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How organization change affect a company

As a multidisciplinary practice that has evolved as a result of scholarly research,

Organizational Change Management should begin with a systematic diagnosis of the

current situation in order to determine both the need for change and the capability to

change. The objectives, content, and process of change should all be specified as partof a Change Management plan.

Change Management processes may include creative marketing to enable

communication between change audiences, but also deep social understanding about

leaderships styles and group dynamics. As a visible track on transformation projects,

Organizational Change Management aligns groups expectations, communicates,

integrates teams and manages people training. It makes use of performance metrics,

such as financial results, operational efficiency, leadership commitment,

communication effectiveness, and the perceived need for change to design appropriate

strategies, in order to avoid change failures or solve troubled change projects.

Successful change management is more likely to occur if the following are

included:[citation needed]

1. Benefits management and realization to define measurable stakeholder aims,create a business case for their achievement (which should be continuously

updated), and monitor assumptions, risks, dependencies, costs, return on

investment, dis-benefits and cultural issues affecting the progress of the

associated work.

2. Effective Communications that informs various stakeholders of the reasons forthe change (why?), the benefits of successful implementation (what is in it for

us, and you) as well as the details of the change (when? where? who is

involved? how much will it cost? etc.).

3. Devise an effective education, training and/or skills upgrading scheme for theorganization.

4. Counter resistance from the employees of companies and align them to overallstrategic direction of the organization.

5. Provide personal counseling (if required) to alleviate any change related fears.6. Monitoring of the implementation and fine-tuning as required.

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Culture

Organizational culture is the collective behaviour of people that are part of an

organization, it is also formed by the organization values, visions, norms, working

language, systems, and symbols, it includes beliefs and habits.[1]

It is also the pattern

of such collective behaviours and assumptions that are taught to new organizationalmembers as a way of perceiving, and even thinking and feeling.

[2]Organizational

culture affect the way people and groups interact with each other, with clients, and

with stakeholders.[3]

Ravasi and Schultz (2006) state that organizational culture is a set of shared mental

assumptions that guide interpretation and action in organizations by defining

appropriate behavior for various situations. At the same time although a company

may have "own unique culture", in larger organizations, there is a diverse and

sometimes conflicting cultures that co-exist due to different characteristics of the

management team.[4]

The organizational culture may also have negative and positive

aspects.[4]

Schein (2009), Deal & Kennedy (2000), Kotter (1992) and many others state that

organizations often have very differing cultures as well as subcultures.

http://en.wikipedia.org/wiki/Organizational_culture#cite_note-0http://en.wikipedia.org/wiki/Organizational_culture#cite_note-0http://en.wikipedia.org/wiki/Organizational_culture#cite_note-0http://en.wikipedia.org/wiki/Organizational_culture#cite_note-1http://en.wikipedia.org/wiki/Organizational_culture#cite_note-1http://en.wikipedia.org/wiki/Organizational_culture#cite_note-1http://en.wikipedia.org/wiki/Organizational_culture#cite_note-hill_jones-2http://en.wikipedia.org/wiki/Organizational_culture#cite_note-hill_jones-2http://en.wikipedia.org/wiki/Organizational_culture#cite_note-hill_jones-2http://en.wikipedia.org/wiki/Organizational_culture#cite_note-cindy-3http://en.wikipedia.org/wiki/Organizational_culture#cite_note-cindy-3http://en.wikipedia.org/wiki/Organizational_culture#cite_note-cindy-3http://en.wikipedia.org/wiki/Organizational_culture#cite_note-cindy-3http://en.wikipedia.org/wiki/Organizational_culture#cite_note-cindy-3http://en.wikipedia.org/wiki/Organizational_culture#cite_note-cindy-3http://en.wikipedia.org/wiki/Organizational_culture#cite_note-cindy-3http://en.wikipedia.org/wiki/Organizational_culture#cite_note-cindy-3http://en.wikipedia.org/wiki/Organizational_culture#cite_note-hill_jones-2http://en.wikipedia.org/wiki/Organizational_culture#cite_note-1http://en.wikipedia.org/wiki/Organizational_culture#cite_note-0

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Internal

It is not only the changes in external factors, which may necessitate organizational

changes; any change in organizations internal factors may also necessitate changes.

