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Managing Organizational Change Introduction In todays dynamic world, many commercial and social institutions undergo the process of restructuring, in order to be able to address the socio-political and business challenges. As practice shows, such restructuring often comes at price of loosing employees, closing down organizational branches and redesigning operational strategies. According to Carter Mcnamara's article Organizational Change and Development: Significant organizational change occurs, for example, when an organization changes its overall strategy for success, adds or removes a major section or practice, and / or wants to change the very nature by which it operates (McNamara). Therefore, organizational restructuring can be thought of as objective factor in the realm of economy. The purpose of organizational change is to provide preconditions for institutions effective functioning at the time when it faces economic, financial or social challenges. Forces of Change Let us analyze the most important factors of change, so that it will make it easier for us to come up with the recommendations of what are the best ways to make structural transition, within organization, as smooth as possible. 1.
Economic in Global world, many classical principles of economics become obsolete. This results in situation when many companies are faced with the option of whether to sell their production lines or to change the very principles of their operation. For example, it is much more profitable for manufacturers to assemble the final product in Third World countries. When Company decides to relocate its production lines, this inevitably results in Companys restructuring. The economic source of change can also be related to certain products or services becoming superfluous. When this occurs, organization needs to shift the production accents, so that they will meet the popular demand.
In its turn, this often involves the elimination of organizations subdivisions. In his article Creating and Managing Organizational Change Tom Koulopoulos gives us example of car manufactures being forced to redesign production conveyors, every time they launch a new model. Public institutions also adjust their functioning, in order to make it more cost effective. It usually consists in consolidation or elimination of whole departments.
The main task of economic restructuring is to maintain or to increase organizations effectiveness, while reducing its size. Nowadays, many economists talk about economic factor of organizational change as being closely linked to various social aspects such restructuring. This point of view is valid; nevertheless, it is important to keep in mind that economic source of organizational change is affected by various circumstances of fiscal realities more than by anything else. Therefore, considerations that are not directly related to the increase of operational effectiveness, when it comes to restructuring, must be thought of as having secondary status. 2. Technological the rapid pace of technological development renders many industries obsolete.
It is especially noticeable in the field of informational exchange. Many political observers suggest that by year 2050 newspaper industry will cease to exist, in traditional sense of this word. This is because all necessary information will be easily accessible off the Internet. Many traditional jobs that are based on the principle of physical labor will no longer require human workers. In 1997 FedEx had introduced a new computerized system of parcel tracking.
It resulted in reorganization of FedEx tracking department by downsizing it to include only five workers, while prior to 1997 this department consisted of twenty-five employees. Nevertheless, FedEx tracking effectiveness was significantly increased through implementation of new technology. This example shows us that technology play ever-increasing role in domain of economy. It is managers foremost task to keep up with technological progress, because this is one of the most important pre-conditions of maintaining organizations efficiency.
Organizational change, which comes as the result of implementing new technology, often poses many challenges to employees. This is because it requires an additional effort, on their part, to feel comfortable in dynamic working environment. To make it easier for the workers to adapt to technological restructuring, many organizations offer additional courses that are meant to help employees to add to their professional value. It is only when employees feel that they will be able to cope with the pace of technology that the organizational restructuring can bring an immediate results. 3.
Environmental this force of organizational change is becoming just as important as previous two. In her article Between a Rock and a Hard Place: Organizational Change and Performance Under Conditions of Fundamental Environmental Transformation Heather Haveman suggests that restructuring, prompted by the fluctuation of environmental variables, is a subject of interrelation between both inertia and information: Ecological theorists argue that when an organization changes its core, it sets back the liability-of-newness clock When an organization undertakes nontrivial change, it must learn new patterns of communication to facilitate the flow of different information, it must integrate new members and learn new work routines in order to fill new job functions and manage the altered flow of work, and it must forge new relations with suppliers and clients (Haveman). Environmental force of change is the complex of all. While influencing organizational functioning, it also affects its own dynamic. Organization is open system, which transform the incoming information into the goods and services, while producing entropy.
