Universal Agencies Company Changes in Business Strategy

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Abstract

Technological advancement has turned the world into one big village. Means of communication are so advanced such that it is not just possible to pass a message to a person thousands of miles away but also to hold meetings on a one to one basis with colleagues and partners when your physical locations are worlds apart. Business has never been this easy; global market has become like a local market place if not easier to access.

At the click of a mouse button you have stuff delivered to your doorstep hustle free; no long queues in the bank, no bounced checks, no loads of cash in the pocket just credit or debit card or easier still an email address and you are set to go. However, every good thing comes at a cost; the cost of this comfort and convenience is the willingness to sacrifice the old business culture that we are used to and learn to adopt the new culture.

In order to do this a lot of changes have to be made in the organizational setting and the way we run our day to day businesses. Organizations need to create room to accommodate the changes and this normally comes with restructuring and redefining duties. This does not sound scary does it?

Trouble comes when the change involves automation of the business systems; everyone is scared of being laid off when the management decides that his services are no longer needed as a single computer with one operator can do what he and a number of his colleagues were doing and do it more efficiently and accurately.

This together with other factors that will be discussed later bring about a lot of resistance from employees and Universal Agencies, a property management company is in such a situation where change is inevitable but getting the employees to accept is another problem altogether.

Problem Background

Universal Agencies has been in the Property Management business for many years. Having been started at a time when the industry was unexploited the firm commands a large customer and employee base. Recently, due to the growing competition and the tough economic times the firm has seen a reduction in its profits and the management has to devise ways to earn more profits. As part of the strategic plan, the firm is introducing fleet management into its business.

There are also plans to go international as part of the expansion process. However the localized management and running of business may no longer be applicable when the firm ventures into the global market. The business process needs to be automated to ease communication and monitoring. Most of the employees at Universal Agencies have been with the company since its inception and they have mastered their jobs far too well.

Also, they are accustomed to the working environment and culture that is practiced at the workplace. System automation may bring in lots of challenges to the employees who are used to the manual system which has been in use over the years. They mutual relationships that have been established are hard to break and the management understands this far too well, but again this change is for the good of all the players in the scene.

The employees are not aware of the proposed change but the management expects a lot of resistance from the employees. The question is how to effectively communicate the intentions, justify the change and manage the inevitable resistance that is anticipated. One of the senior managers came to seek my opinion as an organizational consultant on the way to go about it.

To achieve this I need to carry out a research on what the employees would expect if a change was to be implemented, the benefits and the challenges that are expected to come with the change.

Would they readily accept it? Why or Why not? Also I need to collect data on what the managers feel is most challenging in implementing the change and the reasons as to why they expect the employees to resist the change. With the research findings I will then analyze the situation in the context of the merits and demerits and come up with a viable solution.

Literature Review

According to Lewin’s force field analysis model there are three steps in the process of change. These are; unfreezing, changing, and refreezing. Lewin further states that all systems possess driving and restraining forces. During a change process the first stage produces an imbalance between these forces. This disequilibrium can be characterized by employees resistance to the change. Once the change has taken place, refreezing comes into play.

This is the process of consolidating the business process once again but this time in the new setting. By the end of this process everyone will have settled in their new positions and fit into the new system and business is back to normal. Organizational change may take place fast, like in these days, you are never sure when the next change will occur. The competition is growing at a pace that is so fast that organizations find it hard to keep up.

However, if you want to remain in business you have to device ways and mean of being able to change as swiftly as need may arise. After all, no matter the pace at which change occurs , it is still the movement from the present state towards a desired future state in efforts to increase efficiency and effectiveness, (Cummings and Worley, 2005; George and Jones, 2002). Although many changes have this common goal, the forces that trigger change are different.

Change of management, expansions by mergers and acquisitions, restructuring and reorganization are some forces that call for change in structure, strategy and culture as well as the processes, (Kieffer, 2005).Acts of terrorism leave people questioning their safety and examine their vulnerability closely, (Johnson 2002) and this is another driving force of change.

Change comes with many crises resulting from denial and dissatisfaction. These bring about a lot of resistance from the employees and this is the time when leadership skills come into play. The managers should lead by example (Bandura, 1986; Miller and Dollard, 1941) and communicate properly and effectively to make the employees understand what to expect and what is expected of them.

Introduction

As we all know, change is the only thing that is constant. Organizations in general change their business strategies and organizational structures in an effort to maximize the profits and cut down cost. However in many cases this is met with a lot of resistance from the employees. However with proper planning, change management techniques and communication, the process will turn out to be a smooth transition.

It is very difficult for a human being to let go of a culture that he has upheld for years and take up something else that is completely new. This forms the basis of change resistance in organizations. The fear of the unknown, the new organizational system and breaking of routines are some of the reasons why people resist change.

In the context of change management it is important to look at the benefits and shortcomings that are anticipated as a result of the proposed change. It is also important to look at the challenges faced by both the management and the employees during change over; and finally how can these be dealt with to ensure satisfaction and willful participation by all?

