Managing Change

It has been twelve months since OEC implemented the Transformation Initiative which involves major planned changes to the organisation structure and culture. However, resistance to the change initiative has mounted from all level of the organisation. It is found that people oppose change for a variety of reasons which include rational factors, non-rational factors, political factors, management factors and organizational factors. Manifestations of the resistance problem are higher staff resignation, lower manufacturing productivity, worsening product quality, soured relations, insecurity, rumour mongering among other symptoms. Kurt Lewin contributed extensively in strategies that deal with resistance to organisational change. The organisational development method also dealt with the resistance problem. Other key issues are utilising resistance, power to influence, organisation culture and managerial choice.

It has been twelve months since OEC implemented the Transformation Initiative which involves major planned changes to the organisation structure and culture. However, resistance to the change initiative has mounted from all level of the organisation. This report aims to provide a comprehensive study of the resistance to change problem. In section 2.0, a critical review of management change literature provide some answers on what are the main causes of resistance in an organisation. In section 3.0, examples of the manifestation of resistance to change in OEC are reported. In section 4.0, the major strategies that deal with the issue of resistance to change are reviewed. In section 5.0, issues and considerations that should be considered when managing resistance to change is discussed.

In examining the literature on change, it is found that people oppose change for a variety of reasons. The development of organizational theory has shown that resistance to change to be a complex, multi-faceted phenomenon. It is caused by a variety of social factors such as rational factors, non-rational factors, political factors, management factors and organizational factors. (Waddell and Sohal, 1998)

Rational factors are especially prevalent among senior and middle management (or the ruling class). Influential managers, who are presumably knowledgeable in the art of business strategy, pose a formidable obstacle to the success of a planned organisation change. These managers may either openly or secretly criticise the plans. As the objections come from within management, the credibility of the proposed change suffers. Due to the disagreement within management, other employees may loose confidence in the merit and benefits of the organisation change proposed.

Managers cannot be expected to always make rational decisions, which are in the best interest of the company. More often than not, managers are driven by self-interest and aim to extend their power within the organisation. Managers are often politically motivated in their decision to support or resist the change. An organisation change can cause major shift in the distribution of power. Robbins (1986) suggests that power is derived from four separate sources: a person's position; personal characteristics; expertise; and the control of key information. Kanter (1979) adds another source of power, which is the control of resources. We can see that all these sources of power can be adversely affected by organisation change with the exception of personal characteristics.

Non-rational factors are personal reasons of each individual employee for rejecting the organisational change. The goals of an employee are often not the same as those of the organisation. What is good for the organisation may not be necessarily be good for its members. Many organisations are currently obsessed with maximising their profit. Hence, management gurus tend to prescribe corporate restructuring to achieve a lean and flat organisation structure. Employees are well aware that inevitably, some of them will loose their jobs. Therefore, most employees are deeply concern about the preservation of their jobs, their shrinking salaries and increase stress, rather than achieving the organisation goals.

The de-layering and de-centralisation of organisation structure clearly threaten the job security of a significant portion of the workforce. According to Maslow (1943), the need for safety and security (or Job Security) is one of the lower level needs, superseded only by physiological needs. Therefore, strong resistance is anticipated when job security is threatened.

Some employees may resist change if they perceive that they do not have the required skills and abilities to meet the requirements of the new organization structure and culture.

Perceived weakness of the management can increase resistances to change. Past failures haunt the minds of employees, creating distrust and resentment towards those leading the change (Block, 1993; Bridges, 1980; Bryant, 1989; Ends and Page, 1977; O'Toole, 1995).

Fundamentally, employees do not oppose the change per se, rather they resist the uncertainties of the change and they fear the potential outcomes that the change can caused (Waddell and Sohal, 1998).

Some of these fears are probably due to misinformation or lack of information about the scope and impact of the changes. According to Kotter (1995), "under communicating the vision" can cause increased cynicism among employees. He advocates using every communication channels to broadcast the vision. An ineffective communication system will cause employees to depend on the grapevine.

In a research done by Doyle (2002), he discovered that a significant cause of stress during an organisational change was the apparent emotional pain and angst brought on by profound shifts in social relationships with peers and staff. In a tightly-knit organisation community, the group will exert strong resistance against the break-up of the existing social structure.

Lewin (1947a, b) postulates that an individual behaviour can be modified by the group behaviour of the informal group that he belongs to. Consequently, a charismatic leader of the group who is against the organisational change can influence other members of the group to oppose the change too.

An overly dynamic organisation can cause "initiative fatigue" among employees. The never-ending changes may be regarded as "fashion driven" and met with increased hostility. (Buchanan et al., 1999)

OEC has embarked on an ambitious initiative to transform itself for almost twelve months now. However, opposition to the planned change remains strong from every levels of the organisation structure.

