Organisational change - Free Essay Example

2. Literature Review The previous chapter provided background information on the area of research that lead to the problem argument and research question. This section presents a summary of the key research findings that have been discovered in the literature relating to change management in association with the change agent. Essentially, this chapter will review previously published literature studies with respect to the research investigation. Finally, a conceptual framework, based on theory is illustrated. 2.1 Change is always with us Hussey (2000) speaks of change as being one of the most crucial facets of successful management. Change is becoming increasingly common due to the chaotic and rather unstable business environment in which the majority of organisations operate. Furthermore the nature of change may be gradually more complex and thus is it often more widespread. Hussey (2000) also argues that most of the change situations that a manager may be engaged in are cumulative rather than fundamental. Fundamentally, firms are bound to embark on intricate changes with progressive pace, efficiency and success, so as to retain a competitive edge in the long term (Lilie, 2002). An array of diverse management theories have been developed over the last couple of years in an attempt to meet the challenges presented by such expeditiously shifting change in the business scenario. Whether it is reengineering, total quality management, reorganisation or an alternative reformation programme, the intention is to instigate o r encourage the necessary change processes in the organisation (Pfeifer and Bisenius, 2002). Several authors on leadership and change share the same opinion with Burns (1979) that the primary mission of leaders is to effectuate change and change necessitates proper leadership. Presumably the two most demanding challenges confronted by organisations nowadays are leadership and change: recruiting, retaining and, most decisively, developing managers as well as effectively managing change within organisations (Kanter, 1997; Mullins, 2002; Peters, 1997). 2.2 The nature of organisational change According to Balogun et al. (1999), organisational change has three core elements as shown in Figure 2.1: the change context, the change content and the change process. The change context is the why of change. The social, economic, political and competitive environment in which the organisation operates is referred to as outer context; whereas the culture, structure and capabilities of the organisation belong to the inner context. The latter also comprises the political context. Balogun et al. (1999), further argue that the change content is the what of change, and represents the selections that need to be undertaken about an organisations product range or service. It encompasses also the markets in which it participates, how it competes, and in what way it should be structured. Lastly, the change process is the how of change, which incorporates all means to deliver change. De Wit et al. (2004) speak of the extent of change in organisations, varying from a high to low amplitude. High amplitude refers to a radical change of the newly reformed company set-up concerning the organisational culture, structural composition, procedural activities or individuals from the previous state. On the contrary, a low amplitude of change implies a reasonable transformation to the former environmental conditions through the intended plan. Burnes (2003) speaks of three distinct types of organisational change which due to their recognised value, have attained significant consideration: the noticeable technological advancement in the 1980s, the application of total quality management (TQM) over the past 20 years, and the implementation of business process re-engineering (BPR) during the last 15 years. Burnes (2000) demonstrated that successful evidence in these fields is outstanding. It is crucial when striving to undertake organisational change to comprehend the causes of failure and the guidelines for successful accomplishment. 2.2.1 Why change fails? At present, it is a commonly shared outlook that firms are changing rapidly and in a more radical fashion than in the past (Carnall, 1999; Cummings and Worley, 2001; Kanter, 1997; Kotter, 1996; Peters, 1997). The majority of critics seem to agree with Hammer and Champys (1993, p. 23) opinion that change has become both pervasive and persistent. It is normality. Yet change is brought about in many variations. As Strickland (1998) remarks, occasionally change is progressive and barely recognised, such as the introduction of new machinery or computer application, or a new person becomes a member of the company. In contrast, change may be more widespread and remarkable: an absolute re-organisation, an amalgamation or a take-over, whereby each and every individual within the organisation is somehow affected. In view of these exhaustive transformations, Burnes (2000) poses a critical question: To what degree are these change efforts fruitful? Unlike an organisations profitability or performance assessment, nobody compiles statistical information in connection with how successful industries are coping with managing change. Thus, even for highly conspicuous change programmes sustained by plenty of advice and assistance, the rate of failure is noteworthy (Burnes, 2003). As the following tables reveal, several critics have attempted to recognise the right sources of unsuccessful change transformations, whether these be faults, barriers or obstacles. Although certain issues are common between the above tables, such as insufficient vision and excessive complacency along with an apathetic attitude, a number of dissimilarities are noticeable. Remarkably, nearly all of the items illustrated in the three lists denote unsuccessful management. This is evidently revealed in Table 2.3, which unambiguously exposes poor leadership and weak management (Burnes, 2003). As Figure 2.2 illustrates, resistance to change takes place for several reasons. Some of which are attributable to individuals, whilst others concern the kind and structure of the organisation (Balogun et al., 2004; Dent et al., 1999). The amalgamation of these two sources of resistance critically hinder the change process. Thus, managers and staff are required to identify and comprehend the causes for resistance to change and its sources (Slocum et al., 2007). 