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Essay Exam 3

1: Explain what change is, why it is challenging for organizations, identify common changes that organizations face and describe the role of internal and external forces on organizational change

Any business in today's fast-moving environment that is looking for the pace of change to slow is likely to be

sorely disappointed. In fact, businesses should embrace change. Change is important for any organization

because, without change, businesses would likely lose their competitive edge and fail to meet the needs of what

most hope to be a growing base of loyal customers.1 Today, teams and organizations face rapid change like

never before. Globalization has increased the markets and opportunities for more growth and revenue.

However, increasingly diverse markets have a wide variety of needs and expectations that must be understood if

they are to become strong customers and collaborators. Concurrently, scrutiny of stakeholders has increased as

some executives have been convicted of illegal actions in their companies, and the compensation of executives

seems to be increasing while wages of others seems to be decreasing or leveling off. Thus, the ability to manage

change, while continuing to meet the needs of stakeholders, is a very important skill required by today's leaders

and managers. 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. It also occurs when an organization evolves through various life cycles, just like people must

successfully evolve through life cycles. For organizations to develop, they often must undergo significant change

at various points in their development. That's why the topic of organizational change and development has

become widespread in communications about business, organizations, leadership and management.2

Leaders and managers continually make efforts to accomplish successful and significant change -- it's inherent in

their jobs. Some are very good at this effort (probably more than we realize), while others continually struggle

and fail. That's often the difference between people who thrive in their roles and those that get shuttled around

from job to job, ultimately settling into a role where they're frustrated and ineffective. There are many schools

with educational programs about organizations, business, leadership and management. Unfortunately, there

still are not enough schools with programs about how to analyze organizations, identify critically important

priorities to address (such as systemic problems or exciting visions for change) and then undertake successful

and significant change to address those priorities.

Change nowadays are surrounded around some of the issues discussed below.

Technology

Without change, business leaders still would be dictating correspondence to secretaries, editing their words and

sending them back to the drawing board, wasting time for all involved. Change that results from the adoption of

1 Lin Grensing- 2010, "Employee Management for Small Business"; Pophal; 2 S. Kaplan and E. Beinhocker, ‘The real value of strategic as lived experience and strategists’ everyday efforts to planning’, MIT Sloan Management Review, Winter (2003), shape strategic direction’, Journal of Management Studies, pp. 71–76.

new technology is common in most organizations and while it can be disruptive at first, ultimately the change

tends to increase productivity and service.

Technology also has affected how we communicate. No longer do business people dial a rotary phone, get a

busy signal, and try again and again and again until they get through. No longer do business people have to

laboriously contact people, in person, to find out about other people who might be useful resources - they can

search for experts online through search engines as well as through social media sites. Today's burgeoning

communication technology represents changes that allow organizations to learn more, more quickly, than ever

before.

Customer Needs: Customers who were satisfied with conventional ovens many years ago are sometimes

impatient with the microwave today. As the world evolves, customer needs change and grow, creating new

demand for new types of products and services -- and opening up new areas of opportunity for companies to

meet those needs.

The Economy: The economy can impact organizations in both positive and negative ways and both can be

stressful. A strong economy and increasing demand for products and services will mean that companies must

consider expansion that might involve the addition of staff and new facilities. These changes offer opportunities

for staff, but also represent new challenges. A weak economy can create even more problems as companies find

themselves needing to make difficult decisions that can impact employees' salaries and benefits and even

threaten their jobs. The ability to manage both ends of the spectrum are critical for organizations that want to

maintain a strong brand and strong relationships with customers as well as employees.