Problem Statement

This research paper tries to find the reasons as to why the employees of Universal Agencies are so opposed to the change in business strategy. Also after finding the problem(s) a practical solution or alternative course of action will be recommended.

Project scope

This study will cover change as a process

The challenges faced by the management and the employees.

The most viable and sustainable solutions to these problems

Methodology

Data for this study will be collected by informal interviews on a section of the managers and employees. The information will then be analyzed to determine the root cause of this problem. After data collection the results will be discussed and solutions formulated.

Results and Discussion

Change can be planned or unplanned. Planned change occurs when the management deliberately chooses to modify the organization. Unplanned change occurs when an organization is forced to alter its course of action by factors beyond its control. Such factors may include natural disasters, government impositions and the like. Changes that are as a result of fluctuations in the economy fall in this class.

The case for Universal Agencies was unforeseen; it has come as a part of the management’s effort to save the company from failure. In such a case swift flexibility and decision making are critical. Technological advancement, workforce diversity, and globalization are some of the external factors that necessitate change.

Reduction in profits, organizational crisis, new employee expectations and changes in the working climate are some of the internal forces that stimulate change. Every organizational change regardless of its type or cause is a part of the efforts to increase profitability while enhancing efficiency,

and is met with lots of negative reactions from employees. This resistance comes as a result of different factors as discussed in the following bullet points;

Uncertainty that comes about as a result of change may inflict a sense of fear in the employees. This feeling known as the fear of the unknown is a key factor that leads to the rebellious attitude from employees when a change is proposed. Normally people are more comfortable in environments that they are used to. It is no different when it comes to the organizational setting.

Employees would rather stick to the old culture at their workplaces than to have to adapt to new ways that come with such changes. Effective communication about the anticipated change is very important when it comes to reducing such resistance. The employees need to be made to understand why the change is important, the benefits that come with it and also whatever other impact that may be experienced as a result of its adoption.

The fear of loosing is another cause of resistance. Some employees fear loosing their jobs for instance when an advanced technology is about to be implemented a number of employees may fear replaced by machines.

The esteem and autonomy that comes with certain positions at work may be eroded by introducing new technologies to the job. IT experts for example enjoy the benefit of expertise in computing systems which makes them have the feeling of being in control. An easier to use interactive computer system may not be welcome by this group of employees.

Nobody wants to fail and this fear translates to some form of resistance; it comes as a result of employees doubts to succeed in the new setting. Many are not sure that they are capable of working desirably in the new environment and producing positive results as expected like they are performing in the old system. Another form of fear of failure may present itself when the employees have doubts concerning the anticipated change; they are not sure if it will be or not. This fear makes an employee to opt for the no-change option.

When people work together, they enjoy well-founded interpersonal relationships. These are disrupted by introduction of changes. For example system automation limits the one-to-one discussions concerning some issues or the movement from one desk to another or office to office in search of files or other materials. All these are accomplished at the click of a button. Discussions are either done through chat messages, electronic mails or over the phone while files are just retrieved from databases from wherever you are.

The personality of the change agent is a key influencing factor when it comes to resisting change. A friendly agent with a sense of listening and consideration of employees concerns will meet less resistance as compared to an insensitive agent.

When it comes to leadership, individuals who hold power positions in the current setting may feel threatened by the proposal. This may also attract resistance.

If the impeding change is based on an un-indigenous culture it is most likely to be resisted. People in different countries or regions hold on to particular cultural values; these values reflect in the way business is carried out and it heavily influences organizational culture. If a proposed change comes with a culture that is clearly distinct from the usual, then it will most likely be rejected.

Many of the employees who I interviewed broadly agreed that it would not be easy to accept a change especially if it comes with system automation. The major reason was that they feared loosing their jobs as most of the work would be taken over by machines. Another reason was the ambiguity that would be brought about by unfamiliarity of the new system. They felt that their performance would be greatly affected before they adapt to the changes.

They agreed that by venturing into the global market, the company is likely to be more profitable and most of them said that they would support that only if it did not interfere with their day to day running of their jobs. When asked if they would back the idea of introducing a new line of business, a majority had no problem reason being it would not affect them. The response from almost all interviewees was “I wouldn’t mind, after all it doesn’t affect me in any way”.

About the benefits that they would expect if such a system were to be implemented, they did not seem so sure but one thing that was common to all was a better pay. From the managers’ point of view, the most challenging issue is getting the employees to agree to support the change willingly not by coercion and also they feared the adaptation process as well since they were also used to the old system. The restructuring that would come with the new system may have them shift positions, which was quite overwhelming.

They expected the employees to resist the proposed expansion; and when I wanted to know why, the majority felt that if they in management were a bit scared of what to expect, when they fully understand the benefits of such a process, how about the employees? Weren’t they justified to be more scared? After closely analyzing these outcomes, I came to a conclusion that, what was lacking at Universal Agencies was effective communication.

This however does not guarantee 0% resistance but a significant reduction in the amount of resistive forces making it easier to handle. The management of the inevitable resistance that may arise calls out for the leaders to be equipped with excellent change management skills and a positive attitude to lead by example.