Such a change is required because of two reasons: changes in managerial personnel

and deficiency in existing organizational practices.

Changes in the managerial personnel: Besides environmental changes there

is a change in managerial personnel. Old managers are replaced by new

mangers, which necessitated because of retirement, promotion, transfer or

dismissal. Each new manager brings his own ideas and way of working in the

organization. The relationships, more in the organization. The relationships,

more particularly informal ones, changes because of changes in managerial

personnel. Moreover, attitude of the personnel change even though there is no

changes in them. The result in that an organization has to change accordingly.

Deficiency in Existing organization: Sometimes, changes are necessary

because of deficiency in the present organizational arrangement ad process.These deficiencies may be in the form of unmanageable span of management,

large number of managerial levels, lack in co-ordination between various

departments, obstacles in communication, multiplicity of committees, lack of

uniformity in policy decisions, lack of cooperation between the line and staff,

and so on. Beside these internal factors, there are two more internal factors

that give rise to organizational changes.

Nature of the work force: The nature of work force has changed over a

passage of time. Different work values have been expressed by different

generations. Workers who are in the age group of 50 plus value loyalty to their

employers. Workers in their mid thirties to forties are loyal to themselves only.

The youngest generation of workers is loyal to their career. The profile of the

workforce is also changing fast. The new generation of workers has better

educational; they place greater emphasis on human values and questions

authority of managers. Their behavior has also become very complex and

leading them towards organizational goals is a challenge for the managers.

The employee turnover is also very high which again put strain on the

management.

To avoid developing inertia: In many cases, organizational changes take

place just to avoid developing inertia or inflexibility. Conscious manager take

into account this view of organization that organization should be dynamic

because any single method is not the best tool of management every time.Thus, changes are incorporated so that the personnel develop liking for change

and there is no unnecessary resistance when major change in the organization

are brought about.

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Culture represents the beliefs, ideologies, policies, practices of an organization. It

gives the employees a sense of direction and also controls the way they behave with

each other. The work culture brings all the employees on a common platform and

unites them at the workplace.

There are several factors which affect the organization culture:

The first and the foremost factor affecting culture is the individual working

with the organization. The employees in their own way contribute to the

culture of the workplace. The attitudes, mentalities, interests, perception and

even the thought process of the employees affect the organization culture.

Example - Organizations which hire individuals from army or defence

background tend to follow a strict culture where all the employees abide by

the set guidelines and policies. The employees are hardly late to work. It is the

mindset of the employees which forms the culture of the place. Organizations

with majority of youngsters encourage healthy competition at the workplaceand employees are always on the toes to perform better than the fellow

workers.

The sex of the employee also affects the organization culture. Organizations

where male employees dominate the female counterparts follow a culture

where late sitting is a normal feature. The male employees are more

aggressive than the females who instead would be caring and softhearted.

The nature of the business also affects the culture of the organization. Stock

broking industries, financial services, banking industry are all dependent on

external factors like demand and supply, market cap, earning per share and so

on. When the market crashes, these industries have no other option than to

terminate the employees and eventually affect the culture of the place. Market

fluctuations lead to unrest, tensions and severely demotivate the individuals.

The management also feels helpless when circumstances can be controlled by

none. Individuals are unsure about their career as well as growth in such

organizations.

The culture of the organization is also affected by its goals and objectives.

The strategies and procedures designed to achieve the targets of the

organization also contribute to its culture.

Individuals working with government organizations adhere to the setguidelines but do not follow a procedure of feedback thus forming its culture.

Fast paced industries like advertising, event management companies expect

the employees to be attentive, aggressive and hyper active.

The clients and the external parties to some extent also affect the work

culture of the place. Organizations catering to UK and US Clients have no

other option but to work in shifts to match their timings, thus forming the

culture.

The management and its style of handling the employees also affect the

culture of the workplace. There are certain organizations where the

management allows the employees to take their own decisions and let themparticipate in strategy making. In such a culture, employees get attached to

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their management and look forward to a long term association with the

organization. The management must respect the employees to avoid a culture

where the employees just work for money and nothing else. They treat the

organization as a mere source of earning money and look for a change in a

short span of time

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Who can change your organization culture

As a manager, you may have the power to change your organizations policies with

the stroke of a pen. And you may have the ability to hire, fire, promote and demote

people with relatively little effort.