Growth Opportunities: Change is important in organizations to allow employees to learn new skills, explore new

opportunities and exercise their creativity in ways that ultimately benefit the organization through new ideas

and increased commitment. Preparing employees to deal with these changes involves an analysis of the tools

and training required to help them learn new skills. Training can be provided through traditional classroom

settings or, increasingly, through online learning opportunities. Importantly, organizations need to do a good job

of evaluating employees' capabilities and then taking steps to fill the gaps between current skills and the skills

required to respond to growth.3

Challenging the Status Quo: Simply asking the question "Why?" can lead to new ideas and new innovations that

can directly impact the bottom line. Organizations benefit from change that results in new ways of looking at

customer needs, new ways of delivering customer service, new ways of strengthening customer interactions and

new products that might attract new markets. New employees joining an organization are especially valuable

because they can often point to areas of opportunity for improvement that those who have been long involved

in the company might have overlooked. But even existing employees should be encouraged to question why

3 Kotter, J. P. (1982). The general managers. New York: Free Press.

things are done a certain way and look for new ways to get work done faster, better and with higher levels of

quality and service.

Effective change management that makes all employees participate is essential in our world of turbulence and

of shorter cycles of innovation. Changes may affect every industry and every organizational function.

In every organization, management knows about the external environment and the vision of the organization.

This knowledge is the basis for developing appropriate strategies. Although challenging, this is the easier part.

Nevertheless, management will only be able to successfully implement a new strategic direction, if they manage

to gain the commitment of everyone within the organization. The point is to develop processes that enable all

employees to learn about change and that to develop a culture of dialogue between management and

workforce.4

Change management means to make change happen – to flexibly adapt the organization to ongoing external

changes.

Challenges in Managing Change

The process of change has impact on the whole organization and on all individuals working there. Change

processes influence

What the organization does

the way the organization does things

The way all business units of the organization communicate and share information.

This shows clearly the complexity and scope of change management:

Human resource management has an important role in any change process. Change always needs people: for

developing objectives, for identifying the need for change, for developing solutions and for implementing these

solutions. Technology can support and influence change, but it can never replace people.5

Another challenge of managing change is that there is no chance to ‘undo’ mistakes once they were made. If you

allocate resources in an inefficient way, you still have the option to provide additional resources in order to

achieve your objective. If you once failed to make your employees participate in the change process, you will

hardly be able to motivate them again

4 4 Lawrence, P. R., & Lorsch, J. W. (1967). New management job: The integrator. Harvard Business Review, 45 (November–December), 142–151 5 Mann, F. C. (1965). Toward an understanding of the leadership role in formal organization. In R. Dubbin, G. C. Homans, F. C. Mann, & D. C. Miller (Eds.), Leadership and productivity. San Francisco: Chandler.

Barriers in Managing Change

There are many models for systematically managing change processes. So why are there problems in

successfully implementing change?

It is a well-known insight that top management support is one of the critical success factors for any change

effort. If top management does not buy in – why should anybody else? Nevertheless, there are some more

barriers that could hinder successful change

Stereotypes in analysis: We see what we expect to see.

Difficulties to identify and to analyse the core of the problem / the real cause of the problem.

Too narrow scope of the problem: Problems are approached with a one-sided view that focuses on

particular aspects only.

Lacking ability to see all sides of the problem.

Information overload: Difficulties to distinguish between relevant data and available data.

Misjudgements: People think they take into consideration all data they can get hold on; however, they

actually do not really exploit all information that is available

Forces that drive change

An organizational change is produced by one or some forces that can be differentiated by their nature. Some

organizations are more vulnerable than others to the pressure of change, such as organizations with diffuse

objectives, uncertain support, unstable values and those that face a declining market for their products and

services. These forces can be classified into two groups depending on their origin: external and internal. Next

subsections describe some of the most relevant forces that drive organizational change.

External Forces: The external forces are those that promote change inside an organization due to

changes in its environment. Thus, they are referred to the environment where the organization is

located, and are due to elements such as other organizations that populate the same environment (and

some of them could suppose competence) or the different heterogeneous agents in the same

environment. Among external forces, the following forces can be found:

I. Obtaining resources: a failure when obtaining resources (e.g. because they are no longer

reachable from the current environment) could drive the organization to improve the way in

which resources are obtained;

II. Market forces: requirements of products and services of an organization may change through

time. Therefore, organizations that offer services or products that nobody is requiring have no

reason to exist, so they will disappear if they do not decide to change;

III. Generalization: some organizations that are unable to have enough customers by specializing

themselves in a limited range of products or services manage to survive by becoming

generalists, i.e. by offering products and services that are oriented to a more general purpose,

thus increasing their number of potential customers;

IV. Decay and deterioration: an organization can be affected by environmental changes that will

make its objectives, products, services, etc. to become obsolete or to lose their sense;

V. Technological changes: an organization can adopt new technology in order to improve its

productivity inside the market where it is operating.

