Change Management

Change management has become crucial due to the dynamics of various industries as a result of globalization. Companies that manage change effectively thrive, while those that fail become obsolete. This paper will explain how to diagnose, plan, implement and sustain change for a manufacturing organization with a fictitious name Auto Parts Limited, which has rapidly expanded globally.

The first stage in change management is the diagnosis of an enterprise to understand its current situation. Two frameworks can help diagnose the need for change and include systems contingency and organizational life cycle models. The systems contingency model views organizations as open systems that interact with their environments. Organizations are composed of small subsystems that must be congruent to achieve organizational goals (Islam & Hu, 2012). The framework also dictates that there is no single approach to organizing and managing corporations since the best methods are dependent on various factors. The organizational life cycle model of change views an organization through its various developmental stages (birth or startup, growth, decline, renewal or death).

Various problems necessitate change at Auto Parts Limited. Its expansion in the international market means its employees require cultural competence knowledge. Since there is no training and development program in operation, Auto Parts Limited must decide how to institute it to train the workers. The outdated software is a disadvantage because it may hinder the company’s ability to meet its delivery schedules. According to the systems contingency approach, the employees and the outdated software are subsystems that constitute Auto Parts Limited. When one or both subsystems are not functioning efficiently, the survival of the organization is at stake. Therefore, the absence of current systems and skills creates a systemic problem because Auto Parts Limited may utilize partners’ supply chain systems due to systems’ incompatibility.

At the individual level, the intervention required is training employees to equip them with competencies to use in the global market. At the team level, the appropriate intervention is training employees to take a systems approach and understand how each part of the organization pursues its overall objective. At the organizational level, the top leadership must budget for the training program and the update on their inventory software.

One of the best action research models that Auto Parts Limited should use is Kurt Lewin’s model of organizational change. The framework comprises three main stages. The unfreeze stage is connected with challenging the status quo so that people can identify the need for change (Hossan, 2015). Auto Parts Limited can unfreeze by identifying the ineffective software system and lack of training programs. The transition/changing stage involves the adoption of new behaviors, attitudes, and values. In fact, Auto Parts Limited can transition by establishing an employee training program, exploring various alternatives of inventory management software in the market and implementing them. The final stage is the refreeze, which involves institutionalizing the changes. Thereafter, Auto Parts Limited can unfreeze by creating training programs and ensuring that the adopted software is part of the daily activities of the organization.

Kotter’s 8-Step Change Model can provide leadership guidance on how to plan, implement and sustain change. The first step is to create a sense of urgency (Lunenburg, 2010). Using industry information on the extent to which Auto Parts Limited is behind others in training programs and technological innovation, people can realize the need for change. The second step is forming powerful coalitions with influential people in the organization (Lunenburg, 2010). Apparently, such people may be found in all departments of Auto Parts Limited. The third stage is the creation of a vision for change with which people can identify and remember (Lunenburg, 2010). The vision can outline efficiency that the new software and training will provide to drive Auto Parts Limited to greatness. Communicating the vision frequently is the fourth step (Lunenburg, 2010). It is worth noting that Auto Parts Limited can address people’s concerns at this stage. The fifth step is removing obstacles such as resistance and system rigidity (Lunenburg, 2010). The sixth stage is creating short-term wins to sustain the change momentum (Lunenburg, 2010). Auto Parts Limited can create the wins by communicating the benefits of the change from time to time during the implementation. Building on the change is the seventh stage that entails analysis of successes, failures, and areas of improvement continually (Lunenburg, 2010). Auto Parts Limited can use this step to analyze the performance of the new inventory management system and short-term results of the training and improve the achievements. The final step is to anchor the change in the corporate culture (Lunenburg, 2010). Auto Parts Limited can ensure the change is part of the culture by talking about the process regularly and recognizing those who make remarkable contributions.

Reducing resistance requires the identification of change agents to lead the process. For instance, Auto Parts Limited can choose an employee from the department that uses the new software. The second set of change agents should be departmental heads who have influence on employees in their departments. The third person to assume the change agent duty should be from the corporate level of management such as the chief executive officer (CEO). The reason is that people at Auto Parts Limited are likely to support the change when the CEO is supportive.