2.2.2 Successful change As well as recognising and distinguishing the plausible motives of failure, a number of authors have also attempted to determine the factors or actions which need to be undertaken to attain successful change (Dawson, 1994; Hardy, 1996; Kanter et al., 1992; Rye, 2001). Burnes (2003) states that one of the most valuable books in this regard is certainly Leading Change by Kotter (1996), which delineates an eight-step guide to championing change (Table 2.4). Kotters eight steps are informative and inestimable in recognising the essential actions to accomplish successful organisational change. They also highlight the significance for change projects to be led by managers who have the predisposed managerial and personal skills in order to put them into practice (Burnes, 2003). 2.3 Strategic change Machiavelli stated that: There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new (De Wit et al., 2004, p. 163). According to Thurley et al. (1989), strategic management presents existing or future managers with structural frameworks and approaches to be able to develop and enhance their strategic views, as well as strengthen their skills and readiness to undertake strategic programmes. Ohmaes (1982, p. 91) views of strategic management provide an understandable yet straightforward definition, whereby he refers to strategic management as the investigation for enhanced performance by means of a strategy that ensures a better or stronger matching of corporate strengths to customer needs than is provided by competitors (see Figure 2.3). Pettigrew et al. (1993) emphasise the relevance of suitably associating strategic and operational transformations, derived from their comprehensive investigation of specific organisations. Pettigrew et al. (1993) further argue that strategic initiatives ought to be broken down into what they refer to as actionable items, each assigned to the responsibility of a change driver. Inevitably organisations should change with the introduction of innovative technological development, ongoing economic transformation, inconsistent demographics, revolutionising political authorities, erratic consumer preferences and vigorous competition. Subsequently further consideration is given as to where, how and in what particular direction such firms must change. (De Wit et al., 2004). For living organisations, change is an accepted fact. Essentially, they must continuously be aligned with their surrounding environmental factors, either by responding to external circumstances, or by proactively contouring the industries in which they partake. De Wit et al. (2004) remarked that while change is widely spread, not all change in organisations is naturally strategic. As a matter of fact, most change processes transpire to be the progressive operational nature. Thus, organisations continuously make fine-tuning adjustments to remain competent and efficacious, by means of enhancing established procedures, further developing projects, and relocating employees to a more suitable business environment. In contrast, strategic changes are aimed at instituting a redesigned type of alignment an innovative relationship between the core set-up of the business and the distinctive aspects of the surrounding conditions. In essence, strategic changes significantly affect the way the business operates and the overall business structure. 2.4 Types of change One prevalent and broadly recognised systematic classification of strategic change identifies forms or organisational change in relation to various dimensions. A first dimension is the magnitude of change, extending from no change necessary to major reorganisation of the firm (Fopp and Schiessl, 1999). In this perspective, Nadler (1994) distinguishes between incremental and radical change. The second dimension is the sequential order of the change. Dissimilar characteristics are noted between anticipative and responsive change processes. In the context of these two dimensions, Nadler (1994) sets out a matrix illustrating the principal types of change strategies. Tuning refers to foreseeable circumstantial improvements to enhance company efficiency. On the contrary, adaptation denotes the acclimatisation of the organisation to the unstable environment. In both cases, change is referred to as evolutionary, and is triggered in divisions of the organisation. Alternatively, orientation signifies the restructuring of the entire company through fundamental transformation. In so-called reactive design, surrounding changes are reacted to which have already occurred. Similarly Balogun et al., (1999) speaks of four key forms of change, characterised in two dimensions: the end result of change and the nature of change (see Figure 2.4). The end result concerns the degree of which change is demanded, whereas the nature of change is the chosen change approach, either all together straight away or in a gradual progressive manner. Evolution relates to transformational change employed in stages through interdependent systems. Thus, it is a deliberate thought-out and practical change initiative in which direction is carried out by managers in reaction to their expectation of the necessity for the prospective change. Revolution is rudimentary change that is developed by making use of concurrent actions on several fronts, and generally in a rather short period of time. On the other hand, adaptation is less fundamental change realised slowly by means of more progressive phases, and reconstruction is change performed to realign the manner the business functions in a more striking fashion (Balogun et al., 1999). 2.5 Preparing change 2.5.1 Instigating feeling for urgency If the requisite of change is not clearly recognised and comprehended, it will not be easy to organise a group which has sufficient authority and influence to instigate the anticipated change programme. In consequence, generating a sensation for the urgency of change is essential to acquire the necessary collaboration of all employees and managerial staff (Kotter, 1997). The major hindrance to bring about a feeling for the exigency of the current circumstances is the domineering power and complacency, which so often exists in organisations. According to Kobi (1996) the following conditions can assist to make the urgency of change blatantly evident: demonstrating the appeal of the change; challenging members of staff with understandable prospects; explaining it can be accomplished; and establishing a positive approach to the change 2.5.2 Forming leadership alliance Notwithstanding the fact that remarkable transitions are habitually associated with a unique individual who is recognised by all members of the organisation, an influential leadership merger is crucial. Such formation is a fundamental element in preparation for the progression and succeeding realisation of a change programme (Pfeifer et al., 2005). The achievement of a successful leadership coalition is underpinned by a concoction of competent managers to supervise the change process and influential leadership personalities to drive the process forward. By and large, this change team is initiated with only one or two persons, and then expands in sizeable firms to comprise between 20 and 50 individuals (Kotter, 1997). 