VI. Competence: organizations with a similar purpose (e.g. offering similar products and services, or

looking to achieve similar goals) in the same environment turn into competence for them

VII. Laws and regulations: not only internal regulations are important for an organization. There can

be also external laws coming from the environment that could affect the behaviour of the

organization;

VIII. Globalization: globalization refers to the increasing unification of the world’s economic order

through reduction of barriers to international trade as tariffs, export fees, and import quotas

Internal Forces

The internal forces of an organization are signals produced inside an organization, indicating that a change is

necessary. Thus, it is important to clearly define these forces, in order to monitor them and to achieve the

change in the most appropriate form and moment. The internal forces are:

I. Growth: when an organization grows in either number of members or budget, it is necessary to change

its structure to a more hierarchical organization, with higher levels of bureaucratization and

differentiation among its members;

II. Power and political factors: members in highest levels of the hierarchy may have different goals than

agents in a lower hierarchical level, and can be even different from the organizational goals. The

organization may assure (e.g. by means of observers) that managers do not impose their goals above

the organizational ones;

III. Goal succession: after reaching their goals, an organization could disappear. If it wants to continue with

its existence, new goals need to be chosen;

IV. Life-cycle: some existing organizations follow the classic life-cycle model. Thus, they appear, grow,

change, and disappear, to give way to other organizations;

V. Human resources: managers of the organization must control that their agents are committed with the

organization, present an adequate behaviour and their performance is acceptable regarding

organizational goals;

VI. Decisions and managers behaviour: disputes between agents and their supervisors inside organizations

can lead to subordinates asking for new tasks and roles;

VII. Merging and acquisitions of organizations: merging of organizations, or the acquisition of one

organization by another, leads to bigger organizations where their structure and members should be

reorganized;

VIII. Crisis: if an organization is in a crisis due to a sudden drop of its efficiency, a possible solution is a deep

organizational change, modifying structural and/or functional elements, depending on its specific

needs.6

6 J. Calta, “A taxonomy of adaptive systems,” in 7th European Workshop on Multi-Agent Systems, 2009, pp. 1–13

2: Describe approaches for managing and facilitating change in organizations and explain the importance of using a model in the change process.

Rapid organizational change can improve performance, save money and increase employee morale. Now this

may seem like a stretch, to combine the ideas of performance improvement while positively impacting our

bottom-line and increasing employee morale; but these are the imperatives for organizational survival today.

It is true that never in a time, in our own history, have we ever experienced an economy such as the one we

are in today. The sense of doom and gloom can be very discouraging. But these kinds of crises - 1873, 1929,

and 2008 - don't come around too often, and they force people to think in a new way. Rather than ignore this

turn of events, today we have to ask ourselves and our organizations - what are we going to do to get

through this crisis--because it affects us in all aspects of our life?

We can no longer look to the past to help predict the future. There are many challenges ahead in ensuring

our organizations continue to survive. We have less resources and less money now than even 6 months ago.

Yet the expectations for product and service delivery are higher than ever. It is now urgent that we quickly

build or re-shape our organizational culture so that quality, in the delivery of our products and services, is

"just part of what we do." This will ensure a continued focus on organizational effectiveness, efficiency and

the meeting of all customer requirements.

There are many drivers of change but in my experience, the most important key driver for change is when

75% of the organization's leadership is honestly convinced that business as usual is no longer acceptable.

Most organizations are probably there right now. They want something that is going to deliver some positive

results through this unsettling period of transition. The Rapid Change Process is a way to achieve positive

results quickly.

To be effective, there are two things you need to know about the Rapid Change Process for accelerating

organizational change:

Understand the challenges and the opportunities that are associated with it.