But changing an entrenched culture is the toughest task you will face. To do so, you

must win the hearts and minds of the people you work with, and that takes both

cunning and persuasion.

In their book Blue Ocean Strategy, W. Chan Kim and Renee Mauborgne cite four

hurdles that face a manager trying to institute broad change in an organization. The

first is cognitivepeople must have some understanding of why the change in

strategy or in culture is needed. The second is limited resources inevitably, changing

an organization will require shifting resources away from some areas and towards

others. The third hurdle is motivationultimately, workers have to want to make the

change. And the final hurdle is institutional politics. They quote one manager whocomplains: In our organization, you get shot down before you stand up.

To overcome those hurdles, they suggest a tipping point approach to management.

First of all, recognizing you wont be able to convert everyone at once, start with

people who have disproportionate influence in the organization. Get them committed

to the change, or, failing that, get them out. And once they are committed to change,

shine a spotlight on their accomplishments, so others get the message.

Second, instead of just lecturing on the need for change, look for ways to get people

to experience the harsh realities that make it necessary. Mr. Kim and Ms. Mauborgne

tell the story of New York Police Commissioner Bill Bratton, who in the 1990s made

his top brassincluding himselfride the subways day and night, to understand why

frightened New Yorkers had come to call it the Electric Sewer. Other companies

have taken a similar approach, requiring managers to take calls from disgruntled

customers.

Third, look for ways to redistribute resources toward hot spots activities that

require few resources but result in large changeand away from cold spots or

areas with large resource demands, but relatively low impact.

Finally, Mr. Kim and Ms. Mauborgne advocate appointing a consigliere a highlyrespected insider, who knows who is fighting you, who is supporting you, and what

you need to do to build coalitions and devise strategies for change. All leaders run the

risk of losing touch with whats really happening underneath them. A good

consigliere can go a long way toward solving that problem.

A few more general ideas:

If you want to stimulate creativity in the workplace, evaluate your companys

personnel structure. Managers typically tap only a small portion of workers creative

capabilities. Identify employees strengths and consider creating new groups with a

tailored mix of talents. If you have a project, create a task force. Mix employees withdifferent experience levels: Younger team members may provide energy and

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optimism; veterans may provide insight from past experience. Want a different spin

on brainstorming? Consider creating a plant-packed green room or exterior garden

where workers can spend an hour a week with nothing but a blank pad and pencil.

Encourage innovation through an egalitarian culture, flexible schedules, few meetings

and interdisciplinary project teams. Employees want to feel trusted. One way to fosterthat is by allowing people to work at home sometimes.

Other times, just changing the office set-up helps spur innovation. To encourage

teamwork, eliminate exclusive-looking private office suites and assign everyone work

stations in close proximity to jump-start communication. Consider using the extra

space to create office amenities, like a better break room or an office gym.

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Steps for changing culture

Managing Change

Managing change has become the silver bullet in seeking the final component of

successfully managing strategy, process, people and culture in most modernorganizations. More and more, staying competitive in the face of demographic trends,

technological innovations, and globalization requires organizations to change at much

higher rates than ever before. Few people will argue with this statement, but fewer

still will say their organization does a good job at managing those changes. Managing

change well is a continuous and ongoing combination of art and science that assuresalignment of an organizations strategies, structures, and processes.

A growing number of companies are undertaking the kinds of organizational changes

needed to survive and prosper in todays environment. They are streamlining

themselves and thereby becoming more nimble and responsive to external demands.

They are involving employees in key decisions and paying for performance ratherthan for time. They are taking initiative in innovating and managing change, rather

than simply reacting to what has already happened.

Leading Change

However, in our experience, we have also noticed an unsettling forgetfulness among

managers regarding the principles of good change management. Trendy fads designed

to produce quick fixes are accompanied by decreased awareness of the tools and

techniques of change management that have proven effective in the past. Our purpose

in this article, the second in a series on the subject of change management [see

Sherman article, Vol. 8, Issue 1], is to join the makeover trend by revisiting and

reinforcing some of these basic principles and freshening them up a bit. We discuss

what we consider to be six practical aspects of any change process and describe how

three successful companiesJP Morgan Chases Global Investor Services Division

(GIS), American Healthways, and Microsofthave applied these principles.

