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Contents

Key aspects of modern management: .................................................................................................... 2


How they affected the MDs approach to success: ............................................................................. 3
What is Transformation Change? ........................................................................................................... 3
How organisations are transformed? .................................................. Error! Bookmark not defined.
Examples of transformational change? ............................................... Error! Bookmark not defined.
Challenges of Transformational Change ............................................................................................. 4
Reasons for the Challenges .............................................................. Error! Bookmark not defined.
Consequences of Implementing Transformational Change ............ Error! Bookmark not defined.
Using Kotter’s 8 stage process and other supporting theories and models for transformational
change explain how the MD might have gone about achieving success. ............................................... 6
Comment leadership approach the MD may have adapted................................................................... 6

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Key aspects of modern management:
Management has developed a lot over the last number of decades and is continuing to do so every
day. In the world we live in today, managers are staying away from “Old School Management” styles
and are embracing the new era of management. We are now progressively moving away from
authoritarian and autocratic leadership that didn’t foster progressive growth and entering a new phase
where most companies embrace more open and inclusive managerial styles such as participative and
democratic (R. Pettinger, P446). Modern management has become a place where the employee is now
seen a truly valuable cog in the machine on the road to a successful organisation.
One of the key aspects in modern management is ensuring a participative approach is used within an
organisation to ensure a high level of employee engagement and empowerment is achieved. As
Richard L. Daft (P326) explains, participation is a key way to get employees to buy into change, if
they have a say in the change, they will be much more likely to implement it in a positive and
proactive manner.
Training and development is a fantastic tool that can be used to shift organisations from traditional
mindsets into a modern way of thinking and acting. One way of bringing in change into an
organisation is through a process called “Organisational Development” (OD). “Organisational
Development is a planned, systematic process of change that uses behavioural science knowledge and
techniques to improve an organisations health and effectiveness through its ability to adapt to the
environment, improve internal relationships, and increase learning and problem solving capabilities”
(Pettinger, P318). Pettinger (P320) acknowledges that change in an organisation can be a very
difficult task, but explains the three stages of the process, unfreezing , changing and refreezing.
Unfreezing is the initial step and is about making the organisation aware of the need for change.
Changing is where the organisation trials new methods of working, and finally refreezing is where
“individuals acquire new attitudes or values and are rewarded for them by the organisation”.
Another key aspect of modern management is the shift from an adversarial orientation to a partnership
orientation. This shift in culture is a way for organisations “to reduce costs and add value to both
sides, rather than trying to get all the benefits for their own company”(R.L.Daft P75). A partnership
approach with the external environment allows positive development to flourish, which in turn has a
knock-on effect for the cultural environment inside the organisation. As R. L Daft explains (P77),
when the external and internal environments match up, the results lead to an organization “that is
tough to beat”.
A shift in hierarchical structure is also a key indicator of modern management techniques being used.
The traditional structure or “tall structure” is one where there are many different levels between the
bottom and top which can lead to a physical and psychological disparity. A more modern approach to
organisational structure can be referred to as a “flat structure”. This method of structuring an
organisation reduces the distance between senior managers and day-to-day staff, which fosters closer
relationships between all members of the organisation (R. Pettinger, P420). R.L Daft (P278) also
describes flat structures as having a high span of management. This means that there is more
subordinates per supervisor than in the traditional model, e.g. 30 to 40 in versus 7 to 10 which allows
for “creativity, innovativeness, and accountability of lower-level managers” to develop.
Keeping on the topic of organisational structure, another key aspect of modern management is a move
from traditional departmentalisation structures such as, functional and divisional, to a more team
based approach. As read in the case study, the functional approach can lead to internal conflicts
between departments, which has no positive benefit to the organisation a whole. Team based
approaches allow “managers a way to delegate authority, push responsibility to lower levels, and be
more flexible and responsive in a complex and competitive global environment” (R.L Daft, P285).

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Team based approaches also allow leaders to sort out conflicts between members with differing
opinions and as such, lead to increased team cohesiveness and performance (R. L Daft, P537).
Finally, as briefly mentioned above, a fundamental aspect of management in modern times is to
ensure that the employee is engaged. As Macleod and Clarke point out “Levels of engagement matter
because employee engagement can correlate with performance”. Pettinger is also a believer that
engagement in the workplace is crucial for productivity and can lead to better working relationships
amongst colleagues and supervisors (P488).

