Relevance of the Change Management System within the Company

TR Ltd is a medium sized manufacturing company. Its Board of Directors have been concerned about output and efficiency levels, and recently reached a decision to radically reorganize the assembly division in pursuit of increased efficiency. The following is an extract of a conversation which occurred between the Managing Director (MD), Finance director (FD), Human Resources Director (HRD) and the Production Director (PD) after the latest Board meeting…

MD: Well, its been a long process, but at last I think we’re ready to roll things out….

FD: What amazes me is how we’ve been able to keep this quiet from the staff… no one has any idea what is about to happen…

MD: It shouldn’t bother them too much, after all in the present environment they should be happy just to have a job

HRD: With respect, Sir, I think some of the assembly line workers may be very concerned, after all they will be moving to new contracts of employment, on lower pay scales…

MD: Nonsense, this move safeguards the future of the company – and their jobs. A bigger, more successful company will provide opportunities for promotion and advancement in the future… The situation is a winner for everyone… What do you think John?

PD: I still have some concerns that we haven’t fully understood the assembly process… the work which the assembly line actually performs…

MD: Of course we understand the process; we have analysed all of the production statistics, we’ve consulted with industry experts and the company which manufactures the assembly equipment, we’ve studied the system in operation elsewhere – we fully understand all the technical aspects of how the system will work!

HRD: Technicalities are only one part of it… work teams will be broken up, jobs will become simpler, more repetitive… the team leader grade disappears… Staff may not like it…

MD: I don’t employ them to like it, I employ them to do the job which they are told to do! Do you foresee problems with the staff?

HRD: It is possible… a lot will depend on how we actually roll out the changes…

MD: That’s all in hand. Everyone will receive a letter with their next pay slip detailing the new salary scales and terms and conditions of employment, including their new duties…. The start date will be 1 October, and that’s non-negotiable….
 
HRD: Have you considered what we should do if the staff do not cooperate with the new system?

MD: That’s simple – we’ll discipline or dismiss anyone who’s not willing to go along with it! Only three things matter – efficiency, sales and profit….
   
Questions:

1. (i) With reference to both the case AND the relevant literature, discuss whether staff are likely to resist the planned changes; use your answer to identify the reasons for resistance to change. (50%)

(ii) The Managing Director clearly advocates the use of coercion to overcome any resistance which might occur. Through reference to the relevant literature critically evaluate the full range of measures which are available to management in attempting to overcome resistance. Illustrate your answer through reference to the case study scenario. (50%)

2. Through reference to the planned change literature, recommend a model of ‘planned changed’ which TR’s management could have used in implementing the changes. Critically evaluate the advantages which the use of such a model would bring to the situation.

Staff Resistance to the Planned Changes

Changes are inevitable for the business success. The process followed by the companies to introduce changes within the organization, depends upon various reasons. Changes are introduced for reducing the operational expenses, improve the productivity for the company, and increase the profit earning margin. The need for brilliant concepts for implementing organizational changes has been increasing. However, the changes planned by the company in the operational activities and cost reduction can be resisted by the staffs. This report has been prepared on the TR Limited Company. The management of the company has proposed to reduce the operational expenses by reducing the pay structure of the staffs. However, the changes were not informed to the employees of the company (Aldrich, & Ruef, 2006)

Due to turbulent economic condition, it has become imperative to introduce planned organizational changes. Implementing changes within the company is a complex task, and the negative impact related to the same needs to be analysed well in advance. Changes can positively affect the staffs, clients, stakeholders, and others involved with the company. Thus, planning has to be done, before implementing the desired changes within the management. Any changes that can negatively impact the willingness of the staffs to work for the company have to be evaluated. This would help the management to work on an alternative solution through which the problem can be resolved. Sustainable change has to be related with the behavioural changes that impacts the business performance (Bagozzi et al., 2002).

The company has proposed to introduce changes with the current pay structure for the staffs. Proposed changes would be informed to the employees at the time of the next pay. This would be done by sending the employees a letter that would state the changes in the pay structure, along with the new designated job. As per the HRM department, the staffs would resist the changes as it was had impacted the earning ability of the individual. However the management of the company wasn’t willing to agree with the terms of the staffs. This was because; the management had aimed to improve the profit earning margin for the company (Balogun, and Hope Haily, 2004).