Gwyneth Paltrow of Human Resource Department reported that there has been a 46% increase in staff resignation in the last six months. It may seem that this development is in line with our objective of reducing overall head count. However, the reality is that the company is loosing the more experienced and productive staffs as they can easily find employment among the competitors. Problematic and "dead wood" types seem to be staying put. The company can ill afford to loose its core workers as their accumulated experiences and knowledge is an important competitive advantage. In this case, the company's loss has strengthened the competition.

Tom Jones, the Manufacturing Manager, reported that productivity has fallen by 32% compared to the previous year. Not only is production output falling behind schedule, Quality Assurance Department also informed that there has been an increase in the number of re-worked items.

Further investigation revealed that relations between factory supervisors and workers to have soured considerably. Supervisors complained that workers are increasingly rebellious and often refusing to follow direct instructions. Workers on the other hand accused supervisors of being overly bossy and frequently going back on decisions made during Quality Circle meetings.

Since initiating the staff empowerment program, supervisors are increasingly insecure. They resent the fact that workers now have direct access to managers. In a discussion with Tom Jones, it is found that he is quite defensive of his supervisors. He reiterated his belief that workers are unable to contribute to any improvement and must be dealt with a firm hand. He contended that the present TQM strategy is futile and doomed to fail.

The tension between Accounts Department and R & D Department seems to be worsening. Julia Roberts, our Accounts Manager, has always been against the move to make department heads accountable and fully responsible for their own departments expenditure. She claimed that the R & D Department has gone overboard with "exorbitant and unjustifiable purchases". As for the other department heads, she does not consider them competent enough to handle financial matters. She warned that if the current pattern continues, the company will face a huge deficit. In his defence, Thomas Edison, the R & D Manager accused Julia of being obsessed with maintaining her power and purposely creating trouble by withholding payments to his suppliers. He said that the purchase of new equipment is necessary, if he is to follow the fast-track development programme insisted by senior management.

Within the strategic planning team, it is highly probable that some team members are secretly working against the present transformation initiative. Highly sensitive and confidential matters discussed during the strategic planning meetings have found its way into the company grapevine with disastrous effect on staff morale.

Rumour has it that the present change initiative is a last ditch effort to save the company. It follows that should there be no improvement in the upcoming financial result; the company will be forced to down-size its workforce.

Lewin (1947a, b) states that since group behaviour modify the individual behaviour, the focus of change must be at the group level and should concentrate on influencing the group's norms, roles and values.

Lewin (1951)'s Force Field Analysis is a useful tool which maps driving forces (forces promoting the desired change) and restraining forces (forces acting against the desired change). It allows the change agent to anticipate deal with the potential resistance during the planning stage.

Action research involves rational, systematic analysis of the problem within a group context. Information, hypotheses, actions and evaluation of action taken is derived from the group in order to solve the problem. The advantage of this approach is that the change process is learning as well as a bonding situation for all parties. (Bennett, 1983) Therefore, conflicts are resolved during the process.

Lewin (1947a; pp.228-229) proposes that successful change requires three steps:

1. Unfreezing the present level
2. Moving to the new level
3. Refreezing the new level

During the unfreezing stage, resistances to the planned change can be addressed.

Since organisation development approach has been around since the late 1950s, there exist a large framework of theories, best practices, resources and proven effectiveness to aid the change agent in his work.

Organisation development has its roots in behavioural sciences such as psychology, sociology, anthropology, systems theory and management practise. As most of the resistance to organisational change stem from the human factors, organisation development would seem to be the logical approach to implement planned change.

Hurley et al. (1992)'s research show that there are five clear values espoused by organisation development practitioners.
1. Empowering employees to act
2. Creating openness in communications
3. Facilitating ownership of the change process
4. Promotion of a culture of collaboration
5. Promotion of continuous learning

Organisation development involves making major overhaul to the prevailing organisation culture. Uttal (1983) warns of the difficulties and advisability in trying to do this. He adds that even if the initiative succeeds, it is a terribly long process, which may take between six to fifteen years. Therefore, this limitation should discourage organisations whose very survival depends on changes to be made in the short and medium term.

According to Meyer and Zucker (1989), the short-term economic benefits of changing organisation culture may not justify the risk of stagnation and demise in the longer term.

Brown (1995: pp. 153) warns that might be resistance to the planned organisation culture change as employees may have an emotional stake in the prevailing culture.

5.0 Issues and Considerations When Managing Resistance to Organisational Change

OEC's experience of the past twelve months has shown that organisational change is highly complex, exhausting and fraught with uncertainties. Resistance to change has been viewed rather negatively. The response to any objection or grouse has been to quash it immediately.

Waddel and Sohal (1998) contend that resistance can play a useful role in an organisational change effort. It draws attention to aspect of the change which may not be appropriate, not well thought out or perhaps plain wrong. The change process also gained from the influx of energy contributed by resistance. Additionally, resistance encourage the search for alternative methods which may prove even more innovative than initial plan for change.

