Organizational Change

Case study: In 2014, General Motors (Japan) released a report elaborating on how the company went through significant changes and the strategies used for change management. The case study is discussed in the recommendation section of the paper.

Introduction

The modern business is growing fast and undergoing major change processes (Dawson and P. 2019), compelling managers to acquaint with the change processes. Almost every business organization is seeking to introduce and adopt innovative policies of production, train their employees, sustain their loyal, and acquire new customers and explore new markets (Rothaermel and Frank 2017). Globalization is also progressively influencing changes. Every company is finding ways of getting into the global market (Khan et al. 2014).

Innovative systems and strategies can significantly disrupt the smooth running of an organization. Management of change is essential for the smooth transition of the organization. The purpose of managing change is to minimize the resistance (Sarban and A et al. 2016). Change management maximizes teamwork needed to establish the shift (Zairi and M 1977). It is also essential for the efficient operation of the organization during changes. Therefore, organizational change management strategies are vital when organizations adopt programs that interrupt the functioning of the organization. It requires time to effect change within an organization. There are also various frameworks used for managing changes within an organization (Kauffman and H. 2017). The structures do not reduce costs or risks that would come with change but to improve the cooperation of members of the organization during the transition. Therefore, organizational change is the ability of the management to administer change processes within the organization and how the administration can realize maximum benefits and support for the change process in a way that minimizes the resistance of the change process from the organization and enhance the acceptability of the change (Kasemsap and K 2017).

To change an organization and affect profitability from the change entails processes such as effecting the change, controlling the change, and adapting to the change. The long term objective of the change is to ensure the long term sustainability of the organization.

What can be changed in an organization: Culture, technology, business model, procedures and rules, selection and recruitment, job designs, appraisal methods, the techniques and tools of the human resource, the physical environment of the organization, development, and training plans, job descriptions.

Change management means taking all the necessary measures to impact improvement to the current situation and implement the strategies of change, to realize maximum profit and propagate the objectives of the organization.

An overview of the structure of an organization

An organization is an entity with a purpose and with internal and external participants with patterns of activities of the participants into a recognizable structure (senior and Swailes, 2016). Organizations are systems that interact with subsystems and have components inside of the extensive policies and environments that provide inputs to the system and which receive outputs. Two categories of subsystems exist: formal and informal. The legal system of an organization comprises the strategy of the organization, the objectives of the organization –which involve ways of achieving the goals of the organization through operational activities such as the production of goods and provision of services (Hall and R.H 1977). Other elements include the components of the services provided by the organization. The service component of the organization is the primary businesses of the organization that facilitate other activities within the organization. The examples of these components of services comprise the human resource department, accounting and finance, information and technology services, and clerical and administrative support services (Scott and W.G 1961).

The management is the ultimate formal core decision making and control element of an organization. The component of the structure of the organization is also vital to the smooth functioning of the organization. The informal subsystems of an organization consist of the political culture of the members of the organization, patterns of communications, values and power and influence, and norms of the organization. The informal subsystems interact to make inputs within the organization and turn them into outputs that circulate into the environment through customers and clients.

Types of organizational change

An organization is a complex structure that realizes its achievements with its context. Formulating a change policy that will accommodate the kind of change is essential for the success of a change process (Almeidiyeen and M.S 2019). Therefore, organizational changes consist of the first-order transition that involves evolutionary and increasing change or second-order changes, including transformational, strategic, or revolutionary changes. Evolutionary or growing changes entail improving the current situation without interfering with the structure of the organization.

Second-order changes, also called radical changes, are complete changes that affect the framework of the organization. Grundy (1993) developed innovative change models, which were slow growth changes, changes with growing pits, and interrupted changes (Amstrong and M 2016). Moreover, adaptive changes described by Nut involves change transitioning from one unit of an organization to another. New changes comprise innovative ideas and methodologies. Innovative, radical changes are changes considered to influence the confidence of the management.

Environmental triggers of organizational change

An organization can be disturbed by specific external and internal forces that necessitate change (Al-Haddad 2015). Regulatory changes need to balance several internal and external forces. As a result, every organization establishes itself in a particular setting. Therefore, each organization has to create an interactive process with several other organizations and individuals. Likely, every organization has roles and ambitions that negatively or positively affect others in its environment (Giauque 2015).

On the other hand, others also negatively or positively affect the smooth running of the organization. Therefore, an organization should conduct is affairs while considering the goals and objectives of other organizations within its ecology. The modern environment is diverse and progressively grows. Changes in social, technological, economic, legal, and political ecology may force an organization to change its strategies and structures.

Moreover, changes within the internal system of an organization may lead to the need for change. The replacement may be due to differences in managerial personnel or inefficiency of existing organizational policies. The workforce changes progressively. Similarly, generations come with distinct values and norms. Employees aged above 50 years’ esteem loyalty to their employers while employees below the age of 30 are loyal to their principles. Contrary, the need for change may often be due to the inefficiency of the organization’s structure or arrangement. Severally, organizations simply change for flexibility and to avoid inertia.

