Change management can be defined as the efficient and effective implementation of the policies and tasks necessary after takeover or merging of one or more companies or organizations. Change management focuses on the careful management of the processes involved in the gradual adjustment of the “new” management and its workforce.
More often than not, the newly merged or acquired business entities don’t really have an easy time adjusting to the changes brought about by the acquisition or take-over. As a result, these entities engage in activities that are somehow resisting to changes. Therefore, the major activities of the company such as the manufacturing of products, product development, production and distribution become severely hampered.
However, change management deals with all operations done within companies and organizations. Activities such as the management of purchases, the control of human resources, logistics and evaluations are often the focus of change management. A great deal of emphasis lies on the efficiency and effectiveness of processes. Therefore, change management includes the analysis and management of internal processes.
Companies today have to be efficient, flexible and profitable. Without these factors, it would be very difficult to compete in the global economy. Aside from participating in strategic alliances to fully enhance the resources they need to become competitive, many companies now evolve and expand through mergers or acquisitions. Among the most important merger and acquisition deals in recent years are Daimler-Chrysler, Chase-J.P. Morgan, SKB-Glaxo, NationsBank-Bank of America, and Deutsche Telekom-Voice Stream. Although global economic and market conditions are unpredictable, the future provides the best conditions for the continuation of merger and acquisition processes.
Some businessmen argue that the fast pace of mergers and acquisitions ultimately becomes the driving force behind the formulation of agreements and rules for business conduct. Merging and acquisition deals may have the potential to create enormous economic and social consequences. They can easily drive away the major competitors within a country. They can also determine how and where people should work. However, earning the approval of the government for merging and acquisition deals would never be easy.
Change management undergoes through a series of stages. At every stage, the effective management of human resource (HR) and cultural issues is critical. This is initiated by the identification of the HR issues and their significance for the company’s activities. If not handled properly, this could lead to the further downfall of the organization instead of going upward towards the ladder of success.
Positive Impacts of Effective Change Management
Among the competitive advantages enjoyed by most companies upon reinforcement of effective change management include the following:
· Economies of Scale and Scope in manufacturing and research and development.
· Unique Quality Technology owing to heavy emphasis on research
An organization’s commitment to research & development activities has always been one of the top strategies to remain competitive in the market.
· Differentiated Products
Through the production and marketing of differentiated products originating from their research and development activities, the company is able to create its own firm-specific advantages. The continuous pursuit of research and development processes enables the company to produce a steady stream of originally differentiated products which makes it difficult for competitors to find substitutes. Because of this differentiated approach, the company is able to market their products worldwide, which enables them in turn to maximize the returns on research and development expenditures.
RESISTANCE TO CHANGE & LEADERSHIP
The aftermath of most resistance to change cases among organizations and companies often leads to the implementation of a somewhat autocratic type of leadership and management. Because of the adjustments that the newly combined workforce would have to endure, it is not surprising that at first the new management would hold so much power and decision-making authority. The management would have the tendency to seldom consult its employees especially in making crucial decisions. As a precautionary measure, the change management would include having a perfectionist type of management to make sure that the new reporting system would remain consistently efficient. The motivation environment is often characterized through the establishment of a new structured set of rewards and punishments.
However, as time goes by the workforce and the new management gets to jive with each other. Along with this is the changing of leadership type from autocratic to a democratic type. This way, the participation of all key stakeholders especially the workers will be more encouraged. If they feel something is right or wrong, or if they want to tell something important to the management, they can now be free do so without any worries. Also, a democratic leadership approach allows the management to have a feedback regarding the policies and regulations being implemented. They will immediately know if there is any tension going on between or among the stakeholders involved. Thus, immediate action can be planned and implemented by the management to keep matters from getting worse.
Advantages of Democratic Leadership and Transparent Communication
1) Improved Company financial control – the capability of the company to gain profit will be very evident because all units are virtually converted into profit centres. Thus, the company will be able to operate an internal capital market more efficiently.
