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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