Triggers for change from the technological environment

There are several examples of changes that can emanate from changes in technology. The young generation has indulged in phone technology are a target. Mobile phones are marketed in terms of looks to favor the latest designs. A better example of the technological change processes includes the heightening use of robotics to perform tasks that could be achieved by humans. Statistics for robotic density which is described by Westbrook (2000) as the number of robots for every 10000 employed people. In 1998, in the United Kingdom, the robotic density was 19, 42 for the US, and 277 for Japan. The evident variation in robotics by different states may have been due to the difference in the development and distribution of the industry in particular countries. However, adopting robotics or not as of today is a matter of choice. For instance, robotics offers both cost and quality. Quality is very critical in the manufacture of electronics. There are areas in a semiconductor plant that require to be 1000 times cleaner than a hospital operating theatre. Thus if organizations choose to use robotics, there will be a more significant impact on the employment rates. There will also be a restructuring of the organization of work. Notably, the environment will retain only a few employees.

The use of the Internet is also paramount in any technological engagement. The internet has influenced almost every aspect of organizational work, particularly the use of Internet-based communications. For example, the BBC news (2004), was concerned that as the first cyber café, that was opened in the UK in 1994, as it celebrated its tenth anniversary, its future was uncertain internet access in homes heightened and forged dominance. The eruptive use and distribution of Internet and opportunities created by the fast-developing industry of Information Technology influence every aspect of an organization, including the employees and the external environment of the organization. Since employees utilize the Internet at work, employers now monitor non-work-related activities. Besides, the Internet has dominated marketing. However, there are other challenges like spam explosion and other unwanted marketing messages. The organization and the employee should use this work environment, guidelines, and protocols that underline practice codes. Managers have not been able to monitor the time spent by employees in non-work-related use of the Internet.

Triggers for change from the Socio-cultural environment

The attitudes and the expectations of the employees toward work concerning their lifestyle affect the organization. The Socio-cultural context may affect the organization in many ways:

• The progressive increase in the standard of living also comes within an increase in social expectations.
• There are changes in the demographics that cause the inadequacy of the young people getting into the markets.
• The family structure has changed such that men, instead of women, may be willing to stay back at home to care for children.
• Demographic changes also affect the population across age groups and consequently determine the number of people of working age to the number of people of retirement age.

The number of single men and women has increased. This is in addition to the increase in the numbers of single widowed people. For this reason, the role of housing associations currently provides housing to thousands of individuals. The impact of this phenomenon on organizations is to encourage their employees to invest. The structure of the organizations must, therefore, change to those that foster innovation. The overall result is an influence in the structures of organizations, increasing the flexibility of the work environment, and cooperating with other organizations while remaining competitive.

As discussed, organizations operate functions in three types of environments. There historical developments that, with time, cause changes in an organization. The temporal environment influences the organization through the cycles of industry-based innovations that see the organizations through significant events. The external environment of the organization includes political, technological, and socio-cultural contexts, including globalization and the physical environment of the organization. The internal environment consists comprise the organizational structures the are the first-line in responding to changes within the organization.

The organizational competence increases when aggressiveness and response to changes are relational to the environment of the organization. Ansoff and McDonnel (1990) explain that there are five levels of turbulence in the situation in the context of organizational change.

1. Level 1: predictable- they explain that the stability of the markets is determined by repetitiveness in the environment of an organization. This implies that challenges caused by changes in the trends of the markets change themselves. That the difference in this context is occurring at a slower rate that the organization is unable to respond. Also, the future should correspond to the past.
2. Level 2: Forecastable by extrapolation- in this context, there are more complications. However, through extrapolation, managers can predict the future with confidence.
3. Level 3: predictable threats and opportunities- at this level, the ability of the organization to respond to changes becomes more challenging due to an increase in the complexity of the environment. However, managers can predict the future with confidence.
4. Level 4: Partially predictable opportunities- with globalization and changes in the socio-political environment, the disturbance is at a higher level. In this environment, the future is only partially foreseeable.
5. Unpredictable surprises: unpredictable events increase environmental turbulence. Things happen very fast, such that the organization is unable to respond.

Changes happen progressively, which may influence only a segment of an organization to the severe changes that cut across the organization, interfering with the structure and framework of the organization (Noriah and N 2017). Changes that characterized by Hard are likely to be enacted easily and fast compared to changes exhibiting soft complexity (Honstein and H.A 2015). The Hard Systems Model of Change relies on analytical techniques and related to systems engineering, operational research, and project management. It provides for rigorous systematic ways of determining the objectives of change, which is followed by the formulation of potential options for actions, and lastly, using s criteria to test the effects. The model provides for three processes: (1) the description phase which conducting a diagnosis of the situation at hand, understanding its scope, and setting the objectives for the change, (2) the options phase in which generate options for change, and appropriate choice for replacement is selected, and beginning to think about the next step.