2.5.3 Convey vision and strategy It is only when all company employees acquire a shared awareness and appreciation of their aims and direction that the actual potential of a vision is totally unleashed (Pfeifer et al., 2005). As a result, the impetus for and harmonisation of the required processes is underpinned by this mutual agreement on an enticing future leading to the envisaged changes. Thus, proper dissemination of vision along with strategy is of vital importance. Yet, studies reveal that management announcements lack certain information or are somewhat misconstrued, and in turn, the required quality of communication is overlooked (Schleiken and Winkelhoder, 1997). Pfeifer et al. (2005) further discusses that the absolute realisation of a new vision and strategy may be achieved over a number of years. Thus, a tool for monitoring and manoeuvring the change process is highly recommended during such a lengthy process. 2.5.4 Planning initial successes Effectively, first achievements considerably contribute to the enthusiasm and driving force of those individuals engaged in and affected by the transformation. Such key employees demonstrate that the selected approach represents the correct way and that it is worth moving ahead with its implementation. Nevertheless, first accomplishments are meant to be though-out in advance. Schuh (1999) states that they must be designed into the development of the change programme altogether and coordinated appropriately. First successes ought to be comprehensible and noticeable for all company staff. In other words, they must absolutely prevent criticism and rumours. Kotter (1997) explains that first successes allow the supports of the change to stop briefly for a moment and mull over and celebrate the outcomes realised to this point. Optimistic feedback boosts morale and stimulus, while such achievements neutralise sceptical and egotistical rivals. 2.6 Formulating changes Supposedly, every innovative strategy endeavours to please and fulfil customers and staff members so as to assure the long-term company prosperity. Pfeifer (2001) remarks that in order to achieve this objective, collaboration between managing personnel and staff must be planned along the following features: awareness, desire, knowledge and ability. According to Lilie (2002), 70 per cent of change transformations fail at some stage in the implementation phase caused by unpredictably emerging difficulties. Subsequently, the identification of such constraints in the implementation stage is crucial to its success. In this context, the theory of constraints (TOC) by E. Goldratt (Dettmer, 1997) is an effective tool for recognising the constraints and evaluate methods to mitigate these restrictions. Similarly, Oakland et al. (2007) declares that an all-embracing organisational change necessitates significant investments in energy, time and resources. Oaklands personal experience has demonstrated that numerous change projects do not succeed. Publicly available estimates reveal that success levels can be as low as 10 per cent. Other researchers cite an average of 30 per cent success rate (Oakland et al., 2007). Indubitably, the sustainable cooperation of many employees is fundamental to the successful implementation of noteworthy organi sational changes. In spite of this, employees are not able to contribute to a change programme if they consider themselves rather powerless and having absolutely no liberty (Doppler and Lauterburg, 2002). Pfeifer et al. (2005) concludes that the participation of individuals affected by the change permits the maximum potential to be attained in a change programme. 2.7 Context-specific change Despite of the fact that managing change is a specialised competence that can be thought and, in turn, acquired over time, it is invariably argued that there is no one best recipe to carry out change. As a result, a context-specific approach is the correct way for addressing change programmes. The design and approach of any chance process should be tweaked according to the particular environmental conditions of each particular company. (Balogun et al., 1999). Figure 2.5 illustrates the phases in the design process of a context-sensitive conceptual application. Extensive research exists describing the implementation phase of change programmes, where the ensuing explanation is far away from a model based on a logical set of technological, economic and structural eventualities. (Senge 1990; Pettigew et al., 1992). Subsequently, sufficient supporting evidence advocates that common prescriptive concepts of change transformations are inappropriate to demonstrate the multiplicity of various approaches effectively employed by companies (Dunphy and Stace, 1993). Similarly, Balogun et al. (1999) refers to the formulaic approach to change management as being a precarious route. Thus, the inestimable value gained through previous experience or knowledge must be analysed in relation to the present environment. 2.8 The role of the change agent According to Balogun et al. (1999), the change agent is the accountable individual for making the change happen in any company. In actual fact, such people are not officially labelled change agents. Various people may be appointed, formally or informally, to satisfy this specific role. Buchanan and Badham (1999, p. 610) defines the change agent as a manager who attempts to reconfigure an organisations roles, responsibilities, structures, outputs, processes, systems, technology or other resources with the intention of enhancing the organisations efficacy. Buchanan and Boddy (1992) describe the skills required for successful change agents encompass communication and negotiation competencies, team building activities, simplicity of stipulating objectives, and influencing skills to achieve commitment to the ultimate destination. Balogun et al., (1999, p. 6-7) argue that change agents ought to extend their analytical, judgemental and implementation skills. 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