Have you ever heard the expression: \"If you\'re not measuring it, you\'re not m

Question

Have you ever heard the expression: "If you're not measuring it, you're not managing it?" In this discussion, you will determine how you would measure the results of an intervention. Select an intervention with which you have some experience. For example, have you experienced organizational restructuring or downsizing? Does the company you work for have a total quality management program? Have you participated in a training program that was designed to "fix" an organizational problem? Once you selected an intervention, review the chapter that addresses that intervention.

1. Describe the intervention you have selected.  

2. Put yourself in the role of the leader/sponsor of this intervention. How would you measure the effectiveness/results of this intervention? Speak in specific, measurable terms.

3. What actions would you take if the intervention were not getting anticipated results?

Explanation / Answer

Downsizing refers to the permanent reduction of a company's workforce and is generally associated with corporate reorganization, or creating a "leaner, meaner" company.

Downsizings such as these are also commonly called reorganizing, reengineering, restructuring, or rightsizing. Regardless of the label applied, however, downsizing essentially refers to layoffs that may or may not be accompanied by systematic restructuring programs, such as staff reductions, departmental consolidations, plant or office closings, or other forms of reducing payroll expenses. Corporate downsizing results from both poor economic conditions and company decisions to eliminate jobs in order to cut costs and maintain or achieve specific levels of profitability. Companies may lay off a percentage of their employees in response to these changes: a slowed economy, merging with or acquiring other companies, the cutting of product or service lines, competitors grabbing a higher proportion of market share, distributors forcing price concessions from suppliers, or a multitude of other events that have a negative impact on specific organizations or entire industries.

DOWNSIZING AND RESTRUCTURING

Downsizing generally accompanies some kind of restructuring and reorganizing, either as part of the downsizing plan or as a consequence of downsizing. Since companies frequently lose a significant amount of employees when downsizing, they usually must reallocate tasks and responsibilities. In essence, restructuring efforts attempt to increase the amount of work output relative to the amount of work input. Consequently, downsizing often accompanies corporate calls for concentration on "core capabilities" or "core businesses," which refers to the interest in focusing on the primary revenue-generating aspects of a business. The jobs and responsibilities that are not considered part of the primary revenue-generating functions are the ones that are frequently downsized. These jobs might then be outsourced or handled by outside consultants and workers on a contract basis.

Eliminating non-core aspects of a business may also include the reduction of bureaucracy and the number of corporate layers. Since dense bureaucracy frequently causes delays in communication and decision-making, the reduction of bureaucracy may help bring about a more efficient and responsive corporate structure that can implement new ideas more quickly.

Besides laying off workers, restructuring efforts may involve closing plants, selling non-core operations, acquiring or merging with related companies, and over-hauling the internal structure of a company. The seminal work on restructuring or reengineering, Reinventing the Corporation, by Michael Hammer and James Champy, characterizes the process as the "fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance such as cost, quality, service, and speed." While discussion of reengineering is common and reengineering is often associated with downsizing, Hammer and Champy argue that reengineering efforts are not always as profound. Hence, these efforts frequently have mixed results.

Downsizing and reengineering programs may result from the implementation of new, labor-saving technology. For example, the introduction of the personal computer into the office has facilitated instantaneous communication and has thus reduced the need for office support positions, such as secretaries.

CRITICISM OF DOWNSIZING

While companies frequently implement downsizing plans to increase profitability and productivity, downsizing does not always yield these results. Although critics of downsizing do not rule out the benefits in all cases, they contend that downsizing is over-applied and often used as a quick fix without sufficient planning to bring about long-term benefits. Moreover, downsizing can lead to additional problems, such as poor customer service, low employee morale, and bad employee attitudes. Laying workers off to improve competitiveness often fails to produce the intended results because downsizing can lead to the following unforeseen problems and difficulties:

Change is one of the most critical aspects of effective management. Change is the coping process of moving from the present state to a desired state that individuals, groups and organizations undertake in response to dynamic internal and external factors that alter current realities.

Increasingly, organizations that emphasis bureaucratic or mechanistic systems are ineffective. Organizations with rigid hierarchies, high degree of functional specialization, narrow and limited job descriptions, inflexible rules and procedures, and impersonal management can’t respond adequately to demands for change. Organizations need designs that are flexible and adaptive. They also need systems that both require and allow greater commitment and use of talent on the part of employees and managers. Why is change important to managers and organizations? Simply stated, organizations that do not bring about timely change in appropriate ways are unlikely to survive. One reason that the rate of change is accelerating is that knowledge and technology feed on themselves, constantly creating innovations at exponential rates. Few business leaders would have envisioned in the mid-1990s, the revolutionary impact the Internet and World Wide Web would have on business practices in the early twenty-five century.

THE IMPORTANCE OF CHANGE:

Change will not disappear or dissipate. Technology, an everexpanding list of applications and the spontaneous combustion of creative thoughts will maintain their ever-accelerating drive onwards. Managers, and the enterprises they serve, be the public or private, service or manufacturing, will continue to be judged by their ability to effectively and efficiently manage change. Unfortunately for the managers of the early twenty-first century, their ability to handle complex change situations will be judged over ever decreasing time scales.

The pace of change has increased dramatically; mankind wandered the plant on foot or in horseback for centuries before the invention of the wheel and its subsequent ‘technological convergence’ with the ox and horse. In other ‘short’ century man has flown a heavier-than-air aeroplane, piloted spacecraft, and walked on the moon. Satellites orbit the earth, the internal combustion engine has dominated transport and some would say society moves; robots are a reality and state-of-the-art manufacturing facilities resemble scenes from science fiction movies; your neighbour or competitor, technologically speaking, could be on the other side of the planet; and bio-technology is the science of the future.