Apply it as a process that is carefully managed and implemented

Challenges and Opportunities

To fully understand the challenges and opportunities for your organization, you should first consider what impact change may have on your organization, so that you are prepared for it.

While there are many dramatic results that can be realized but there are also bound to be some challenges you will face when implementing change. Anticipating and preparing for them will lead to true improvements in your organization.7

7 Plowman, D.A., Baker, L.T., Beck, T.E., Kulkarni, M., Polansky, S.T. and Travis, D.V. (2007) ‘Radical change accidentally: The emergence

and amplification of small change’, Academy of Management Journal, 50(3): 515–43.

Challenge #1: Maintaining the energy and enthusiasm of employees throughout the change journey.

Creating an environment where employees are energized and enthusiastic about building and

sustaining change is not always easy. Employees are probably feeling demoralized right now,

uncertain about their own future and therefore uncomfortable about taking on new work, looking

for improvement opportunities in their own work or handling other requirements that are part of

the "new" organization. That is why how we communicate to employees about our change strategy

is so important. We must help employees accept the need for change and energize them towards

achieving it. This will require that we provide opportunities for all employees to express their

concerns and to channel this energy into a process where they feel that they can make a meaningful

difference.

Challenge #2: Ensuring that your organization adapts to change and does not backslide into old ways

of working: Individuals and organizations alike must be resilient enough to adapt to changes

occurring in their environment in order to ensure survival. Without resilience to change, extinction

occurs. While it may be difficult to accept and confront the need to change, we must accept that

change is inevitable. Without it progress would cease.

Challenge #3: Prioritizing organizational projects and resources: Today organizations have fewer

resources and more projects going on at the same time than ever before. As a result employees are

reaching a point of saturation. To overcome this challenge the management team must identify all

projects and other initiatives currently in play throughout the organizations so that they can

immediately begin a process of project prioritization. This will present an opportunity to drop low-

value projects that are no longer helping the organization to realize its strategic imperatives.

Challenge #4: Understanding the science of quality and implementing it as an art: Not everything in

our organizations needs a Lean or Six Sigma program. Most processes will benefit if we can help

them by providing just-in-time quality tools. This is because the full Lean/Six Sigma tool box might be

overkill and take too long to implement. Part of the change mandate today is speed. The Science of

Quality Management is one's understanding of everything that is required to help a process to

improve - all of the tools and practices. Today, however, we must start thinking about the Art of

Quality Management which is fundamentally an ability to best apply the necessary quality tools so as

to make a quick, immediate and lasting impact on the process, the staff and the customers

Challenge #5: Managing the cultural shift that is needed to create and sustain organizational change:

Sometimes it seems that all we do in our organizations is change. If you have felt this, you are

correct. What we are feeling is what is actually happening. We change, then change again and then

change yet again. Change is constant. However, these changes are most often localized in our

departments and in our jobs. It is not usually organization-wide. Today, it is time to engage in a quick

but dramatic change in how the entire organization operates and how it is structured to deliver its

products and services to its customers. Such change requires a cultural shift for the entire

organization. Although not easy, it is a critical requirement for this journey and momentum must be

continued and not dropped in order to sustain the change necessary for survival.8

Change involves a sequence of organizational processes that occurs over time. Lewin (1951) suggests this

process typically requires three steps: unfreezing, moving, and refreezing.

This step usually means reducing the forces acting to keep the organization in its current condition.

