highlight some of the reasons organisations resist change as the following:
This refers to the structures and processes in place that produces stability in an organization. This can be an organisations selection and training techniques, job descriptions and procedures for operations. When confronted with change “this structural inertia acts as a counterbalance to sustain stability” (Robbins et al, 2009: 486).
Limited focus of change
Organisations are made up of interdependent subsystems and any changes in one part of the system will impact the greater system. Therefore any changes in an organisation that are only focused on one area without recognizing the impact of other areas will experience resistance to change. For example implementing a new technology without considering the training requirements and procedures that also need to change will likely experience resistance to change (Robbins et al, 2009).
This refers to the group norms and perceptions that exist that direct the behaviours of individuals and that can impact decisions for change by individuals (Robbins et al, 2009).
Threat to expertise
Some organisational changes will have an impact on the expertise of specialised groups. Implementing a new way of working may mean that a specialist group of experts are now redundant to everyday operations (Robbins et al, 2009).
Threat to established power relationships
Any threat to existing power relationships can have an impact on change efforts. Introducing participative decision making for example is threatening to supervisors and middle manager power roles (Robbins et al, 2009).
Threat to established resource allocation
Some departments in an organisation may be threatened by changes if they perceive the change as a threat to their current or future resource allocation (Robbins et al, 2009).
3.1.4 How can Nissan S.A. manage resistance to change
Some of the ways that Nissan S.A. can manage individual and organisational resistance to change include the following:
Education and Communication
Organisations need to constantly educate and communicate to employees throughout the change process as well as after, providing support and encouraging positive attitudes and commitment (Ngirande & Nel, 2012). Nissan S.A. should communicate the future of the organisation, clarify the new roles of employees, and be transparent about the reasons for change. Constant communication will build security, trust and commitment as well as reduce resistance to change (Aucamp, 2001; Luthans, 2011; Ndlovu & Parumasur 2005; Robbins et al, 2009).
According to Oxtoby et al (2002), all employees should have a sense of ownership over the changes that are being implemented in their organisation. Creating a higher level of involvement and participation from employees will create commitment from employees. Nissan S.A. need to value the importance of people and their influence in the changes that are desired. Involving employees at all levels can deliver better commitment to the workforce rejuvenation plan. Creating opportunities for all employees to be involved in some way of the decision making process for change can have a positive impact on the morale of employees (Robbins et al, 2009).
Building support and commitment
The use of change agents at Nissan S.A. during the change process is a way in which to reduce the resistance of the fear of the unknown and provide direction and support to employees. Change agents can also assist those that are resisting change by convincing them of the benefits of the changes, improving perceptions and commitment to change. For example, Nissan S.A. could provide counselling sessions, increased management visibility and one on one sessions, providing skills training, etc. (Robbins et al, 2009).
Choosing people who accept change
Nissan S.A. need to recognise those that adapt to the new changes best and use these individuals as change agents. Change agents can assist in creating a positive attitude of the change process. It is also important that the new employees that Nissan S.A. hires have the same capability as the change agents in that they are open and able to adjust easily to change (Robbins et al, 2009).
Implementing change fairly
For Nissan S.A. this means due diligence in the procedures for change ensuring fairness and consistency across the change process. For example, if the aged employee given the training can improve his capability and performance then is it necessary for him to be retrenched and replaced with a younger employee? Should this aged employee not be given the chance to prove him or herself? Nissan S.A. should ensure the criteria for retrenchment are also fair. The changes that Nissan S.A. propose should be made from top management down to employees on the line to ensure consistency.
Manipulation and Co-optation
Both manipulation and co-optation are sneaky tactics but can be useful to gain support (Robbins et al, 2009). Nissan S.A. may use co-optation as a method to gain buy-in from NUMSA or may distort the information about the severance packages offered to make the benefits seem higher than the costs to the targeted employees.
Threats, poor performance reviews, or any other form of sanctions and legitimization tactics can be used to resist change. The strength of the LMX (leader-member exchange) relationship may have the desired or negative impact on the reaction of employees to such efforts. Research shows that a low-quality LMX relationship results in greater resistance to change whereas those employees with high quality LMX relationships may attribute the sanctions to situational factors and reduce resistance (Furst & Cable, 2008). Nissan S.A. need to identify which relationships require specific tactics. The use of change agents are a more useful way to reduce resistance than coercion however if the desired results are not achieved then threatening with forced retrenchment may be necessary to gain more responses.
This discussion has shown how change should be managed to move an organisation from its current state to its future desired state. In order to facilitate the change process successfully there is a need for the use of a model or process. Resistance to change can occur at both the individual as well as the organisational level. It is important throughout the change process that resistance to change is managed appropriately. According to Luthans (2011), changes to an organisations culture needs to occur for change to become permanent. Organisations should strive to become learning organisations where learning and change is central to business culture and processes (Burnes, 2004; Luthans, 2011).
Some of the ways in which organisations can achieve this is through assessing the current organisation culture, setting realistic goals, hiring the right people to facilitate change, ensuring consistency in change management, removing the old culture, managing the resistance to change effectively, keeping the momentum of change and to be persistent (Luthans, 2011). For Nissan S.A. these guidelines could be very useful in developing a learning organisation to ensure that they do not find themselves in this similar position in the future.
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6 SELF ASSESSMENT QUESTIONS
6.1 I logically and systematically applied the resources to explain and give support to my understanding of the content and central concepts and provided examples where necessary. I understood best the sections on survivor syndrome. I am not confident in my application of the frustration model. I think I have covered Kotter’s 8 step plan best and need to improve on my understanding of managing resistance to change.
6.2 I found Robbins et al (2009) most useful as it provided an overall understanding of change management process and included all aspects that needed to be convered in this assignment.
6.3 I used information on change management from articles and research done in South African industries to use as examples in illustrating my answer as well as to help me further understand some of the models of change
6.4 3 months (March – May) approximately 1 hour each day. This includes reading the material, researching additional resources, planning, writing and checking.
6.5 The material covered is relevant to South African work environment where change is common in industry. Having an understanding of this will assist in helping organisations improve business processes and at the same time improve individual well being. The resources also provided proactive and positive ways to deal with change.
6.6 Areas of knowledge: Referencing Techniques, Motivation Theory; Skills: Planning, Problem Solving; Other Qualities: Diligence, Perseverance, Critical Thinking.
6.7 Yes. Having an understanding of the ways in which change can be managed can help with improving how I manage and interpret change as an individual as well as I see some beneficial aspects that my current employer can use to manage change. I would like to further develop my knowledge gained on the learning organisation as it has never occurred to me, until now, as a priority to be dealt with in the change process in order for future business success.
6.8 The assessment criteria provide a good framework to answer the questions, clear guidelines; it gives one the opportunity to reflect on the overall concepts and to assess the quality of work presented.
6.9 I would like to improve my understanding of the different models of change apart from Lewin and Kotter. I would like to do more reading on action research etc and see how I can apply this knowledge better. I will by reading more and improve my referencing techniques which I feel I will gain with more practice.