2) Improved Strategic Control – management will be able to concentrate on planning and refining corporate strategy since they are assured that the workers are working efficiently.
3) Enhanced Growth – This type of leadership would be able to overcome a limit to growth because it allows the company to take control of many business operations without having risks of overload in information.
4) Improved Internal Efficiency – since the performance of every worker can be easily monitored under a democratic type of leadership, the management will be able to realize that corporate managers can detect their inefficiencies, and this will motivate them to aspire for excellence.
RESISTANCE TO CHANGE & ORGANIZATIONAL BEHAVIOR
It is normal that when the new management starts to assume its post, it will have to implement stricter rights and privileges for its workers. There is a possibility that the once strong and transparent relationship that existed between the management and workers prior to the acquisition or merger would be replaced by frustration and hatred. When this happens, the performance of the new workforce will surely be severely affected and their efficiency will decline. This is because of concentrating on their work, they will now be more concerned about the diminished benefits they would be possibly be getting. These worries and anxieties will pave the way for them to inhibit frustration and anger towards their new supervisors and the management as a whole, feeling they are already taken for granted.
It is a well known fact that human resources play a crucial role towards differentiation and a potent source of competitiveness for any organization or company. Therefore, any organization must take care and constantly invest in human resource development especially during these periods of adjustment to a new management and environment. However, the determination of the extent to which an organization can invest in terms of human resources development depends on the financial capabilities of the company or organization. The rights and privileges of the workers must be carefully studied under the change management program of the company, because it should jive with the basic policies of an organization’s human resource development strategy.
Common Resistance to Change related Organizational Behaviour Concerns
1) Formation of the divisional-corporate authority relationship – the problem here is in making the decision as to how much authority would be needed to centralize at the corporate level and how much authority would be also needed to decentralize at the divisional level.
2) Information Distortion – if the corporate centre will pressure the divisions too much, then the divisions might be encouraged to radically change the information they normally supply to their corporate managers.
3) Competition of Resources – since corporate divisions are normally evaluated on return of investment (ROI) criteria, this might cause them to start competing for resources).
4) Transfer Pricing problem – when corporate divisions engage in competition, it would become extremely difficult to set fair prices for trading resources between them. This is because each division will try to set the highest price it can to maximize its own ROI. However, these efforts can undoubtedly alter the corporate performance and ROI.
5) Short-term focus on research and development – if the corporate divisions will be evaluated on the basis ROI target, this might put pressure on research to improve their financial performance.
IMPLEMENTING CULTURAL CHANGE
A. Cultural Change Planning
Cultural change planning is a necessary function within companies and organizations undergoing change management. In most companies and organizations this process is often very difficult because of the fast rate of cultural change and the occurrences of unplanned events. Therefore, companies and organizations must use several methodologies to prevent further unnecessary resistance to change by the workforce. Nevertheless, the objectives of the organization for cultural change planning do not change: efficiency and effectiveness in the long run.
Cultural change planning is being implemented by most organizations and companies in order for their workforces to coordinate together to be able to do their activities and resources in time. This enables the organization to achieve its goals with minimal resource utilization while providing opportunities for the new and old employees to bond together as a new workforce. Cultural change planning also enables the company or organization to monitor the progress of their plans at regular intervals and maintain their control over operations. Cultural change planning within most companies and organizations involves four elements: cultural change scheduling, labor planning, and cultural change cost planning.
- Cultural change scheduling involves the specification of the beginning, the length or the duration, and end of the planned cultural change activities.
- Labor planning involves allocating the necessary personnel and delegation of responsibilities and resources during the process of cultural change.
- Cultural change cost planning involves determining the costs and the possibility of their occurrence during the process of cultural change.