The change at Auto Parts Limited can encounter three types of resistance, which include employee, middle and lower level of management and shareholders’ resistance. Employees may resist change due to fear that they may not be able to work within the proposed environment. The company should train the employees on how to use the new system to boost their confidence. The shareholders are likely to resist the change because it involves investment, which may reduce their earning in the short term. The management should explain how the training program and the software will benefit them in the long term to overcome their resistance. Apparently, the management may resist the training program because it is time-consuming. Convincing the managers that the change will enhance the achievement of their goals will reduce their resistance tendencies.

The five pillars that sustain change include leadership, systems, culture, structure and strategy (Graetz, Rimmer, Smith & Lawrence, 2012). Leadership is critical to change because it allocates resources, identifies the need for change and motivates people to accept it. Systems are processes that support people to make decisions in an organization. They help the management to analyze data, which support decision-making during change. Culture is associated with the values, attitudes and perceptions that determine how people relate to each other and their organization. Thereafter, culture determines whether people are ready to change or prefer status quo. The structure defines the roles and responsibilities of various personnel and determines the speed of response to changes in the environment. The strategy defines where an organization needs to be in the future and how to reach this position. Therefore, companies with effective strategies allow the use of the contingency theory that supports change to cope with uncertainty. Therefore, Auto Parts Limited must ensure that all the five pillars are present to sustain change.

Learning organizations are connected with places that encourage people to improve their capacity to create the outcomes they aspire, nurture new thinking patterns, acquire and transfer knowledge and modify behavior to reflect new insights (Hussein, Mohamad, Noordin & Ishak, 2014). Learning organizations develop when their environment promotes inquiry and dialogue, establishes learning opportunities and systems to capture, shares information, and promotes collective visions. The first principle of learning organizations is personal mystery, which is the discipline to focus energy to develop patience, clarify personal vision and see reality objectively all the time. It is worth mentioning that personal mystery leads to the development of new knowledge because it embraces objectivity unlike traditional corporations that have limitations resulting from people’s subjective thinking. Team learning is the second principle that is the willingness of team members to shed their personal assumptions and genuinely engage in dialogues that can generate new ideas. Learning organizations encourage team learning, while in traditional firms, team members have personal agendas that hinder their ability to learn from each other. Mental models represent the third principle and are explained as ingrained generalizations or assumptions that influence the way people understand their surrounding and take action. Learning organizations promote the adoption of general mental models, while traditional firms have rigid systems that narrowly define how people should act. The shared vision is the fourth principle which is a skill that people use to create identical pictures of the future, thereby fostering real commitment rather than compliance. In fact, people in traditional corporations have a shared vision because it is mandatory to embrace it and not because they genuinely want to do so. The final principle is systems thinking, which is a perspective of viewing an organization as one unit composed of various subunits that must work together to achieve the overall organizational goal. On the contrary, traditional organizations structure their operations in departments that compete against each other rather than cooperate.

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The first recommendation for Auto Parts Limited is to allow employees to use their skills to innovate without punishing one for failure. Autonomy to experiment and improvise new ideas can offer insights into deficiencies in an organization, which is in line with Rowden’s improvised implementation trait. Secondly, Auto Parts Limited should scan its environment constantly and develop capacities to alter its internal competencies to utilize emerging opportunities and handle threats as proposed by Rowden’s constant readiness trait. Thirdly, Auto Parts Limited should embrace scenario thinking to stay ahead of competitors, which is consistent with Rowden’s constant planning trait (Zhao, Hwang & Low, 2015). Finally, Auto Parts Limited should develop an evaluation program that explores the status of its strategic implementation at various times and adjust accordingly rather than waiting for problems to prompt an analysis. The fourth recommendation satisfies the action learning trait.

Conclusion

In conclusion, the systems contingency theory identified the need of Auto Parts Limited to implement a training program and purchase new inventory management software. The action research model that is appropriate for the implementation is the Kurt Lewin’s Model of organizational change with the help of Kotter’s 8-Step Change Model. The principles of learning organizations include personal mystery, systems thinking, shared vision, team learning and mental models.