Changes having a negative impact on the staffs are not usually accepted by the employees of the company. Majority of the staffs are against the change process, as it can affect the performance and other factors. Thus, the management has to draft effective policies through which the changes can be accepted by the employees, with less resistance. For this, it is essential to improve about the proposed changes, along with its impact. In this process, the change management programme needs to be planned and implemented in an effective manner (Bruhn et al., 2001).

Reduction in the pay structure or change in the job structure can affect the productivity of the employees. This would then affect the production plan for the company. Thus, it is necessary for the management to introduce an effective plan through which the required changes can be introduced within the company. In this process, the management has to communicate the factors related to changes with the staffs. This is also done with an intention of preparing the staffs to accept the proposed changes by the management. Some of the factors or behaviours associated with the change resistance have to be analysed by the managers. This would help in drafting plan for resisting the plan prepared by the management (Buchanan et al., 2005).

Resistance of the Staffs

Experts believe that staffs resist changes regardless of the nature for the change. In this case, it is imperative for the management to highlight the factors or benefits associated with the change factors. Every change is viewed by the staffs to be a risk, and this is one of the reasons for resisting the changes. The differences can be overpowered through reliable and clear communication. Through this process the management can discuss the reason for introducing the changes, the method that would be followed, and the impact about the changes. Thus the sources for resistance for changes have to be analysed. The anticipated objections needs to be analysed, and corrective measures to reduce the same has to be implemented (Burke, 2002).

As per Burke 2009, there are 7 important steps that need to be analysed for implementing changes within the company. In this method, it is essential to mobilise different resources available with the company by identifying the problem associated with the operational activities. In this case, staff resistance is one of the major concerns that can affect the business performance. Thus, the management need to find a positive solution to solve the issue and find the best solution. Effective communication about the reason for introducing the changes and the benefits associated with the same for the company and the employees needs to be informed to the clients. Through effective communication process, it is possible to develop a shared vision between the company and the employees of the company. This would enable the management to find the best solution through which the required changes can be introduced (Burnes, 2004).

The process for communication has to be simple and effective, and this can be done through effective leadership skills. The changes in the policies, rules, and structures have to be planned and implemented by the management. Such changes have been proposed to introduce required changes through which the productivity for the company can be improved. The management of the company has to plan the steps that would have to be followed for introducing the changes. This could be done by introducing the changes in a particular department or the whole company. Such a decision is quite important as it would help the management in analysing the challenges and finding a perfect solution to the existing problem. The stages involved in the method for the change process has to be analysed and the same needs to be monitored. This would help the company in finding the perfect solution through which the issue could be solved (Cialdini, 2009).

As per Darnton 2009, the theory associated with the planned change has to be implemented after evaluating different factors like the existing strategies, structures, staff reactions, and others. Through such understanding it is possible for the managers to adopt and implement an effective approach that would be helpful in implementing the changes. The factors related to the barriers or the facilitators needs to be identified. Some of the barriers are –

• Resistance of the staffs
• Improper plan for implementing the strategies for introducing the changes
• Unexpected challenges faced by the management at the time of introducing the changes (Doyle, Claydon, and Buchanon, 2000)

Motivational factors are –

• Highlighting the benefits associated with the introduction of the changes
• Benefits to the company (Elrod II, and Tippett, 2002)

Literature Review

Changes are planned and introduced by the company to improve the organizational development process. Through this method an effective framework for improving the thinking process related to the changes are analysed. In this process, the system and the steps that would be followed for introducing the planned changes has to be analysed. Through this method, the management would be able to analyse the impact of changes on various departments that functions within the company (Fernandez, and Rainey, 2006).

In this process the belief of the individual related to the terms or conditions required for exchanging and maintaining relationship with the staffs has to be analysed. Management introduce changes for reducing the cost for the operations and expanding the business. However, such changes are viewed negatively by the employees of the company. Employees fear of losing jobs or reduction in the pay structure. These are some of the major reasons that affect the performance and productivity for the company. In this case, it is suggested for the company to maintain positive and ever-lasting relationship with the staffs. This is done by constantly discussing with the staffs about the proposed changes, and the mission of the company. In the psychological contract method, the company work towards –

1. Securing the staffs and their interest (Oreg, 2003)
2. Develop strategies for proper work-life balance
3. Provide flexibility
4. Reward for the loyal services

Through such process, the management of the company attempt to maintain positive and ever lasting relationship with the staffs. It is necessary for the management to treat the staffs equally, as this would enable the company to encourage the staffs to improve the productivity of the organization.  Regardless of the changes proposed to be introduced by the company, it is necessary to ensure that the staffs work towards the objective achievement for the organization. This can be done by building positive relationship with the staffs. Negative factors can directly impact the wiliness of the staffs from various department of the company to work towards the goal achievement (Todnem, 2005).