B. Cultural Research Analysis
The occurrence of cultural research within the organization or company reflects the growing difficulty in the management of organizations that require the effective use of valuable resources, especially their people. This is the reason why cultural research analysis is being done by most organizations and companies in order to determine the most effective ways to coordinate their newly acquired human resources through the application of analytical methods derived from fields of studies such as mathematics, science, and engineering .
Through this process, culture-related problems among the old and new employees are solved in different ways and alternative solutions are then relayed to the company’s management. The management then selects the appropriate course of action in line with their goals. More often than not, cultural research analysis is concerned with complicated issues such as top-level strategy and human resource allocation.
Culture research analysis actually may vary according to the structures and philosophy of the company. But normally, most companies centralize cultural research analysis in one department at a time. Cultural research analysis may also have the possibility of working closely with top level managers in order to identify and solve a variety of culture-related problems.
No matter what the type or structure of the company is, culture research analysis operates under similar sets of methodologies in order to carry out the analysis to support the company’s goal to improve the overall performance of their newly established workforce. The process is started by the description of the symptoms of a culture-related problem, followed by the formal definition of the problem. For example, a culture research analyst for an organization might be questioned regarding the most effective bonding activity for every department. Also, the analyst might be asked to determine the optimal number of employees needed to be kept in a department while taking into consideration the differences of the cultures of the people involved.
Cultural change planning within the organization determines the best ways to utilize on of its basic factors of production, the human resources. Cultural change planning is the bridge that links the goals of management and operational performance of the workforce. It is concerned with the increase in productivity through the proper management of people and choosing the appropriate methods of business organization.
The organization’s management performs the careful analysis of the culture of their employees and their behavior. In this process, they make use of various methods in its culture research to meet the requirements. They also develop systems of cultural management control in order to aid in the planning of finances and cost analysis in the process of cultural change. These systems are eventually subjected to improvements for the effective distribution of goods and services.
Critical Cultural Change Implementation Factors
For the organization to be able to implement successful cultural changes, the following implementation factors are critical:
· Financial Stability
Financial stability is crucial especially in the pursuit of cultural change management and development activities. In any industry, it is important to remain updated with the latest cultural change management developments to be able to stay competitive in the market.
· Workforce Performance
The production of the best products and services in spite of cultural differences among the employees comes as a result of well-funded cultural change management and development activities. The strong performance of the workforce could also be linked to their willingness to succeed. However, the organization has to be aware of the cultural changes in their workforce so as to maintain satisfactory profits margin and remain competitive in the market.
IMPLEMENTING TECHNOLOGICAL CHANGE
A. Technology Change Planning
Technology change planning would serve as the link between the established standards and practices in the company. It would be able to articulate, organize, and most importantly integrate the content and processes of the company policies with integration of appropriate technologies. It would facilitate multiple levels of company policies and decision making.
In general, the technology change planning is an ongoing process that would translate organizational, public policy, and technology needs of a company or organization into concrete actions. It allows the company to take advantage of the latest technology innovations while at the same time minimizing the negative impacts of unexpected challenges. Technology change planning provides a clear pathway for the implementation of the various Information Systems and E-business technologies which could result into a more efficient expenditure of the company’s resources and an improvement in company performance.
The Technology Change Plan should reflect the policy and environment of the company. However, the technology change plan cannot guarantee the needed changes. The technology change plan must ensure that the processes of technology change plan development, implementation, and evaluation are included as the integral components of the implementation of the necessary Information Systems and E-business technologies. A well-designed Technology change plan would be a dynamic tool that will serve as a guide for the company’s innovations. This technology change plan would also represent opportunities for dialogue and professional development that enhance company decision making.
The Technology change planning should:
- Be an organized and continuous process, utilizing a simple yet direct planning model, and resulting into a document which would improve how the various technologies are used for the company’s management, assessment, and communications.
- Take into consideration the mission and philosophy of the company or organization, its management and employees. While outside assistance, such as those that can be provided by consultants, can inject broader perspectives to the technology change planning process, the process requires the total commitment of the company or organization’s management and staff.