1. Do no harm.

In the medical profession, doctors take the Hippocratic Oath to do no harm to their

patients. One of the most important principles in organization change is similar.

Implementing change poorly is often worse than not implementing change at all. Poorimplementation poisons peoples attitude toward change and creates problems in the

future.

The best defense against doing no harm is to take a holistic approach. Too often, and

with the best of intentions, managers change one facet of the organization without

regard for the whole system. Many organizations need to develop better peripheral

vision or whole systems thinking in recognition that all parts of the organization are

connected directly or indirectly and that tinkering with one component exerts tension

on other parts. Implementing a new information system or restructuring a business

without, for example, examining the human implications of such changes increases

the likelihood that the change will be unsuccessful, unsupported, and damaging. Suchchange efforts are incomplete and create tension that consequently drags down the

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momentum of other systems, processes, and people changes, and so ultimately

suppress results.

Moreover, a sense of judgment often accompanies the need for change, as if

whatever people are doing now is inadequate. One executive we worked with,

referring to an upcoming change, said, Lets tear apart and deconstruct theorganization and everything that went before. Then we can come up with something

better to replace it. This attitude sent an inappropriate signal to the employees that

their current way of working was inferior. It cast a veil of negativity across the

organization.

JP Morgan Chases GIS division is a global currency brokerage that enables its

investment firm client base to make international buy/sell transactions at optimum

price points. Despite competition from a variety of domestic and international firms,

GIS had maintained its pre-eminence through ongoing investments in technology and

an increasing emphasis on the delivery of value-added products to its institutional

investors. President Richard Fama and his senior management team decided that abusiness as usual attitude in a fast growing market would be a foundation for

corporate extinction. Therefore, they decided to develop a new strategy, realizing they

would have to invest more time, energy, and resources into implementing and

aligning the strategy with their systems, processes, and culture than they had invested

in the strategy development. The team also realized they would have to implement the

new strategy in a way that would build on past success to meet the challenges of the

future. More importantly, they recognized that the way they changed was as important

as the change itself. They had to ensure that the change made people and the

organization better off.

2. All change involves personal choice.

Any organizational change is preceded by personal change. Senior managers too often

spend time at off-site meetings arguing over the need for change, forging new ideas,

and creating strategic initiatives. After such meetings, they issue memoranda to the

organization and assume that everyone will see the brilliance of their decisions, drop

what they are doing, and perform in new ways without so much as a question or

concern. However, people dont work that way, and it is insulting to assume otherwise.

Change is more often resisted than supported in organizations because people rarely

are given the chance to understand the reason for the change. No one bothers toexplain to them the why. And feworganizations spend time thinking about Whats

in it for the organization member? That is, individuals must believe that it is in their

own best interest to do things differently.

At American Healthways, rated for the second year as Fortunes fastest growing small

business as a provider of proactive disease management services, the shift from a

traditional structure to a process-based structure depended vitally on CEO Ben

Leedles deep and profound belief that the old way wasnt going to work for the

future. But his own conviction wasnt enough to transform the business structure.

With the help of his HR vice president Rita Sailer and internal OD consultant Chris

Cigarran, a series of task forces was created involving a variety of people fromdifferent functions in the organization. These task forces witnessed Leedles personal

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commitment and were allowed to challenge and address the issues at a deeper level,

thus engendering their own commitment to the change.

At JP Morgan Chase GIS, the goal for Richard Fama was a commitment to inspire his

senior team to get beyond their own business unit agendas and work toward fulfilling

goals and aspirations that were bigger than the goals of each of the units individually.One by one, the senior team committed to the larger task. Through a series of team

and individual coaching experiences, they decided their mission was not only to

influence the way things happen at GIS, but also to affect the way things happen in

the financial services industry. At the same time, Fama began a process of informal

skip level meetings with employees in which he could engage them in determining

why and how the new strategy would benefit them as well as the company.