1. Description- it is crucial to start by elaborating on the system for change. This stage should proceed with caution. Consultations should occur among the concerned people (Gollenia and A. 2016). This stage includes developing the reason for the analysis and a more extensive elaboration (with words or diagrams) the situation of the change.

Next, identify the objectives and constraints to the change and list them in correspondence with the diagnosis. Subsequently, alternating the goals according to which is essential and containing the limitations (Al-Haddad 2015). The next step is to identify the measure of performance, which comprises formulating standards of production against the objective tree.

1. The generation of options follows analyzing how to achieve the objectives. Then possibilities are sorted according to the possible ones as described by the situation, which is evaluated. (Huang and F. et al. 2016). The choice of options is put against the criteria.
2. The implementation phase–Strategies for implementation include conducting pilot studies that eventually lead to change, parallel running, bing bang. The essence of pilot studies is to solve any problems before the change. However, pilot studies cause delays, which is essential in a fast-paced, dynamic situation. Parallel running means that the new system is run alongside the old system until there is the satisfaction that the new system is valid and reliable. The bing bang stage is to increase the speed of the change, which may cause resistance. It requires some time to adopt the system. Concentration and support for the shift intensify.

Solving a problem means selecting an agreeable course of action that elicits an outcome that satisfactory and good enough (Canall and C. 2018). The soft systems approach relies on common sense, and referral can be made as to what can or cannot work (Tidd and Bessant et al. 2018). To some extent, this approach entails a lot of trails and errors. Most managers that apply this research are critical thinkers. They use very little qualitative and quantitative data to justify their conclusions. They give excuses for a short time, insufficient information, or that the situation is too complicated that they focus on minimizing risk and maximizing the likelihood of survival. This approach is likely to be satisfactory. However, it is solely committed to the qualitative type of thinking. (Cameron et al. 2019). It also lacks the seriousness that is brought by a serious analysis of the situation. This approach does not come clear with the depth of change (Holland et al. 2016).

Another category of users of this model, rather than relying on common sense, prefers solving problems that mostly uses research-based scientific methods and tools (Mello et al. 2017). This implies that this category of managers likely to use quantitative methods instead of qualitative models for specificity. Management scientists and managers who are technologically advanced use this model frequently (Yeoman and Whitley et al. 2016). The approach by the second category of managers is almost similar to Hard Systems Management since the managers emphasize quantitative methods of analysis, objective setting generation of options for change.

Besides, when looking into the inadequacy of factual data in the clinical approach to mess management (managers who use common sense) (also called resolvers), the model is limited since it is more mechanical than deliberate behavior. Since this method handles a complex of integrated problems, trying to use this method to deal with a single issue loses the crucial elements of the complex.

The third strategy is called the design approach that works on the phenomenon that states that to dissolve a problem, it means to change the nature of the environment of the problem to remove the problem from the system (Siriram and R.2012). Problem dissolvers redesign the substantial entity of the problem. Instead of solving the problem based on the parts, they seek to dissolve the issue in a more extensive system.

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Factors Behind the Changes Made by General Motors

General Motors were influenced by their competitor Toyota in North America, which is one of the biggest markets for both companies. Other than Toyota, Chinese companies also dominated the markets, causing a massive decline in profits for the company. The company afterward experienced significant financial constraints. The cash flow of General Motors completely collapsed (Khan and Hashim 2014). Besides, General Motors was paying its employees $74 per hour in contrast to Toyota, which paid $44 per hour. From the discussion, the company decided to administer changes that included structural changes, changes in costs, changes in the production process, and cultural change (Khan and Hashim 2014).

The company experienced significant challenges during the change process. The company concluded that changes in the costs of production, and reduced the costs of production and the profit margin. Likewise, the company cut the wages of the employees. In the years that followed, General Motors cost-cutting saved General motors 1.5 billion. Also, the company changed other policies like reducing the automotive board to 8 members who reported directly to the CEO of the company (Khan and Hashim 2014). This design was to speed up the decision making process. The company increased its profitability after these significant changes. However, some of the challenges during the transition include the lack of involvement of the employees. Also, since the company was under a trade union, it was mandated to pay the minimum wage of 80%. This was an evolutionary growing change since the change process did not interfere with the framework of the organization.

The following recommendations would have increased the effectivity of the change.

1. As discussed, changes in the socio-cultural environment directly affect the employees and determine the attitude of the employees toward work (Honstein and H.A. 2015; Alvesson and M. et al. 2015). Due to this, the company would have considered other segments like the cost of production Kirk and D. 1995). Likely, lack of involvement of the employees in the change process led to negativity and resistance to the change process (Crawford and Pollack et al. 2004). Surveys would have been administered to the employees to get their insight on the problem and better understand other segments that needed change.
2. The company may have used Hard Systems Management. Conceivably, the strategy used may have had several omissions (Pollack and J 2009). I recommend that the company should have used to detail the Hard Systems Management that entails a comprehensive diagnosis of the situation, elaboration of the reasons for the change to all stakeholders, prompt communication, and administering pilot studies (Mabin and V. 2015).

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