Unfreezing might be accomplished by introducing new information that points out inadequacies in the

current state or by decreasing the strength of current values, attitudes, and behaviours. Crises often

stimulate unfreezing. Examples of crises are demographic shifts in population, a sudden increase in employee

turnover, a costly lawsuit, and an unexpected strike.9 Unfreezing may occur without crises as well. Climate

surveys, financial data, and enrolment projections can be used to determine problem areas in an organization

and initiate change to alleviate problems before crises erupt. Moving Once the organization is unfrozen, it

can be changed by moving. This step usually involves the development of new values, attitudes, and

behaviours through internalization, identification, or change in structure. Some changes may be minor and

involve a few members—such as changes in recruitment and selection procedures—and others may be

major, involving many participants. Examples of the latter include a new evaluation system, restructuring of

jobs and duties performed by staff, or restructuring a department or entire organization, which necessitates

relocating staff to different sites within the organization. Refreezing The final step in the change process

involves stabilizing the change at a new quasi-stationary equilibrium, which is called refreezing. Changes in

organizational culture, changes in staff norms, changes in organization policy, or modifications in

organizational structure often accomplish this.10

The stages of change are:

Precontemplation (Not yet acknowledging that there is a problem behaviour that needs to be

changed)

Contemplation (Acknowledging that there is a problem but not yet ready or sure of wanting to make

a change)

Preparation/Determination (Getting ready to change)

Action/Willpower (Changing behaviour)

Maintenance (Maintaining the behaviour change) and

Relapse (Returning to older behaviours and abandoning the new changes)

8 Toms, W.M., Kovacs, E.B. and Immordino, K.M. (2011) ‘Planned radical change in organizations: Unintended consequences on roles and continuity’, Journal of Enterprise Transformation, 1: 98–118. 9 Miles, R.H. (2010) ‘Accelerating corporate transformations (Don’t lose your nerve!)’, Harvard Business Review, 88(1/2): 68–75 10 Diefenbach, T. (2007) ‘The managerialistic ideology of organizational change management’, Journal of Organizational Change, 20(1): 126–44.

3: Describe what an organizational vision is, how its viability impacts the organization and explain the role of

vision in the organizational change process.

Identifying and communicating a clear vision is one of the most important functions a business leader can

perform. All business leaders should understand the basic elements of visioning and how to communicate a

clear vision. Creating a clear and effective vision delivers many benefits to your business. Not only does a

clear, shared vision help define the values of your company and its employees, but it also helps guide the

behaviour of all employees. A strong vision also leads to improve productivity and efficiency. With a clearly

communicated vision, your business will facilitate buy-in from its employees and create a sense of shared

vision that will enable the organization to realize the benefits associated with a strong sense of vision. Your

vision is your dream. It's what your organization believes are the ideal conditions for your community; that is,

how things would look if the issue important to you were completely, perfectly addressed.11 It might be a

world without war, or a community in which all people are treated as equals, regardless of gender or racial

background. Whatever your organization's dream is, it may be well articulated by one or more vision

statements. Vision statements are short phrases or sentences that convey your community's hopes for the

future. By developing a vision statement or statements, your organization clarifies the beliefs and governing

principles of your organization, first for yourselves, and then for the greater community. To survive, in this

age of global competition, the organizations and businesses have come to realize the need of innovative

approach and innovations in their business model and strategies. It is well evident from the recent reports

and publications that the companies form different geographical regions and countries spend a considerable

amount of money for the purpose of innovation, and the ratio of allocating the funds for innovation is

continuously increasing. For organizations who want excellence and sustainability in their business, need to

think about the managers/leaders with innovative approach in order to develop the business strategy by

turning their innovative concepts into reality. Innovation is an art of responding the market and technological

challenges and the future trends of business for organizations in most suitable way that can lead

organizations towards long term success and sustainability. It is necessary to make the products, services and

business model compatible with the potential market demands and customer needs in order to meet the

organizational goals and sustainable development.12

There are certain characteristics that most vision statements have in common. In general, vision statements

should be:

• Understood and shared by members of the community

12 E. Beinhocker and S. Kaplan, ‘Tired of strategic plan- 1972; R.S. Baron, ‘So right it’s wrong: groupthink and the Ning?’, McKinsey Quarterly, special edition on Risk and ubiquitous nature of polarized group decision making’, Resilience (2002), pp. 49–57; S. K

• Broad enough to include a diverse variety of local perspectives

• Inspiring and uplifting to everyone involved in your effort

• Easy to communicate - for example, they are generally short enough to fit on a T-shirt.