- Be broad but realistic enough in terms of its scope. The technology change plan must also include economical and technically feasible solutions.
- Involve all the stakeholders—including the management, employees, staff members, clients, and technology experts–with experience in technology change.
- Identify the strengths and weaknesses of the company or organization and how each will impact the implementation of technology change.
- Make a formalization of the company procedures and methods for making technology change decisions, which should include also the setting of priorities and the evaluation, upgrading, and uses of technologies.
- Be driven by the goals and objectives of the company or organization rather than by technological developments.
B. Information Systems for Effective Technology Change
Most companies and organizations implement these specific information systems to improve their business operations and induce an overall effective technology change.
Transaction Processing System
This information system is tasked to collect and organize operational data of the company’s activities). For example, a typical banking operation by a company involves transferring 0 from the account of their client to the company’s checking account. This would seem like a single operation to the company, but in reality this transaction consists of two steps: debiting the clients account by 0, and crediting the company’s checking account by 0. If the debit operation succeeded and the credit did not, then the 0 would disappear.
The transaction processing system will combine these two operations and group them into a single transaction. This will be done through the production of copies of the data in question, and these copies are then made to run the operations on the copied data. When both commands have successfully completed, the changed data is written back to the system in a single operation. If one of the operations fails, the copied data is simply discarded, and an error is reported.
For many years transaction processing was the domain of information systems, especially since they these information systems were able to guarantee that any changes to the database would be completed. This worked well for most companies, and they could all even run on top of a database with a single client-server.
However, in recent years this model has also become more difficult to maintain. As the number of transactions grew in response to various online services, a single database proved to be very inefficient. Also, most online systems consist of a whole suite of programs operating together, as opposed to a strict client-server model where the single server could handle the transaction processing. Nevertheless, this type of information system will significantly bolster the business operations of the company or organization when successfully implemented.
Management Support Systems
1) Decision Support System
This information system goes beyond one-way presentations and sharing of applications to enable a focused exchange of ideas over the Internet or an Intranet. Researches have proved that electronic brainstorming is able to generate more and better ideas. This is brought about by the combination of parallel idea generation and the utilization of focus group discussions and tools for the organization of ideas. Therefore, decision-making is done with a higher degree of consensus and a higher likelihood of implementation success. Meetings within companies and organizations would only take less than a fraction of time as expected. But more importantly, the employees walk away with the minutes of the meeting in hand, regardless of where they are.
Also, because the tools are web-based, the company management can choose the proper setting for the meetings, whether to place the clients in a conference room, set up a distributed meeting or a mixture of both. The management can decide whether the meeting should be done in real-time or whether the clients can participate and contribute their ideas only when their schedule allows them to. Either way, the company or organization can be assured of getting the same focus and productivity while at the same time having a significantly greater flexibility in terms of scheduling.
2) Executive Information System (EIS)
The Executive Information System begins with the identification of problems. These include the gaps between the desired and actual states that cannot be easily closed easily because of the new knowledge that needs to be produced to support the decisions and actions needed to close them. There are generally three (3) classes of such problems:
· problems occurring in the business processes;
· problems occurring in the knowledge processes; and
· problems occurring in the Knowledge management processes.
Problems occurring in the business processes cannot be resolved through the use of Knowledge management solutions, but through knowledge processing solutions. The other two classes of problems, however, can be solved through the use of Executive Information System services. This Information System will identify, formulate, and evaluate the knowledge processing and knowledge management problems
This is the most important service that the EIS could provide. Failure to solve a business process problem within a company or organization, for instance, may not be caused by a problem in the organization and structure of their organizational knowledge processes. Instead, it may be possibly caused by a failure in solving an extremely difficult business process problem, even though available knowledge processes are working just fine.
