Change Management

Enhance the ability to survive


Term Paper, 2006
27 Pages, Grade: 1,3

Excerpt

Table of content

Executive Summary

1. Introduction: The Necessity of Change Management

2. Drivers to Change
2.1 Environmental Change
2.2 Intra-corporate Change
2.3 Changes among Employees
2.4 Changes among Managers

3. Definition of Change Management

4. The Concept of Change Management
4.1 Implementation Process
4.2 Practical Realisation
4.2.1 Development of a Change Management Plan
4.2.2 Elements of a Change Management Plan

5. Principles and Requirements of Change Management
5.1 Targeted Management
5.2 Employee Participation
5.2.1 Employee Training
5.2.2 Teamwork
5.3 Resistance

6.Change Management in Practice

7. Critical Review
7.1 Success Factors for Change Management
7.2 Success Barriers for Change Management

8. Strengths and Weaknesses of Change Management

9. Conclusions and Outlook

Bibliography

Appendix

10. Instruments of Change Management
10.1 Overview
10.2 Selected Instruments
10.2.1 Project Management
10.2.2 Workshop

11. Cultural Change
11.1 The Action-Research-Approach (Robbins)
11.2 Corporate Change in Eight Steps (Kotter)
11.3 Architectural Change Approach (Tomasko)

Executive Summary

The drivers to change business processes are multi-faceted: On the one hand environmental and intra-corporate changes, on the other hand changes among employees and managers.

Change Management (CM) is a concept, which is implemented to the organisation from outside. The objectives of the change are often developed from external advisors (change agents) whereas the employees are involved on a limited scale with the conversion of the concept. The implementation process can take place in seven steps leading from a deeper analysis to cultivation of new behaviour. By this approach it is possible to “ingrain” the change in social standards and values. An important success factor is the development of a Change Management Plan, which covers measures and regulates, who is responsible for their conversion.

Principles and requirements consist of targeted management and participation of employees using training methods and teamwork in order to minimise the fear of employees concerning new tasks and increase thus their willingness for the change. In order to avoid resistance among the employees they should be challenged, but not overstrained by the change. In this connexion it is crucial that resistance can be expressed before decisions begin to take effect.

By applying a recent study the reasons for change projects in practice were discovered. A clear majority of the surveyed companies had the objective to restructure and reorganise their business. It was very interesting to see that the top-management plays the most important role whereas the employees, who are the most concerned participants by the realisation of the change, are almost the least important. In summary not all persons within an organisation are concerned equally by the change, equivalent important for the change and adjusted similarly to the change.

The two dominating Change Management instruments are workshops and project management. Substantial success factors regard the controlling and quantification of measurable criteria, intensive communication of aimed objectives, the definition of clear limits and time pressure. It proved in practice that change projects, which were accomplished under high time pressure, were substantially more successful as such, which had more time available. The largest success barriers can be referred to employees. Conflicts of interest between participants or lack of commitment of the executive committee are further negative influencing variables.

In many cases discrepancies in the area of the corporate culture appear, which lead to the failure of change projects. Therefore it should be not neglected to include on cultural change management. If the selected strategy cannot be carried by the prevailing culture, the company does not come around a cultural change.

The Action-Research-Approach can be seen as the basis model, in which the inclusion of the employees is recommended. Contrary is the Architectural-Change-Approach, which is expressing a more radical change.

Finally, an essential strength of Change Management is the targeted top-down approach relating to the objectives of the company. A weakness can be the employment of external change agents, because employees feel frequently patronised by external advisors. In this context it is recommended to integrate the employees more actively in order to achieve a successful progress of the change.

1. Introduction: The Necessity of Change Management

Charles Darwin’s "The survival of the fittest" describes that only the life form can survive, which is able to adapt permanently to changing environmental conditions. (Thomas, 2006) Darwin’s theory is quite transferable to the economic system, because "processes of change take place on all levels of economic life." (Reiss et al, 1997, 7) Therefore organisations must undergo a constant adjustment and change process in order to react fast and flexible to market changes and thus to survive.

This report is concerned with the role of Change Management (CM) and points at the way of a successful implementation in a business. In this connection it is important to keep in mind that each reorganisation is a singular project, which needs to be adapted to the specific situation and characteristics of the employees. In addition successful change management causes exceedingly the personal commitment of the executives, who must be also willing to change and give up old ways of procedures and thinking.

