Organizational Change (OC)

Assignment 1: Reflecting on the increasing uncertainty in the business environment, how can organizations plan for change?

Introduction

In the modern economic environment, change is inescapable. It is ubiquitous in all big and small organizations. The globalization phenomenon coupled with the uncertainty of the global economic status means that businesses and organizations throughout the world will be a force to make changes to their business strategies and business models at one point in their existence. In today’s economy, such changes occur more often than not. These changes are also happening continuously throughout the life of a business. When these changes occur, they happen rapidly through the business and sometimes with no warning or foresight from the affected parties. Since the change has become a normal trend in companies, the employees or members of staff that resist it can have serious ramifications on the status and health of the organization.

Major changes are inevitably met with an equal force of resistance. Individuals within an organization often rush to ensure the status quo is retained. This is especially the case when they feel that the proposed changes might threaten their status or security in the firm. According to Folger & Skarlicki (1999), organizational change or proposed organizational change can trigger resistance and skepticism from the employee making it near impossible to implement such planned changes or organizational movements.

If managers or leaders of the business do not have a deep understanding and acceptance of resistance and work with and around it, it might have catastrophic results. In this case, the firm might be unable to implement even the most well-conceived and well-intentioned changes plans. According to Coetsee (1999), the success of organizational change depends on the manager’s understanding of resistance. The leader needs to have a deep understanding of how to work with or around it to achieve the targeted goals. Here, the manager needs to understand the reasons and fears that cause such resistance. As a result, the manager can create an environment that will foster acceptance and positive reception of these changes and thus reduce or eliminate any resistance to these plans for organizational change(s).

Causes of Resistance to Change

To understand the impact of resistance on the process of organizational change, there is a need to understand the causes of such resistance in the first place. This will create a picture of the dynamics and machinations among the employees that lead them to resist change and some of them fiercely.

1. Parochial Self-Interest
   

A majority of the individuals are comfortable with the status quo. The employees have bills to pay, they feel their current jobs, and positions offer them safety and comfort in their lives. They meet all their targets and thus would not want that to change, especially if it is going to have adverse effects on their lives such as financial downward revisions or even being laid off. This is one of the primary reasons that the employees resist change.

An organization can implement can carry out changes to the technology, strategy, employees and the structure. Structural changes involve the reshaping of the organizational chart. This might involve the dismissing, replacement, reallocation and adding new personnel to the firm’s structure. In cases where the company plans to make such structural changes, the employees harbor fears that they might lose their current positions in the organization.

2. Lack of Trust and Misunderstanding

The manager or the company’s leadership needs to explain the reasons behind the changes about to be implemented. The employees need to understand how these changes are necessary and how each of them will be affected by these changes. This means the firm needs to convince the employees through explanations and arguments for the proposed organizational changes. In such a case, the employees are likely to support such changes or, at least, reduce the resistance to such plans. Often, the firm does not offer such detailed explanations or rationalization of these changes. The employees are left to make their conclusions on the issues, and often they resist such changes. The employees feel that these changes might cost them more than they will gain. In such cases, they opt to resist these changes. This often occurs in cases where there is no trust between the management and the employee. There are no open two-way channels of communication between the employees and the managers of the firm.

3. Exclusion

Resistance can result from the exclusion of the employees in the decision-making. In today’s economic environment, businesses are involving employees I the decision-making process. Here, the employees make an input to the changes that need to be carried out. The employees are part of the firm, and they support necessary changes to ensure the firm stays on the market and stands a chance of being successful in an increasingly volatile and competitive external environment. However, in totalitarian styles of leadership, the employees are excluded from decision-making. In such cases, the changes are forced down to the employees in a top-down decision-making process. They are not prepared for such changes, and they are often implemented abruptly and rapidly. In such cases, the employees feel that they have no other choice but to resistance and make known their plight to the firm.

4. Low Tolerance to Change

Different reactions can be expected to uncertainty and change. Some people readily accept such scenarios and adapt to the changes and new dynamics. Others might have different tolerance levels to change and uncertainty since they have different abilities in comparison to others. In some cases, the managers resist organizational changes to meet the requirements of the firm.

Case Examples

KODAK

In the 1880s, KODAK invented and subsequently patented the dry-plate formula and the machine that was used to make large volumes of plates. By 1884, the company’s reputation had grown, and it had become a household name. The products of the company were user-friendly, and the company was a success. The fundamental pillars that led to the success of the company were the low-cost production, distribution internationally, and extensive advertisement and marketing. Others included the focus on customers and growth inspired by continued research. The advent of color technology continued the success story of KODAK. It led to a surge in sales as the company made entries to other product lines such as the medical imaging, cameras, and graphical arts.