Here are some examples of vision statements that meet the above criteria:

• Caring communities

• Healthy children

• Safe streets, safe neighbourhoods

• Every house a home

• Education for all

• Peace on earth

A mission and vision are standard and critical elements of a company's organizational strategy. Most

established companies develop organizational mission statements and vision statements, which serve as

foundational guides in the establishment of company objectives. The company then develops strategic and

tactical plans for objectives.

Mission Statement Purpose

A company's mission statement is essentially its statement of purpose. It serves as a guide for all of the

company's decision-making. Shareholders, leaders and employees are generally the target of the mission. It

should help workers within the organization know what decisions and tasks best align with the mission of the

company. A mission statement offers insight into what company leader’s view as the primary purpose for

being in business. Some companies have profit-motivated missions, while others make customers a focal

point. Other firms use a mission to point out more altruistic intentions that ultimately lead to profits.

Relationship to Organizational Strategy

Strategic planning is the process of developing company objectives, strategies and tactics to achieve the

mission of the organization. The company generates short and long-term objectives using the mission

statement. Objectives may include market-share targets, revenue or profit goals, customer satisfaction scores

and improved brand awareness.13 Next, it develops strategies to accomplish objectives. For instance, better

training and monitoring of feedback scores are strategies to achieve higher customer satisfaction. Actionable

steps or tactics are then developed. Hiring an outside training.

Vision statements are sometimes confused or used synonymously with mission statements. However, vision

statements should offer more of a direction and include a perspective of corporate values. A vision might

provide a direction for the company for the next 5 to 10 years, while also noting a commitment to integrity,

transparency, openness and other such values. "Mind tools," indicates that a vision statement takes your

mission and adds an element of human values. It should inspire employees and given them a sense of

purpose. 14

On its website for example, pharmaceutical company Merck includes product, customer, employee and

investor interests in its mission statement. It effectively conveys intentions to deliver desired results to each

entity. Its vision statement goes into more details about the company's values and includes the phrase "make

a difference in the lives of people." This phrase ultimately means that the company makes helping the world

with medicine a higher priority than profits in its organizational strategy. The company's vision also notes a

desire to be the best health care company in the world. 15

The Role of Vision

"If you don't know where you're going, any road will take you there." These lyrics to George Harrison's song

"Any Road" are as true in business as in any other walk of life. Managers must define and communicate a

clear strategy if the company is to be successful. Vision and mission statements summarize a company's

business strategy in a form that can be communicated and understood easily by stakeholders. Well-written

vision and mission statements ensure that each element of the strategic management process is aligned to

the company's long-term goals. Managers use clear and concise vision and mission statements to

communicate their aspirations to stakeholders. Employees understand where to focus their efforts if they

align their daily work with the vision and mission. Clear vision and mission statements allow customers,

suppliers and shareholders to choose whether or not they want to do business with the company. Employees

may understand the mission of your company, but the vision will also link the mission to strategic business

goals. A well-written vision will frame those strategic goals in a meaningful context, explaining to employees

why those goals are good for business. For example, your vision may be to become your region's most

13 Bryson, J. Strategic Planning for Public and Non-profit Organizations – A Guide to strengthening and sustaining organizational achievement. 1995. Jossey-Bass Publishers. 14 Green, G. et al. Building our future - A Guide to Community visioning. University of Wisconsin-Extension publications No. G3708. 15 G. Adamson, J. Pine, T. van Steenhoven and J. Kroupa, Resilience (2002), pp. 49–57: figure 2, p. 56. ‘How story-telling can drive strategic change’, Strategy 30. G. Hodgkinson, R. Whittington, G. Johnson and Leadership, vol. 34, no. 1 (2006), pp. 36–41.

preferred source for home-delivered pizza. 16 Some businesses will use the strategic goals as long-term

targets and will also describe their business model in more general terms. The final strategy is a roadmap for

the staff, and they should work towards the business goals incrementally to attain your vision.

16 P. Morris and A. Jamieson, ‘Moving from corporate strategy to project strategy’, Project Management Journal, 18. vol. 36, no. 4 (2005), pp