How they affected the MDs approach to success:


I believe all of the aspects of modern management mentioned above affected the new Managing
Directors (MD) approach to success.
Firstly, the new MD understood that the industry was changing attitudes, aiming to become more
collaborative than adversarial, and so, his first task became to marry up the changing external
environment with a new internal environment, one focused on partnership. The way MD envisaged
this to occur was by bringing in an participative management style. By bringing this new method of
management into XYZ, he set up the required environment to foster real change within the
organisation.
The new MD knew that for the participative management style to truly work, the attitudes of the staff
would need to change. The previous culture left behind his autocratic predecessor needed to change
and a new culture of teamwork and engagement was required.
The MDs first task of broadening out the senior management to include key staff who were not
directors, I think is a clear indication that he was moving away from the traditional hierarchical
structure in favour of a flatter structure that would allow for relationships to develop beyond
traditional vertical boundaries, something that I believe is crucial for developmental success, as even a
director can learn something new from janitor.
His awareness of the need to retain and retrain staff is also a key reason why I believe he was
successful. Organisational development is great tool in order to change an organisations operations
and culture, whilst also keeping the vast levels of experience from existing staff. This clearly
indicated he was aware of the importance and value of existing staff which can lead to staff feeling
valued and as such achieving higher levels of engagement, furthermore leading to higher levels of
productivity for the organisation.
The MDs emphasis on removing functional barriers and thus, enabling a more teamwork-based
approach is another factor I believe lead to his success. The old, functional departmentalisation
strategy was clearly not working efficiently and leading to friction between departments. The
amalgamation of head office empires was I believe another decision that helped him on his way to
success and it lead to a more centralised conflict resolution system that could be easier managed
between departments.

What is Transformation Change?


Business just like many aspects of reality is constantly evolving. This evolution is a result of the need
to adapt to new challenges and create competitive advantages. In addition, not only do modern
businesses and organizations rely on technology and the media, they must also adapt to social and
corporate pressures in the form of regulations, corporate responsibility and direct competition. As a
result, without the flexibility to adapt to its environment a company may find it difficult to thrive by
relying solely on experience. The process of integrating change to meet the demands of an
organization’s environment is known as transformational change. Transformational change is a
complex concept which covers a range of areas within an organization, this complexity is highlighted

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by the following definition which describes transformational change as three things “an approach, a
philosophy and a methodology”. A more specific meaning from the business dictionary describes
transformational change as "a shift in the business culture of an organization resulting from a change
in the underlying strategy and processes that the organization has used in the past. A transformational
change is designed to be organization-wide and is enacted over a period of time". This definition
describes transformational change as essentially the rerouting of the organization’s strategic direction.
Transformational change is therefore a comprehensive procedure and a means of altering the
fundamental principles and processes that previously characterized an organization in order to achieve
an ultimate goal.

Reasons for change


As mentioned in the paragraph before like everything that exist organizations must adapt to an ever-
changing environment in order to thrive. In some cases, change may be a matter of life and death for
an organization. The specific requirements needed by a particular organization in order to adapt to
its environment depends on a several factors. A report by Forbes insights in January 2014 based on a
survey on 106 executives identified 3 of the main catalyst for driving transformation within an
organization. In descending order of the most common reason they are as follows:

1. Regulation changes

The introduction of new regulations introduced by statutory and governing bodies in a particular
industry can have major implications on the organizations operating within that area. For example,
the introduction of the health and safety act in the 1970’s transformed the construction industry.
With the increase of accountability for accidents within the workplace construction companies were
forced to change their manner of operation in order to avoid falling foul of the law.

2. Increase in competition or new or changing competition

Competition within many industries can be extremely fierce with several companies vying for a
proportion of a market share. In order to compete with increase competition some companies may
be forced change their business strategy to compete with other businesses. For example, a company
may choose to focus on areas of expertise to avoid wasting resources on areas where competitors
excel at. Or to adjust a company may decide it has to increase the quality of its product or service in
order to separate it from its competition e.g. better customer service

3. Changing customer needs and expectations

A good example of this reason for change is may be observed in competition between modern smart
phone companies. As time progresses the needs of customers change. Most often the changes are in
the form of an increase in the requirements and quality of a product. Based on my personal
experience a mobile phone was required to provide phone calls and text messages however modern
phones are now required to provide email viewing, internet capabilities, satellite navigation, picture
taking in addition to phone calls and texting. In order to meet the demand of customers companies
such as Samsung and Apple must adapt their company structure and culture to one that focuses
more on style and innovation.