3. The relationship between change and performance is not instantaneous.

As far as human beings are concerned, there is no such thing as instantaneous

transformation. As a result, asking an organization to change (or telling the people inthe organization to change) without giving them resources to do so is a fools errand.

Turning the organization on a dime or pulling the organization through a knothole

are metaphors that do no justice to the process of change. Worse, such wrenching

procedures can create cynical attitudes among employees.

In our respective practices, we have not known of a single person who on one day

could drop a set of behaviors that served customers or added value and on the next

day could perform perfectly a new set of value-adding behaviors. Change involves

time and the opportunity to learn, and learning is often inefficient. So dont expect

performance improvement too quickly.

Morgan McCall, author ofHigh Flyers, maintains that employees, given good

guidance, still need to be able to mess up. Ken Murrell, a professor of organization

change at the University of West Florida, is fond of noting that football teams get to

practice six days to prepare for one day of performance, whereas organizations are

expected to perform every minute of every day. Where is the opportunity to practice

the new behaviors required for organization change?

GIS adopted a series of twelve bold goals that would signify successful strategy

implementation. GIS management set a three-year time line for this effort and urged

all work teams and individuals, through investment in training and performancecoaching, to be clear regarding which of the twelve goals any one of their efforts was

impacting. They further encouraged experimentation and trial and errorthis for a

banking culture that previously had spent much time re-checking the checker and

covering bases to relieve blame for error. To GIS surprise, at the two-year mark,

Morgan Chase GIS had met or exceeded nine of the twelve goals due to its focus on

these goals, tolerance of the varied number of ways to reach them, and investment in

adequate resources to prepare employees to reach them.

4. Connect change to business strategy.

Change for changes sake is a recipe for failure. The notion of If its not broke,break it and improve anyway is a waste of scarce and valuable resources. Change

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should only be pursued in the context of a clear goal, be it personal, group,

organizational, or societal. There is value in consistency, and changing before you

have to or changing to be a part of the latest fad lowers morale and increases cynicism

in the workplace.

Microsoft routinely changes its structure. Approximately every six months, theorganization goes through an exercise aimed at improving the relationships between

various operating groups or between sales and marketing subsidiaries and the

corporate office. The organization members have come to expect these structural

changes and will commit to them only to the extent that the changes yield short-term

results. Consequently, ongoing problems remain unsolved, organization commitment

is weak, and then the structure is changed again.

Under the guise of Lets just try it, an educational organization evaluated all middle

managers and made compensation adjustments according to the size of their programs

or organizations without regard to performance, the value added to the schools

purpose or reputation, or the differences in organizational purpose and structure. Formanagers whose compensation was cut, morale plummeted as they suffered through a

year of doing the same work for less money. In the following year, pay cuts were

restored by 50 percent with little explanation. The cost of reduced organizational trustresulting from a lets just try it approach is not estimable. Organizations

contemplating change must be sure that organization members understand the strategy

and that any contemplated change must align with and support that strategy. In

addition, change leaders must consistently communicate the proposed change within

the context of the business needs so that employees will see a connection between

their own personal effort and the impact of their effort on ultimate business results.

5. Involvement breeds commitment.

Few principles in the management of change are as well documented or understood as

the idea that involvement breeds commitment, yet organizations continue to ignore

this principle. In the U.S., where individualism reigns supreme, managers who do not

involve their workers in decisions that affect them run the risk of stalled changeefforts. But it takes too long, is the most common complaint and source of

resistance to the involvement imperative. To that we respond, And what is the cost of

failed implementation because you went too fast? During our research at Microsoft,

we heard one manager get it right when he said, Managers consistently overestimate

how fast they have to move and what needs to be done in the short run andunderestimate what can be done in the long run. The lesson is that involving people

in change decisions provides improved estimates of time tables, expectations, and

commitment.

At American Healthways, one of the first things CEO Ben Leedle did was

commission a task force of people across the organization to study the organizations

existing structure and to recommend alternatives. By involving key people in the

analysis, Leedle extended his own personal commitment into the organization. The

task force members themselves became convinced of the need for change and

evangelized the effort throughout the organization.