Judson (1996; pp. 69) has the view that resistance to change is not the fundamental problem, but merely a symptom of more basic problem. Therefore, it follows analysing resistance will yield a deeper understanding of the malaise plaguing the company.

The strong resistance faced could be due to the strategic planning team's lack of influence on the rest of the organisation. The team is authorised and empowered by the Chief Executive Officer to carry out the transformation initiative. However, team members are mainly from senior management and hardly representative of the organisation at large. The position and power of the strategic planning team only increase the resentment of employees towards them. This situation was made worse when the team decided to impose disciplinary actions on some dissenters.

In French and Raven (1959)'s work on organisational power, several types of power were defined.

* Legitimate power is derived from a person's position in an organisation.
* Reward power is based on a person's ability to reward.
* Coercive power is the power to punish.
* Referent power is based on a person's personality, behavioural style or charisma.
* Expert power that is due to special expertise a person has.

It is found that generally people respond differently depending on the type of power used on them.

The use of legitimate power or reward power will typically result in compliance, but subordinates are unlikely to exert more than the minimal effort.

When coercive power is applied, resistance is often encountered. Resistance may means that the subordinates only pretend to comply or they may openly resist.

However, the best result is obtained when either referent power or expert power is used. It frequently results in commitment or willingness to exert high level of effort to achieve the objective.

As commitment is the ingredient that is lacking in our change programme, the application of both referent power and expert power is likely to yield positive results.

Kotter (1995) stated that one of the error committed during a transformation process is not creating a powerful enough guiding coalition. He called for the head of the organisation plus an influential team with a shared commitment to spearhead the change process.

To identify prospective members for the guiding coalition, Kurt Lewin (1951)'s Force Field Analysis can be used. This management tool will help in the identification of charismatic personalities within the organisation. Obviously, these influential people are valuable sources of referent power should they be persuaded to be a member of the guiding coalition.

To identify prospective members for the guiding coalition, Kurt Lewin (1951)'s Force Field Analysis can be used. This management tool will help in the identification of charismatic personalities within the organisation. Obviously, these influential people are valuable sources of referent power should they be persuaded to be a member of the guiding coalition.

Expert power may come in the form of a well-known external change consultant, as internal change agents lack the required credibility. The external consultant's job would be to clarify the vision, explain the rationale for change and advise on its implementation. Working closely with members of the guiding coalition and the management team, the consultant's objective would be to gain their total commitment through a deeper understanding of the transformational change process.

The guiding coalition, whose members come from different part of the organisation, is to act as the communication channel and champions for the transformational change. These people will be well-placed to manage any resistance that may arise within their department.

Some organisations seems to be able to re-invent itself continuously with very little effort, while others resist even the most minute of planned change. A logical explanation is that the prevailing organisation culture exerts a strong influence on the propensity of the organisation towards change.

The Culture-Excellence approach promotes the creation of strong, flexible, pragmatic cultures, which promote the value of trust, co-operation and teamwork (Burnes, 2000; pp. 144).

Tom Peters (1993), a strong advocate of the Culture-Excellence approach, stresses that radical and transformational change is the way to cope with the uncertainties in the external environment. He pointed out that in excellent companies, workers are treated with respect and dignity, and there is a sense of closeness and family feeling.

Deal and Kennedy (1982) believed that within organisation with a "strong culture", leaders have strong control due to their ability to resolve uncertainty and insecurity. Employees likened to be patients in a hospital, do what they were told because they value and depend on the care they are receiving. They are obedient because they do not wish to run the risk of being cast out into the hostile and uncertain world. In other words, employees fully submit to the leaders, because they feel that they are being taken care of.

Within OEC, any announcement of planned change is often followed by protests. This seems to imply that the prevailing organisation culture is highly unsuitable for transformational change.

Hence, from the organisation culture perspective, there are two possible course of action. The first option warrants a deeper analysis of OEC's organisation culture. This is then followed by plans to transform it into a "strong culture". Alternatively, the incremental change strategy should be adopted as it is less disruptive.

A common fallacy in change management literature is that the ultimate aim of change is to align or realign the organisation with its environment. Managers are assumed to be prisoners of the circumstances in which their organisation operates. Therefore, the possible choice that a manager can select is quite limited (Burnes, 2000; pp. 459-460).

In reality, Burnes (2000; pp. 460) contends that managers do have more freedom in deciding than previously assumed. Rather than making their organisation fit into the external environment, managers may attempt to influence and re-structure the environment and other constraints instead, or in other words - changing the rule of the game.

In the OEC context, knowing the difficulty of changing the company's internal environment, one may ask whether changing our external environment would be easier.

This report has analysed and has documented the resistance problem that OEC face presently in implementing its transformational change initiative. It is also a compilation of the strategies, issues and considerations that need to be addressed while managing resistance to change. Although the information collected are somewhat limited in scope and lacking in details, this report can be a good starting point before launching into further studies on the subject.

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