Challenges of Transformational Change


To take a quote from the famous philosopher Niccolò Machiavelli “There is nothing more difficult to
carry out, nor more doubtful of success, nor more dangerous to handle than to initiate a new order of
things.”. This quote highlights the difficulties encountered by an organisation whenever a
transformational change is to be implemented. Organisational transformational change often results in
the in the introduction of a new order of things, which is a process that may be described as dangerous

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for the organisation due to the major implications for the future of that business. Although
transformational change may include changes in structure, procedure, system or process, the biggest
challenge for an organisation is changing the behaviour of people within it.

Difficulties when changing the behaviour of people within the organisation


The biggest challenge for an organisation when it comes to transformational change is the resistance
of the staff to the perceived change. There are several reasons why individuals may be reluctant to
change. For example, workers may have a fear of trying something new. An individual may be
reluctant to adopt a new method of performing his/her job because of the comfort and familiarity with
the previous methods. For instance, in an administration office some workers may be used to
following a script on the telephone when communicating with customers. If an organisation proposes
a change to the script perhaps because the previous script was too old fashioned some staff may feel
reluctant to embrace the change. They may feel learning a new script may be too difficult as it
probably took them some time to become accustomed to the previous one. Another reason for
resistance from workers is a perceived significant change in workload or loss of job. For instance, in a
business which decides to introduce a new technology into its operation process. Some workers
having heard the idea may feel their role may become limited or redundant and that they may
eventually lose their job. Similarly, the introduction of new technology may increase the difficulty of
the job role which may result in a backlash from workers. Workers may also feel aggrieved when they
feel they are have not been compensated adequately for the increased difficulty in the work. The other
reasons for resistance to transformational change include a scepticism about the necessity of change,
reallocation of resources, previous negative experiences lack of belief in proposed change and threat
to current relationships

Implications of Conflicting visions among executive leadership or decision makers


Forbes insight highlighted several factors which can derail the transformation process, including lack
of adequate technology, Lack of internal talent to spearhead or execute business change and
resource and budget constraints however the biggest issue highlighted was Conflicting visions
among executive leadership or decision makers. If the transformational process is not executed
successfully it can have severe consequences on the behaviour of the workers and ultimately the
success of the business or organisation. Lack of an effective transformational strategy may result in a
negative response in the staff which in turn may cause complaints, reluctance to put procedures in to
action, anger, truancy and absenteeism, lack of commitment. Ultimately if a significant number of key
executive leaders disagree with the changes proposed, an attempt to improve the state of an
organisation may in fact lead to a disastrous outcome. In 2012 Zurich UK life appointed a new CEO
named Gary Shaughnessy to transform an organisation which appeared to have become stagnant for
some time. One of the solutions included changing the mindsets of the most senior members in the
organisation. Research about the staff in the company showed they were unfulfilled and did not feel
valued. His proposed solution was to ensure the executives became closer to the staff by increasing
the face to face interaction while at the same distancing themselves from the technical detail of the
work. The aim was to improve the relationships between the leaders and the staff of the company
while at the same time ensuring the staff felt empowered. Because the executive agreed with the
vision of the CEO, they implemented his proposal. A follow up survey showed the new executives
and staff interaction policy had been effective because the staff felt more valued. For the executives to
implement the new staff interaction they had to be committed to new proposal. Because the executive
were willing to implement the new changes, the company benefited. However, if the executives
disagreed with the proposal or refused to change perhaps because they felt they were comfortable with
working the way they were used to because of success in the past or they felt the changes will be
ineffective then the company will almost certainly not have gained the benefits of a more content and
fulfilled staff.

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Using Kotter’s 8 stage process and other supporting theories and
models for transformational change explain how the MD might have
gone about achieving success.