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At GIS, intact work groups met throughout the company to discuss how implementing

the new strategy with its twelve goals would impact the way they did their work. This

activity spurred additional conversations between work groups, and the conversations

became departmental and global. During our work with GIS, one of the senior officers

observed, There have been a thousand little victories because somebody has reached

out to a colleague or work group that they wouldnt have trusted previously, to worktogether and to make something happen. It is happening out there on a day-to-day

basis, in the most remote corners of the organization. That is awfully powerful.

6. Any good change effort results in increased capacity to face change in the

future.

It is one thing to install a change, but it is a quite different notion to implement

change in such a way that the organization is more capable of managing change in the

future. For example, the road to more information intensive organizations is paved

with attempts to deploy enterprise resource planning (ERP) systems. In some cases,

the best that can be said about an ERP system is that the organization has afunctioning information system. In most cases, however, the CFO is unable to say

there was any return on investment (ROI) attached to the deployment. In almost every

case, the organization is left no wiser regarding how or why the deployment

succeeded or failed. The organization has therefore learned nothing about change

management except to call in a consultant for help.

At American Healthways, the task forces that debated, decided, and designed the new

organization structure were operated in such a way that each member had a better

understanding of the process of change. Periodically, the task forces paused from

doing the work to reflect on how the work was going, what they had learned about

implementing change, and how they would do things differently in the future. As a

result, they were able to conduct much of the implementation themselves. Compared

to organizations that have made similar changes, American Healthways external

consulting expense was a fraction of the cost, and their reliance on their own internal

resources to implement the change was greater and more effective.

Similarly, by the time Richard Fama retired from JP Morgan GIS, the organization

had created a way to work across its boundaries and deal with the continuous cycles

of change in the global financial services market. The new head of GIS, Tom Swayne,

saw the power of this organization to continuously implement the changes thrust upon

it and became an advocate of this organizations strengths, ultimately leveraging GISto create a more competitive brand in the financial services industry

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Managing change for a small business

As small businesses grow and evolve, they experience many forms of change, according tothe online management resource the Free Management Library. Whether the change isbecause of growth, a shift in business focus or turnover in the management team, smallbusiness owners must understand the different methods for managing that change to survive.

Be Prepared

One method for managing change in an organization is to be prepared through constantevaluation of the company. The management team needs to continually evaluate sales data,changes in the marketplace and activity by the competition to be able to anticipate change.When a company can see change coming as a result of its own diligence, that keepsconfidence in company management high and maintains morale throughout the changeprocess.

Communicate Constantly

The Free Management Library points out that change is easier to implement when there isopen communication between management and employees. A small business has the abilityto facilitate communication through all levels of the company, and that communicationstructure should be utilized to manage change. Keep employees informed of the conditionsthat may cause a change in your organization, and update the staff on what sorts of changescompany management is considering. When employees understand what causes change, ithelps to break down resistance to that change.

A Written Plan

A written plan is one of the more effective methods for managing change. When a plan isready to be put into effect, put it in writing so that everyone can see it and so that companyresources can be allocated to it properly. A written plan also helps employees to understandwhat parts of the business are immune to the change, and that introduces a level of stabilitythat can make managing the change easier.

Learn to Flow with Change

There are certain things that can be controlled when it comes to change. For example, aschedule on when certain changes will take effect and who is involved is somethingmanagement can control. But outside factors, such as moves by the competition or shifts inthe marketplace, can be out of management's control. The best way to manage change is notto panic. The company needs to flow with the change and alter its plans accordingly. Analyzea change as thoroughly as possible before implementing it, and then implement change in

phases. That way, if something changes, you only have to adjust the phase you are in asopposed to the entire plan.

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Managing change for a large business

Large organizations can only survive in a highly competitive environment if they have the

resilience to effectively deal with change, whether coming from within the company or from

the outside. The impact of nonsmoking legislation on places of business is used as an

example of such change as this program explains how Club Med on Lindeman Island,

Australia, effectively retooled itself to comply with the law. Topics covered include driving

forces and restraining forces, the importance of strong leadership and open communication

during a period of change, potential resistance from employees and external stakeholders,

the benefits of hiring a change agent, and the use of key performance indicators to help

define and evaluate progress during a change. Viewable/printable educational resources are

available online.

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Conclusion

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 customersand 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