During this process, the elements of system become affected by environmental variables, which influence organizations efficiency. Therefore, we cannot think of environmental force of change as single factor, as in case of economical or technological forces. Nevertheless, it does not mean that the effects of this force can be ignored, when we manage organizational restructuring. Why People Resist Change The most important reasons why people resist change are of psychological nature. In his article, Managing Organizational Change Michael W. Durant makes a good point: During the change process, there are common predictable stressors, but how we react to those stressors will differ for each person since we are all unique individuals.
The anxiety and confusion that result from not knowing what lies ahead can create stress. People will utilize basic defenses when there is a high degree of uncertainty. In this sate of ambiguity, people can easily resort to distrust, withdrawal and self-protection. People are told that the old ways are no longer working and often this message becomes personalized that they are not valued (Durant).
Important is to understand that the fear of changes sits deep in peoples sub consciousness. Many people justify this fear by suggesting that change usually increase the level of uncertainty. This points out at inner insecurity of such individuals, because they feel that circumstances define their lives, while it should be other way around. Psychologically healthy person never resist changes, because he feels that everything remains under his control, regardless of circumstances. Nevertheless, not many people are perfect. Let us define the most fundamental reasons, for them to resist change.
Even though that many organizations now promote team spirit, the majority employees still think of their own egoistic interests as the priority. Of course, they would never admit this, while explaining the reasons for their skepticism towards restructuring. Usually they explain their lack of enthusiasm by their care for others. Arlyne Diamond in her article Managing Organizational Change adopts a Liberal approach to explain the inner motivations for peoples fear of change: We all react to change with a certain amount of anxiety. If the possibility exists that our job will be lost, that anxiety grows to full fledged fear, which, if left untreated causes personal and professional damage, not only to the person experiencing the fear, but often to all those around him or her (Diamond).
To put it in simple language people are afraid to lose their jobs. In part, this is because they feel their own professional inadequacy. Many employees have low tolerance towards new ideas. It prevents them from opening their minds to change. Usually such people are not overburdened with intelligence and their unwillingness to adapt to the new circumstances is the most difficult to deal with.
At the same time, such people are also the ones that can be easily replaced with new employees, without organization loosing much of its operating efficiency. Reducing Resistance to Change There are a several ways to decrease resistance to change, within organization. One of the most important of them is through education and communication. People need to feel that they are not being left behind the preparatory stage of such change. They must be constantly educated on the subject, where the emphasis would have to be put on how employees are going to be able to benefit from restructuring. Michael W.
Durant comes up with recommendation of how to insure the effectiveness of communicational process: Communicate only the facts. Not communicating to employees when implementing change programs is the worst mistake a company can make. During times of uncertainty communication voids are filled with rumors. Communication lowers stress and anxiety. When restructuring jobs or refocusing the organizations direction, it is very important to clarify roles and how they support each other (Durant). Employees need to feel that they actively participate in the process of change.
This will empower them in their own eyes and bring the element of psychological comfort into the ordeal. It is important to understand that term employees participation cannot be taken literally. What is needed is formation of an illusion, on the part of employees, that their opinions really do affect the process of change. Facilitation and support is another way to help employees through the transitional period.
However, it is doubtful whether managers are going to be able to come up with efficient way to support employees, unless they hold a degree in psychology. Facilitation and support, as method to overcome employees fear of change, is based on peoples ability to accept unavoidable, after they get to realize that there are no alternatives. People like to be spiritually comforted. Nevertheless, it is very hard to imagine that facilitation and support can be other then of purely psychological nature. Negotiation and agreement, as the mean to help people to adapt to a change, is best applied in organization with high degree of individual freedom, on part of employees. We talk about organizations, where workers creativity is a crucial factor that insures organizations effectiveness.