Comment leadership approach the MD may have adapted

By having a look at case study, it was seen that Managing Director might have practiced Kotter’s 8
step process and Mintzberg’s 5 P’s. As before MD joined the company had huge disputes between
contractors and sub-contractors. Moreover, apart from this they had aggressive environment.
Managing director thought if they want to be successful they need to bring in change. His implications
on the company and its staff replicated Kotter’s and Mintzberg’s principles.
Both theories had their own ways as its initial step in process of achieving success. Mintzberg focused
on planning which can be used as a guide for future operations so that while following managers and
staff members were more effective. While on other hand Kotter believed that before planning let them
first understand the need of the change however which will improve strategy and efficiency as they
had clear objective.MD used this both techniques he made sure that he had a plan for changing staff
attitude and improving skills which will help them, and also the company to achieve success. He
focused on change in organization by improving relations between contractors and subcontractors.
MD set up goals and objectives which were to be followed by officials however which made them
focus on the vision and brining in necessary changes in the company. He changed the working pattern
of the company. MD made sure that they were more focused on team work rather than individual
works. By doing so they came up as a team helping each other at different levels of the project
referring Kotter’s procedure in practice. As in case of designers and estimators by following and
working on ways shown by MD they were able to be, more fruitful resulting in customer happiness
and company success.
While going on with vision MD wanted senior managers to be more widened. MD made sure that
while working on his plan his visions were clear which was seen in case that to retain staff rather than
hiring new managers as the old ones had lot more knowledge and experience which might help them
change their attitude. Apart from this MD made sure that new policies were introduced to change
work structure and improve skills of their staff. For this he brought new practices as this was
necessary step for brining in a change according to Kotter also. The result of this was organization
build better customer relationship and helped in changing behavior in company managers. His
changes included introduction of new techniques and working process which was focused on
improving company’s overall performance which turned out to be key change in strategy of the
company which followed way described by Mintzberg’s.
He saw that there were obstacles between head office and regional office which he achieved by
changing perspective and empowering staff members to act on the pre-set objectives and not at local
level. He made his staff practice new ways for developing skills which were customer care and
customer partnering and practicing this indirectly brought change in behavior and improve managerial
skills.
By following Kotter’s 5th step of empowering broad action he made necessary changes in
organization. He removed barriers between design and estimation teams and made them focus on
team work also making them focus on company’s vision. By doing so he made sure that there were
less conflicts between construction and design teams. MD might have made everyone focus on short

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term wins through which he can change environment of the company and creating better atmosphere
for them to work.
MD made discussions with all level officials for their views on changes in structure of the
organization. By doing so the aim was remove any barriers and create more process focused company
for which he referred Kotter’s 7th step of never letting up which was related to changing in policies,
systems and working type of the company. Furthermore, he also saw that what new practices he laid
are bringing in necessary changes.
According to Kotters’s 8 stage process, MD may have adapted the following approach for achieving
success:
1. Establish a sense of urgency.

 Examining the market and competitive realities.


 Identifying and discussing crises, potential crises, or major opportunities.
2. Creating the guiding coalition

 Putting together a group with enough power to lead the change.


 Getting the group to work together like a team.
3. Developing a vision and strategy

 Creating a vision to help direct the change effort.


 Developing strategies for achieving that vision.
4. Communicating the change vision

 Using every vehicle possible to constantly communicate the new vision and strategies.
 Having the guiding coalition role model the behavior expected of employees.
5. Empowering broad-based action

 Getting rid of obstacles.


 Changing systems or structures that undermine the change vision.
 Encouraging risk taking and nontraditional ideas, activities, and actions
6. Generating short-term wins

 Planning for visible improvements in performance, or “wins”.


 Creating those wins.
 Visibly recognizing and rewarding people who made the wins possible.
7. Consolidating gains and producing more change

 Using increased credibility to change all systems, structures, and policies that don’t fit
together and don’t fit the transformation vision.
 Hiring, promoting, and developing people who can implement the change vision.
 Reinvigorating the process with new projects, themes, and change agents.
8. Anchoring new approaches in the culture

 Creating better performance through customer-and productivity-oriented behavior, more and


better leadership, and more effective management.
 Articulating the connections between new behaviors and organizational success.
 Developing means to ensure leadership development and succession.

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The new Managing Director has worked for number of other construction companies in past, so he
should transform his knowledge and practice that he has learnt from the past experience.
Firstly, the Managing Director should identify what kind of a structure is needed to attain the
objectives of a business; by using activities analysis, decision analysis and relation analysis. To
achieve the best performance in all the areas of management, organization structure is necessary
foundation.
The MD should do a meeting with the company staff and retain the employers which are willing to
work in the best interest of the company and replace the other employers. Managing Director should
build capability and capacity in a team through supporting employees to improve their talents;
creating conditions for learning to occur by ensuring personal and team working time.
He should create a climate which encourages individual and organizational development through
growing trust and confidence attitudes among employees Moreover he can emphasizes collaborative
working, which will help to solve the problem between estimation and design in the head office. And
most important is appreciating results of teams and provides a focus for effects of innovation and
change.
In addition to the John Kotter’s eight stage model research over the years has yielded several theories
about change in an organizational context. Two of the most established change theories include the
Lewin’s change model and the action research model.

References
MacLeod, D. and Clarke, S. (2009). ‘Engaging for Success’. BIS, p.11
Kotter, J (1996) Leading Strategic Change
http://www.cfma.org/content.cfm?ItemNumber=2378
BĂEŞU, C & BEJINARU, R “USV Annals of Economics and Public Administration” ( USV Annals
of Economics and Public Administration ) Camelia BĂEŞU Ruxandra BEJINARU