Following this introduction various drivers to change are characterised. Next a literature review with definitions to the topic of Change Management is presented. Described in chapter three is the concept of Change Management more in detail with organisation as well as applications and instruments. Here the emphasis is on the implementation process and its effect on the employees concerned by the change. Thereby the basic principles and requirements of Change Management are demonstrated. Subsequently, we take a look in the practice, whereby the meaning of Change Management is analysed on the basis of a recent study. In a next step appropriate Instruments of Change Management are represented followed by three theoretical approaches to Cultural Change. A critical review regarding strengths and weaknesses as well as an outlook will conclude this report.

2. Drivers to Change

Today we live in an ever faster changing world. Individuals must be able to adapt to new conditions consistently. Businesses see themselves suspended to an increasing change pressure. Some of the multi-faceted reasons for these changes are represented in the following.

2.1 Environmental Change

In particular the increasing dynamics within the economic and technical area, the complexity on international markets strengthened change pressure on businesses. Within many market segments cost pressure rises both by the decrease of natural resources as well as the increase of commodity prices. In addition international competitors producing with more favourable cost structures contribute significantly to a further fall in prices. (Füser, 1997)

2.2 Intra-corporate Change

Increasing speed, circulation and efficiency of modern information transfer leads to an acceleration of all business procedures. More and more companies have to find solutions for more complex and permanently changing tasks, which they need to master faster and more economically.

As a result the classical hierarchical organisation, which is for this speed too ponderous and inefficient is substituted by new organisational structures with broader hierarchy levels. (Doppler/Lauterburg, 1995)

Senior management delegates decision-making authority as well as responsibility and concentrates more on strategic tasks, as for example the co-ordination of all business processes or the creation of suitable basic conditions for successful teamwork. (Lott, 2001)

2.3 Changes among Employees

Socio-political democratisation can lead to higher self-confidence among many employees, who achieve a higher qualification due to improved training. That is why they rather question the formal dominance of their superiors. With continued specialisation employees may be put into the position to attain information projections/leads against superiors. Special conflicts can also arise from the fact that many employees possess strengthened psychological and physical stresses and strains caused by mechanisation and automation. (Olfert et al, 1999)

2.4 Changes among Managers

The functions in most businesses change, which results in different tasks for the management. Independent teams regulating everything at a lower level, shrink the significance of hierarchies and the influence of the top-management. Nevertheless process orientated companies can be managed not only through procedures, but need guidance by a qualified management.

High-level personnel cannot concentrate longer on the care and control of processes, but must play an active part in decision-making. Unorthodox thinking and the readiness for personal risk rank today among the necessary characteristics of a successful management. Often the CEO of a company is characterised as a "coach", who grants increasingly more liberty to the employees, but in addition should offer necessary situational support. The coach should promote critical thinking purposefully, and be accepted by the employees as a competent partner. (Doppler/Lauterburg, 1995)

3. Definition of Change Management

If one looks for a uniform definition of this term it appears difficult to define it clearly due to the fact that the opinions of various authors differ strongly. In the literature many different definitions appear, by which two adequate are to be introduced in the following.

(1) "Change Management means to plan, to initiate, to realise, to reflect and to stabilise (...) fundamental and far-reaching change processes. Change Management aims on a mid-term to long-term basis at effective changes of behaviour patterns and abilities in order to optimise processes and communication structures. For this an integrative approach of the reorganisation is necessary.“ (Kostka; Mönch, 2002)

(2) "Change Management is the strategy of planned and systematic change, which is achieved by the influence of the organisational structure, corporate culture and individual behaviour, under the greatest possible participation of the employees.“ (Gabler, 2006)

In summary one can say that Change Management in the broader sense is a theoretical concept, which is given to the organisation from the outside. The objectives of the change are developed from external advisors (change agents) whereas the employees are involved on a limited scale with decision-making and the conversion of the concept.

4. The Concept of Change Management

4.1 Implementation Process

The implementation of Change Management can take place in seven steps:

Abbildung in dieser Leseprobe nicht enthalten

Illustration 1: Seven Steps Change Schedule (Own Graphic) (Kostka; Mönch, 2002)

In a first step the focus is to create a consciousness for an urgent need for change by conducting a deeper analysis. Thus for example the market and competitive position are examined and associated chances as well as risks for the business are evaluated.

In a second step visions, aims and a conclusive strategy have to be developed. In this context a team is arranged, which according to Kostka and Mönch needs to possess „sufficient conviction, competence and power to design the change.“ (Kostka; Mönch, 2002)

Next the compiled visions and strategies are communicated in the company. Here the highlevel personnel must be conscious of their responsibility and exemplify the things, which are expected from their employees.