The best example of such organizations are software designing companies, where it is necessary for the employees to have gatherings, every once in a while, in order to agree on companys commercial and social policies. In this case, the members of organization would have to be given a real chance for their suggestions to be considered, before restructuring takes place. However, when we talk about organization that practices authoritarian style of management, negotiation and agreement will result in negative consequences, when applied. This is because people that are used to obey will never be able to believe in their own ability to affect things, even though that they might play along with managers, by pretending that the organizational restructuring is really welcomed, on their part. Alternative Interventions In theory, managers should be capable to improve organizations efficiency by altering social dynamics within its body.
For example, married employees will react differently to the same set of circumstances than single ones. If we want to make such employees to act in a certain way, we will need to find appropriate incentives, to be used in this particular case. However, in order to make other category of employees to act in similar way, we would have to use different set of incentives. During the process of restructuring it is crucial for managers to keep the social dynamics, within organization, under firm control. This can only be accomplished by exercising an executive authority. Arlyne Diamond vision of effective intervention involves isolating employees who sabotage change: Occasionally someone who is actively fighting the change and offering destructive input to fellow workers will have to be separated from the process.
If left alone, some resisters could significantly hamper the acceptance of change by others (Diamond). As practice shows, the process of organizational transition needs to be constantly corrected by managerial interventions to maintain order, during the period of tribulation. Structural Change Organizational change often involves structural reorganizing. For example, when public company consolidates its stock, it often changes its name and the field of its operation. When structural change occurs, many employees are required to take additional courses, in order to be able to keep the job. At the same time, structural change enables employees to improve their professional value, for as long as they are not afraid of new challenges.
In order to insure the effectiveness of structural change, managers need to have a clear vision of what are the goals of such restructuring. Behavioral Change Behavioral change is usually thought of in the context of team building. Organizational restructuring can be accomplished at much lower cost, when employees think of themselves as being part of a team. This is because people feel that they are not left alone with their anxieties, related to organizational change. There are many different methods of boosting team spirit; however, they will not have effect, unless coworkers share the same rights and responsibilities.
It is crucial for managers, who strive to establish team spirit within organization, to insure that employees professional level is more of less compatible. Implementing and Evaluating Change As practice shows, implementing organizational change is always a challenge, because managers need to consider every possible consequence of their actions. Organization is a system, which is defined not just by the number of elements, within its body, but also by the quality of connections that link these elements together. The best way to insure that implementing change is going to be successful is to provide necessary preconditions for the elements of system to act in predictable way, after such change takes place. Evaluation of change is done by comparing the effectiveness of organization before and after the organizational restructuring takes place. Guidelines for Managing Change Every particular case of organizational change requires its own guidelines.
Nevertheless, there are some common principles, upon which these guidelines must be based: 1) Organizational change can only serve one purpose enhancing organizations effectiveness. 2) The process of restructuring must to be as short as possible. 3) Organizational change must be complex. Bibliography: Diamond, A. Managing Organizational Change. 2006. Info Bay Area Com. Retrieved February 15, 2007 from web Durant, M. Managing Organizational Change. 2000.
Credit Research Foundation Online. Retrieved February 15, 2007 from web Haveman, H. Between a Rock and a Hard Place: Organizational Change and Performance under Conditions of Fundamental Environmental Transformation. March 1992. Find Articles. Com.
Retrieved February 15, 2007 from web Heller, R. Better Business: Survival of the Fittest. 2004. Thinking Managers. Com. Retrieved February 15, 2007 from web Koulopoulos, T. Creating and Managing Organizational Change. 2007.
Perot Systems Com. Retrieved February 15, 2007 from web McNamara, C. Organizational Change and Development. 2006. Free Management Library. Retrieved February 15, 2007 from web Mitchell, R. Strategy Formulation. 2000.
Economy and People. Retrieved February 15, 2007 from http: // 64. 233. 167. 104 /search? q = cache: ihEEDTpDAm 4 J: web Shook, D. FedEx Keeps Delivering. April 26, 2002. Business Week Online.
Retrieved February 15, 2007 from web
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