Change Management. A Crucial Aspect for Understanding and Measuring Organizational Performance

Abstract

An organization today regardless of its size is faced with the challenge of adaptability with the external and internal environment. Changes in an organization may sometimes be beneficial or have adverse affects on the growth in terms of profits and losses. In today ’ s volatile business environment, one of the key aspects is measuring the performance of the organizations resources inclusive of human and monetary elements. Global transformation, competitive markets and demanding customers are the key indicators of how the organization is performing in the market. Because of the rise in the competition level companies are forced to adopt strategies that involve retrenchment, trading stocks and even considering mergers and acquisitions to improve performance. Managing change can only be effective if the strategists at the top level consider analyzing the market situation before implementing changes.

Key Words: change, organizations, management, performance, environment, competition, strategies.

Introduction

Organizations enforce the process of change management as a part of business necessity. For an organization to be successful in the midst of a highly-competitive market and demanding customers it is imperative for the organization to regularly, if not constantly evaluate the need for initiating changes. Organizational management is often faced with the dilemma of how change is beneficial for the organization. The realization for bringing about changes organization wide conflicts with the approach of managers who dictate the policies and guidelines. The level of conflict often acts as a reactive aspect of change rather than a proactive approach to change management. On the other hand, introducing change can help the entire workforce to accept the new priorities. Organizational changes can be considered as a motivational factor to the employees, which in turn can also enhance the level of commitment to the organization. Looking at the perspective of the management and the employees, what the organization does is done for the best interest of the organization.

Change Management

Introducing systems for change management can influence the workforce to become more participative and have the opportunity to gain more knowledge. Effective management should be considered as an integrated part of the larger workforce and the management focus should be more concerned with driving the changes organization wide in all areas and also focus on improving performance to get the best business results.

When an organization or a company begins its operations, it creates a set of clear goals and objectives based on the mission and the vision. The platforms for achieving the main objectives are structured in accordance with the external and internal factors that may be influencing the business. However, to remain on top and have a competitive edge, organizations devise strategic plans which can only be executed over the course of time with constant alterations and revisions being made in the dynamic working environment.

Change can take place at any level in the organization from top to the bottom level. Yet, the changes that are noticed may not be as uniformly spread as everyone would like it to be. According to Balogun and Hope Hailey (2008), organizational change can take place at any time and remain competitive, yet bringing about some rare outcomes which may not have been expected. Apparently, implementing successful change programs can be very difficult as the success rates tend to be very low. Successful management change is crucial to any organization to survive the competitive business environment. Moran and Brightman(2001:11) implied that “ the process of continually renewing an organization ’ s direction and structure, and capabilities to serve the ever-changing needs of external and internal customers. ” Organizational change is often considered as a part of the strategic decision making of the organization. In order to survive in the competitive environment, the management needs to adapt to the external and internal environment. The pace of change management can be rapid or at a slow pace depending on what the reality is. Change is triggered by certain factors irrespective of internal or external competition. Relatively, the suggested frameworks by (Barnes, 2004 and Kotter, 1996) pointed out that they can come in all shapes and sizes, in different times.

“The early approaches and theories to organizational change management suggested that organizations could not be effective or improve performance if they were constantly changing ” (Rieley and Clarkson, 2001).

Table 1 below identifies the different types of changes and the occurrence of discontinuous and incremental changes.

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(Source: By, 2005): http://www.academia.edu/187718/Organisational_Change_Management_A_Critical_review

According to Grundy (1993:26) shifts in strategy, structure or even culture can cause discontinuous change. Rapid and discontinuous change is usually triggered by major internal and external shocks which are the main cause of changes in the organizations (Senior, 2002). According to Luecke, (2003)

“ discontinuous change is a onetime event that takes place through large widely spread initiatives, which are followed up by long periods of consolidation and stillness and describes it as ‘ single, abrupt shift from the past. ” (Luecke, 2003:102). Change as described may not always have a continuous trend and therefore causing problems to persist over a long period of time. It is the responsibility of the management to devise a contingency plan to be used in difficult situations.

Burnes (2004) and Grundy (1993) referred to change as being incremental when it takes place at different times in different levels within the organization with one objective at a time. This type of change is very rare in the current business environment, where in most circumstances the environment tends to be most volatile.

Models and Frameworks for Change Management

The rapidly changing business environment gave opportunities for the development of models with a different perspective to change management; interrelated with the emergence of new theories. Each of the theories and models provides an opportunity to critically evaluate the business environment as well as change the perspective of the environment. Some of the most commonly understood crucial factors include the external and internal influences of an organization.

The study of change management first started as a subject of interest almost 50 years ago. The revolution of the planned approach to the concept of change management took place at different levels and areas in an organization. In the event of the bringing about changes in the organization, the pertinent factors of change management evolved with the concept of related issues from leadership to the changes in organizational culture. In light of the concepts of change management, different theories and frameworks have been developed which comprise of different school of thoughts from different authors, who have related the factorial changes and designed models for understanding in simple manners.

The first model is the three step model developed by Lewin in 1951. In developing the model Lewin realized that the behavioural approach and performance of the employees have significant effect on achieving the goals of the organizations.

Lewin (1951) argued that there are three steps involved for a successful organizational change to take place. These steps involve the stages of unfreezing, moving and refreezing. Each of these steps and the process flow is described in Figure 1. In order to bring in something new the old has to be discarded. The three step framework provides a general understanding of the organizational changes.

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figure 1.Lewis's three-step change model

(Source: Lunenburg, 2010): http://www.nationalforum.com/Electronic%20Journal%20Volumes/Lunenburg,%20 Fred%20C%20Approaches%20to%20Managing%20Organizational%20Change%20IJSAID%20v12%20n1%20 2010.pdf

Unfreezing State: This stage can be a ccomplished by introducing new information that points out the deficiencies and the inadequacies at the current state. Demographic shifts in population, high employee turnover maybe some of the causes of the changes. To critically evaluate the current situation financial data can be analyzed along with other surveys. Evaluation of the data can be helpful in coming up with solutions in order to alleviate the problems.

Moving State: The next step is to formulate new values, strategies and attitudes through internalization. Changes in the structure of the organization, more levels in the hierarchy, recruitment and selection process of the organization; are components of internal changes which are not static, but changes frequently according to the organizations needs.

Refreezing State: This is the final step in the change process involve stabilizing the changes. After the stabilization of the changes proper execution will involve a much better growth for the organization as a whole.

With the development of the three step change process by Lewin(1951), Kotter ( 1996)designed another eight step model as represented in Table 2 below, which also discussed the change management process. An idea about the process of change management is to be discussed as part of the context that change is crucial for any organizational development to take place. Change can be a difficult process as the people who are engaged in making the changes are at times faced with the dilemma that there may be some negative impacts which need to be tackled.

Kotter (1996) identified and listed the common errors that managers tend to make when they are intending to initiate changes. Failure to effectively communicate the intentions may reflect on short term ambitions of reaching the goals. The first four steps in Kotter’s model describe the unfreezing state of Lewin’s model, with stage five to seven discussing the moving stages. The eighth step in the model reflects the refreezing stage as mentioned in Lewin’s model.

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Table 2: Kotter’s Eight-Step Change Implementation Model.

Michael Fullan (2011) in his view about organizational change and why it is crucial brought about a different perspective of change management. In his model he has identified some themes which are expected to be essential parts of change in an organization.

The themes that have been discussed not only include the process of learning for the organization as a whole but also the social issues which govern the process of change. When an organization expects to bring about changes, both the external and internal environmental context needs to be critically analyzed and evaluated. The set of themes have been contemplated together for a better understanding.

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