It is recommended in a further step to divide large projects into smaller subprojects. If subprojects are completed, feelings of success might develop among the employees, which positively support the further progress.

In the fifth stage it is important to align existing structures in the company to a modified business environment. The employees should participate in this reorganisation. In this case the management needs to encourage the employees to self-initiative and concrete actions.

In the next to last step the establishment of the change management stands in the foreground. This is accomplished with changed structures, appropriate training of the employees and via new projects, which keep the change process alive. To ingrain the new behaviour in social standards and values is then the last step of the implementation of the Change Management.

4.2 Practical Realisation

4.2.1 Development of a Change Management Plan

An important success factor with the Change Management is the development of measures, which initiate and support the change process. (Al-Ani/Gattermeyer, 2000) The Change Management Plan covers these measures and regulates, who is responsible for their conversion.

4.2.2 Elements of a Change Management Plan

Al-Ani and Gattermeyer differentiate between different levels, the macro and the micro level of the change process. (Al-Ani/Gattermeyer, 2000)

The tasks of the high-level personnel are located on the macro level. One of the major tasks of this management is to lead, exemplify and support the change actively. Thereby it is important that the leadership develops a clear vision and communicates this to the target groups accordingly. In order to convince the employees of the necessity for the changes, pointing out different scenarios apart from the vision itself might help. Consequently, it is possible to show an urgent call for action, by presenting the employees the occurring scenario, if the status quo is maintained.

A further task of the leadership is the controlling of the change process supported by project management techniques.

On the micro level of the Change Management Plan all those measures are summarised, which lend the ability to the employees to assume the changes and to reach identification with the new situation. (Al-Ani/Gattermeyer, 2000)

Furthermore it is very important that sufficient communication during the involvement of the employees is existent. Here it applies to specify the kind and frequency of communication as well as responsibilities for the communication measures.

Regarding the involvement of the employees Al-Ani and Gattermeyer express reservedly. Only with detailed planning and conversions as well as with obligations over agreement on objectives the authors see a possibility of their inclusion.

It is also characteristically for Change Management, that the involved parties - predominantly the employees - are included only punctually and also decisions against their will are realised. (Janes et al., 2001)

5. Principles and Requirements of Change Management

5.1 Targeted Management

For an optimal result the change process must be goal-oriented. The starting position of the organisation and the reasons, which require a change, must be represented clearly, likewise the goals of the change and the individual associated changes. It should be specified before, how the achievement of objectives is to be measured quantitatively and qualitatively. For this controlling instruments are suitable to judge the success of the change. As the most significant controlling instrument performance measurement systems proved. (Picot et al, 1999)

Additionally, the project progress should be measurable on the basis of fixed criteria and only authorised persons should receive the power for the correction of the progress. (Doppler/Lauterburg, 1995)

5.2 Employee Participation

For a successful progress of the change the employees should be integrated actively. Thus the motivation and identification of the employees with the company may increase. It is crucial that they are already included during the analysis of the starting situation, so that they understand the initial position and background. Besides the knowledge of the employees should not remain unused. Knowledge, which can be put heavily into words (tacit knowledge), can be used by a direct integration of the employees into the change process. (Doppler/Lauterburg, 1995) Beyond that the possibility should be given to employees, for example over an Intranet, to bring in their ideas spontaneously.

Without broad communication of vision and goals as well as information of the employees about the change process, it will be hard to fulfil a successful change. According to John P. Kotter „effective communication is the key to mobilizing your workforce behind a new vision." (Kotter, 1996, 52)

5.2.1 Employee Training

First of all it is to be guaranteed that the employees are able to master all assigned tasks technically. Appropriate training measures can adjust existing deficits, minimise the fear of the employees concerning new tasks and increase thus the willingness for the change.

[...]

Excerpt out of 27 pages

Details

Title
Change Management
Subtitle
Enhance the ability to survive
College
University of Hull
Grade
1,3
Author
Year
2006
Pages
27
Catalog Number
V134370
ISBN (eBook)
9783640425952
ISBN (Book)
9783640423033
File size
712 KB
Language
English
Tags
Change Management, Cultural Change, Instrumente, Projektmanagement, Workshop, Success Factors, Success Barriers, Employee Training, Environmental Change, Implementierung, Change Management Plan, Definitionen, SWOT
Quote paper
Dipl.-Kfm. (Univ.), B.A. Christian Kneer (Author), 2006, Change Management, Munich, GRIN Verlag, https://www.grin.com/document/134370

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