However, KODAK was caught on the wrong side of change. With the advent of digital content, the business did not adapt. The company should have taken measures to ensure it did not fail like licensing the technology or brand, leverage on the distribution network, sell the business for parts or sell the print business. However, due to complacency and resistance from employees, KODAK did not make the right change decisions, and it failed.

OMV’s Acquisition of PETROM

Petron ranks as the biggest gas and oil producer in the South Eastern region of Europe. The company has a broad range of activities in different business segments such as exploration, refining, marketing as well as the gas business. The company had a leading role in these segments in the Romanian market. In 2004, December, OMV Austria acquired the company. Because of this acquisition, the company became the central operations point of the Southeast region of Europe within the OMV Group.

The company set to make a change to adapt to the new status. Some of the changes included:

• Setting up regional centers for management as well as leadership
• Establishing a new management structure
• Centralization of all its activities
• Outsourcing some of its activities
• Implementation of a new system of ERP
• Closing down all the unprofitable objectives

These changes were met with strong resistance. Some of the signs of resistance include attitudes, resignations or acceptance of early retirements, distinctions, inertia, lack of trust, wrong methods and fears. The company successfully restructured to reflect the new status and implemented its changes successfully. However, these changes could have been done better and more painlessly. Extensive consultation and involving the employees in the decision-making process could have helped the firm to come up with acceptable approaches to improving changes in the business.

The analysis of resistance to organizational change often paints a picture that reflects negative effects. However, there are aspects of resistance that can be positive and help the firm to realize positive changes and retain the core competencies of the company in the process. This is because the alienation of the employees is not a prudent move. The human resources of the business form the foundation of organizational culture, innovation, and creativity. These aspects play a prominent and crucial role in the success of the business’ success. As a result, the management of changes to the organization should preferably be carried out through approaches that mitigate or reduce the level of resistance.

Positive Resistance

Resistance can spark a meaningful and well-intended debate, disagreements and criticism of the planned changes or the methods of achieving the goals that such changes are intended to achieve. Such discourse is aimed to produce improved understanding to the organizational change substance and process. The resistance can also lead to the analysis of alternative options to the planned changes. According to Jager (2001), opposing anyone who disagrees or questions the need for change is a wrong approach to dealing with resistance. Often, these employees have legitimate issues they need to be addressed. Of course, all their needs will not be addressed or resolved, especially the parochial self-interest issues. However, there are chances that the employees have alternative suggestions for achieving the objectives of the firm and implementing the changes in a friendly manner to the firm and in a way that will not cause a massive upheaval in the firm structure and culture as well.

According to Piderit (2000), the organization’s managers might consider some of the employees’ stances as disrespectful ad insubordination or unfounded resistance. However, such resistance could be founded on the ethical principles of the individual employees whose intentions are to ensure the survival and success of the business. Such resistance might force employees to reevaluate their position on the planned changes. As a result, it is prudent to engage the resisting employees and ensure the company understands their position and the reasons informing their position on the matter. Such an engagement can lead to a consensus between the firm and the employees on a way forward with little or no acrimony.

Management of the Transition Period

The process of change is the most eventful in an organization’s change process. This is the most resisted process. Here, the employees get the effects of such a move to implement changes to the firm. The employees that are to be re-assigned receive their new tasks and job descriptions, those that lose their jobs are also given their marching orders and details of their early retirements if that is the case. Bridges (1991) states that the issues that cause the most worry among the employees are not the actual change but the transition that needs to be carried out to accommodate the changes. As a result, the employees resist the transition most.

According to Morgan (1997), there is a need for the managers to obtain a deep understanding of the transitional phenomenon. This will provide a good insight into the dynamics of organizational change. They will also understand such changes might meet resistance. Such an understanding will provide the managers with the know-how to stop, avoid, and manage resistance.

Conclusion

The management of resistance change is crucial to the successful implementation of the required changes to the organization. The causes of resistance to change are from the internal and external environment of the business. The firm and the employees need to have an understanding of issues as serious as change. Here, the firm needs to involve the employees in the decision-making process and listen to their grievances before forging ahead to implement such changes.

Bibliography

Morgan, G. (1997). Images of Organization Thousand Oaks, CA: Sage Publications, Inc.

Piderit, S.K. (2000, Oct). Rethinking resistance and recognizing ambivalence: a multidimensional view of attitudes toward an organizational change. Academy of Management -794. A, 783

Bridges, W. (1991). Managing transitions: making the most of the change. Reading, MA: Wesley Publishing Company.

Coetsee, L. (Summer, 1999). From resistance to commitment. Public Administration Quarterly, 204-222.

de Jager, P. (2001, May/Jun). Resistance to change: a new view of an old problem. The Futurist, 24-27.

Folger, R. & Skarlicki, D. (1999). Unfairness and resistance to change: hardship as mistreatment, Journal of Organizational Change Management, 35-50.