The changed proposed to be implemented by the company is expected to be resisted by the employees. In this case, the staffs or human undergo through 5 different stages, which are –

1. Denial – The staffs of the company are bound to deny the proposed changes. This is because, the staffs fear about losing the benefits that has been provided to the members.

2. Anger – Changes are unacceptable for majority of the staffs. This is one of the reasons; the employees express anger or negative aspect about the proposed change.

3. Bargaining – In some cases, the staffs of the company attempt to bargain with the management. This is being done with an intention of negotiating with the management (Turnley et al., 2000).

4. Depression – The proposed changes can cause depress the staffs, especially the ones who are not willing to change jobs. Such depression can affect the work ability of the members.

5. Acceptance – The propose changes and the benefits associated with the same are explained effectively to the members. This would increase the possibilities of acceptance of the changed planned proposed by the management.

The challenges associated with such factors can be resolved by the management through effective communication. During this period the staffs needs to be provided with the required support that would encourage the members to work towards the goal achievement. Apart from this, the proposed changes need to be informed by the management well in advance. Immediate change with the pay structure can negatively affect the performance of the company and the staffs (Wiggins, 2008).

The proposed changes can be broken down into simple and effective steps by the management. This would enable the management of the company to analyse the changes, and its impact on the production activities. In this method, it is possible for the management to inform about the changes and analyse the impact of such changes on the employees of the company. The differences noticed have to be worked upon, as this will not affect the performance of the company. Through the breakdown model, the company attempts to analyse the challenges that is bound to be faced with different departments. This would help in analysing the challenges and implementing an effective step through which the issues can be solved. With the help of such planning, it is possible for the management to overpower the factors related to resistance. At first, the reason for introducing the changes needs to be communicated with the members. The resistance or the factors affecting the productivity for the company has to be analysed. This will help the management to continue with the production activities, despite of the proposed changes.  TR can adopt the policy through which the proposed changes related to the management can be interacted with the members well in advance. Through this method, the changes can be implemented on a timely manner (Todnem, 2005). 

Conclusion

Change management is quite an important factor. The reasons impacting the performance of the members or the staffs to accept the change has to be analysed. This would help the management in introducing the required changes through which the resistance can be minimised. It is essential to introduce the changes after analysing the benefits associated with the proposed changes. Benefits and challenges related to the same have to be communicated with the members. This has to be done to improve the relationship between the staffs and the management of the company.

References

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Bagozzi, R., Gurnao-Canli, Z., and Priester, J. 2002. The Social Psychology of Consumer Behaviour. Buckingham: Open University Press

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Bruhn, J. G, Zajac, G. and Al-Kazemi, A. A. 2001. ‘Ethical perspectives on employee participation in planned organizational change: A survey of two state public welfare agencies’, Public Performance and Management Review, 25, 2, pp. 208-28.

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Burnes, B. 2004. Managing Change: A Strategic Approach to Organisational Dynamics, 4th edn (Harlow: Prentice Hall)

Cialdini, R. B. 2009. Influence: Science and practice, 5th ed. New York: Quill, Prentice Hall.

Darnton, A. 2008. Reference Report: An overview of behaviour change models and their uses Research report for the Government Social Research Unit

Doyle, M., Claydon, T. and Buchanon 2000. ‘Mixed results, lousy process: Contrasts and contradictions in the management experience of change. British Journal of Management, 11, pp. 59 – 80

Elrod II, P. D. and Tippett, D. D. 2002. ‘The “death valley” of change’, Journal of Organizational Change Management, 3, pp. 273 – 291

Fernandez, R. and Rainey, H.G. 2006 ‘Managing Successful Organisational Change in the Public Sector: An Agenda for Research Practice’, Public Administration Review, March/April, pp 168 – 176 (2)

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Todnem, R. 2005. ‘Organisational Change Management: A Critical Review’, Journal of Change Management, 5, 4, pp.369 – 380

Turnley, W. H. and Feldman, D. C. 2000. ‘Re-examining the effects of psychological contract violations: Unmet expectations and job dissatisfaction as mediators’, Journal of Organizational Behavior, 21, pp. 25-42

Wiggins, L. 2008/2009. ‘Managing the ups and downs of change communication’, Strategic Communication Management, 13, 1, pp20-23.