Management of resistance to change

Resistance to change should not only be viewed from the negative perspective; looking at it as an obstacle, but also as an opportunity to receive feedback. This feedback is an invaluable tool when it comes to managing the transition. Pre-planning for the anticipated resistance is one critical factor.

When something is expected, it is well received because the recipient was well prepared to receive it. This implies that, anticipated resistance to change is easily manageable, since the management would be well equipped with all that is needed to handle it. The proposed change should be well communicated to the employees before its inception. They should be made to understand what necessitates the change and what benefits will come with the change, (Kotter, 1998; McShane & Glinow, 2009)).

Also it is very important to discuss the possible challenges that may arise during the transition process and the means to overcome hem in the event that they arise. Another very important aspect is educating the workers on the new procedures that will be used after the modification, (Buchel, 1996).

As the saying goes, ‘knowledge is power’, once the employees are equipped with knowledge on how to go about new procedures, they are in a better position to accommodate the change. Training sessions that include practical lessons where applicable should be held prior to implementation. The empowerment that comes with knowledge acquisition helps eliminate the fear of failure.

Another tactic is involving the employees actively in the change process. If they are part of it, they own it and will definitely support it. They should be mobilized to come out in support of the change by holding free-form open-ended meetings as these will bring a large group of people together.

Employees need to be given support and help them find coping strategies to help manage the stress that comes with change. Some employees may find themselves on the loosing end when changes are made. There needs to be trade offs in such cases and these should be negotiated with the employees affected.

Another approach to change management is action-research. It is an open-systems approach that combines changing attitudes and behavior with testing theory. The process is problem oriented but is based on data. It works by change diagnosis, then introduction of an intervention and evaluation and stabilization of the desired change, (McShane & Glinow, 2009).

The idea of problem solving is what change is wrongly associated with. Appreciative inquiry tries to break this mentality and focuses participants on the positive and achievable thus appreciating the positive organizational behavior philosophy.

Parallel learning structures, is another approach to organizational change. It depends on social structures developed alongside the formal hierarchy with the intention of increasing the organization’s learning. They are highly participative arrangements, made up of people from most levels of the organization, who follow the action research model to produce meaningful organizational change.

Much of the resistance faced during a change process is as a result of emotional factors associated with change. There are four emotional phases in a change process. The first is Denial, where the employees find it hard to believe that things will be done differently. The second stage is resistance which is an outcome of denial. If something is not accepted, then it will be rejected.

The third stage is exploration which comes after the change resistance has failed to stop the change from taking place. Individuals scrutinize their new roles and in this stage all issues that crop up from the change are resolved. Finally we have employees commit to the change. It may not have been in their best of interest but since it happened they had to accept it. But, surprisingly, once it is done and learned, many will start to enjoy it and even prefer the new system to the old one.

Conclusion and Recommendations

Organizational change, for whatever reason is a very challenging process not only to the employees but also to the management. However, employees are worst hit and they view it as a threat to their job security and this is what brings about the resistance that is experienced. Effective communication should be the first consideration whenever there is a change underway.

Having collected and analyzed the findings it is evident that the employees will definitely resist the proposed changes due to some of the factors mentioned earlier. The key contributing factor is the fear of the unknown and the fear of loss. As we have seen effective communication goes a long way in alleviating these fears.

As one of the recommendations, I suggest that the management should organize sessions in which the process of change and its impacts are discussed openly in an open forum with the employees. They should let the subordinates air their views and interpretations of the new system as well as what they expect from it; the challenges and benefits. This will form a ground for the discussion.

As a second recommendation, training sessions should be held preferably at departmental levels. This will help focus on the changes that will affect the operations of the department in particular, hence understand them better. The employees need to be trained on the new work procedures and the use of the automated system that is about to be installed, (Burke, and Bill, 1996)

References

Bandura A. (1986). Social Foundations of Thought and Action: A Social Cognitive Theory. Englewood Cliffs, NJ: Prentice Hall.

Buchel, M. (1996). Accelerating Change, Training & Development.

Burke, W, and Bill, T. (1996). Traveling Through Transitions, Training & Development

Cummings, T. and Worley, C. (2005). Organization Development and Change. United States: Thomson/South-Western.

George, J.M. and Jones, G.R. (2002), Understanding and Managing Organizational Behavior. Upper Saddle River, NJ: Prentice Hall.

Johnson, J. (2002),.11th September, 2001: Will It Make a Difference to the Global Anti-Money Laundering Movement? Journal of Money Laundering Control, Vol.6, No.1, Summer 2002, p.9.

Kieffer, T. (2005). Feeling Bad: Antecedents and Consequences of Negative Emotions In Ongoing Change, Journal of Organizational Behavior, Vol.26, pp.875-897.

Kotter, J.P. (1998). The Leadership Factor, New York: The Free Press.

McShane, S., Glinow, M. (2009).Organizational Behavior. (5th ed.). Irwin, McGraw-Hill. Web.

Miller N. and Dollard J. (1941), Social Learning and Imitation, New Haven, CT: Yale University Press.

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