There are certain instances, however, that it is not always very clear what the nature of the problem is, even if a knowledge processing problem exists. For example, the fact that the knowledge needed to support a particular decision is not there may be possibly caused by the fact that the knowledge exists, but is currently unavailable because of a poorly operating knowledge sharing process. Another possible explanation is that it could be caused by the fact that the process of the development of new knowledge claims is not open to most organizational participants.
The bottom line is the process on how the problem is formulated and diagnosed. Because of its experience in the development of the underlying conceptual foundations of Knowledge Management, the Executive Information System will be able to identify, formulate and evaluate knowledge processing and knowledge management problems within the company.
3) Expert System
The Expert System is meant to solve real company problems which normally would require hiring a human expert to solve them. Building the Expert system therefore first involves the extraction of the crucial information from a human expert. Such knowledge is often characterized as heuristic in nature. However, the extraction of relevant information from an expert in a way that can be used by a computer is generally a difficult task. Therefore, a knowledge engineer is needed to do the job of extracting this knowledge and building the expert system knowledge base.
The first attempt in the construction of the Expert System would unlikely be very successful. This is partly because the human expert generally would find it very difficult to express the necessary knowledge and rules needed to solve the problem. Much of it is almost subconscious, or appears so obvious that most human experts don’t even bother mentioning it. Knowledge acquisition for the Expert System would involve a big area of research, with a wide variety of techniques that also need to be developed. However, it is important for the company to first develop an initial prototype based on the relevant information extracted in the interview of the human expert, then make some refinements on it based this time on the feedbacks coming from both the human expert and from the potential users of the Expert System.
In order to do such refinements from the prototype it is important that the Expert System must be written in such a way that it can easily be inspected and modified. The system should be able to explain its reasoning and also be able to answer questions regarding the solution process. The system updating must not involve rewriting a whole lot of codes. It must include simply the addition or deleting localized chunks of knowledge.
The most widely used knowledge representation scheme for expert systems is rules. Typically, the rules do not have certain conclusions, but there is some degree of certainty that the conclusion will hold if the conditions hold also. Statistical techniques are often used to determine these certainties. Rule-based systems, with or without certainties, can be easily modified, thus making it easy to provide helpful traces of the system’s reasoning. These traces can be further used in providing explanations of what it is doing.
Expert systems have long been used to solve a wide range of problems in domains which include medicine, mathematics, engineering, business, law and education. Within each domain, they have been used to solve problems of different types. Types of problem involve diagnosis (e.g., of a system fault or student error); design (of computer systems); and interpretation (of, for example, geological data). The necessary problem solving techniques tend to depend more on the type of the problems rather than on the domain.
Office Automation System
The Office Automation System would provide the incorporation of important company documents of all types through the integration of images into the Automation System. The Office System would include applications such as word processing, database, and mail, all of which are able to access image documents. The storage of document images is made possible through the utilization of a variety of storage media such as microfilms and optical disks. An image access subsystem, on the other hand, provides to each of the Office Automation applications the uniform access to images stored on all of the media. The image access subsystem can then be used as a hardware controller to handle some of the complex events in the retrieval of images from the image storage devices. A relational database system must be used in order to organize the stored images so as to provide flexible access to the images and to isolate any effects of reconfiguration of the image storage system.
CONCLUSION
The results of the analysis carried out on the modern knowledge regarding change management of most companies and organizations indicated very significant effects, even amidst the threats of unrest. Therefore, we could conclude that the change management of organizations could still be expected to improve faster than average.
The review of the relevance of leadership in resistance to change revealed very little inconsistencies regarding the existing knowledge regarding change management. This is coherent with the traditional inside-out approach. However, the need to reconcile both the inside-out and outside-in approaches becomes imperative now.
The analysis of the effects of resistance to change on the elements of organizational behavior revealed certain gaps, most of which are biased towards the environment. However, these gaps paved the way towards determining a number of recommended strategic options.
Also, organizations and companies have to find a balance between adherence to internal forces within the management and to the changing forces of the environment in order to implement an effective change management policy.
Credit:ivythesis.typepad.com
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