TYPES OF CHANGE :

(i) Happened Change: This type of change is rather unpredictable and takes place naturally due to external factors. It is profound and traumatic for it is out of direct control and produces a future state that is largely unknown. This type of change occurs when an organization reaches a plateau in its lifecycle and falls prey unwisely to demand from the environment. For example, currency devaluation, over which it has no control, adversely affects the business of a company that has to import its raw materials. Some political and social changes are also unpredictable, as was the case in India during Indira Gandhi’s years of Emergency.

(ii) Reactive Change: Changes that are clearly in response to an event or a series of events are termed reactive changes. Generally, most companies are engaged in reactive, often incremental change. These changes are attempted when the demand for a company’s products/services registers an increase or decrease, or a problem/crisis occurs or develops. Technological changes, for example, force the organization to invest in modern technologies. The incorporation of the latest technology could be in reaction to the increased demand for the product. Incremental changes, made in response to external forces and limited to a subsystem or a part of the subsystem, are adaptive in nature. Recreation is also a reactive change, but it involves the organization in its entirety, and occurs when the organization is undergoing severe crises.

(iii) Anticipatory Change: Change carries out in expectation of an event or a series of events is called anticipatory change. Pepsi recently announced that it would invest $750 million over the next five years for its operations in Mexico. Pepsi, which began its operations in Mexico in 1938, had a 31% market share of Mexican cola sales and plans to improve this figure. Organisations, in terms of their anticipation, may tune in or reorient themselves to future demands. Tuning-in would involve making incremental changes (dealing with a subsystem or a part of the system) in anticipation of external events. Reorientation is moving from ‘here’ to ‘there’ in anticipation of a changing environment. It involves changing the organization from the existing state towards a desired future state, and managing the transition process.

(iv) Planned Change: Planned change or developmental change is undertaken to improve upon the current way(s) of operating. It is a calculated change, initiated to achieve a certain desirable output/performance and to make the organization more responsive to internal and external demands. Enhancing employees’ communication skills and technical expertise, building teams, restructuring the organization, introducing new technologies, introducing new products and services, challenging the incentive system, improving employee welfare measures, and the like fall into this category. This type of change, where the future state is being consciously chosen, is not as threatening. However, it does require system/subsystem level (techno-social) support to survive.

(v) Incremental Change: Change directed at the micro level and focused on units/subunits/components within an organization are termed as incremental changes. Changes are brought in gradually and are usually adaptive in nature. It is assumed that those small changes will set in process the large change and lead the system slowly in a healthier direction. It also provides the organization an opportunity to learn from its own experience. A failed incremental change will cause less damage to the total system than an unsuccessful large-scale change.

(vi) Operational Change: This is necessitated when an organization needs to improve the quality of its products or services due to external competition, customers’ changing requirements and demands, or internal organizational dynamics. Improvement of production and service capabilities could center on quantity, quality, timeliness, cost savings and other such factors. The organisation’s goals remaining the same intended change forces organizations to consider how to improve existing operations in order to perform better. Operational changes include bringing in new technology, re-engineering the work processes, quality management, better distribution and delivery of products and enhancing interdepartmental coordination.

(vii) Strategic Change: Change that is addressed to the organization as a whole or to most of the organisation’s components including strategy may be called strategic change. An example could be a change in the organisation’s management style. Toyota has recently taken steps to change its overall corporate management philosophy in an attempt to create an organization which is less hierarchical, is leaner, flexible, decentralized, and which allows itself a considerable degree of autonomy. This move by Toyota will affect the entire organization and will influence its performance.

(viii) Directional Change: A change in direction may become imperative for an organization due to severe competition or regularly shifts in government policy and control (for example, on pricing, import/export restriction, etc.). Directional change is also critical when the organization is developing a new strategy or is incapable of executing effectively its current strategy. R & D activities, competitive analysis, information management and adequate management control system could facilitate the question of ‘quo vadis’ or where the organization is headed.

(ix) Fundamental Change: This entails a redefinition of the current purpose or mission of the organization. It may be necessitated by drastic changes in the business environment, the failure of the current corporate leadership, problems with employee morale, or a sharp fall in turnover.

(x) Total Change: For total change, the organization is constrained to develop a new vision, and a strong link between its strategy, employees and business performance. The organization has to achieve a turnaround or perish. Total change is necessary to extricate the organization from the rot that has set in due long-term failure of business, employee-organisation value incongruence, estrangement of operators from the reality of the business environment, and concentration of power in the hands of a few people who could be furthering their personal interests at the cost of the organization. A new vision and drastic surgery could be the only way out for the organization. The dramatic debacle of Arthur Anderson is a case in point.

FORCES OF CHANGE

Forces of Change Stemming From External Environment

1. Political Forces

2. Economic Forces

3. Technological Forces

4. Government Forces

5. Increased Global Competition

6. Changing Customer Needs and Preferences

Internal Forces for Change:

1. System Dynamics

2. Inadequacy of Administrative Processes

3. Individual/Group Speculations

4. Structure Focused Change

5. Technological Changes

6. Persons Focused Change

7. Profitability Issues

8. Resource Constraints

ORGANISATIONAL CHANGE: SOME DETERMINING FACTORS

A few decades ago, advances in machine technology made farming so highly efficient that fewer hands were needed to plant and reap the harvest. The displaced labourer fled to nearby cities, seeking jobs in newly opened factories, opportunities created by some of the same technologies that sent them from the farm. The economy shifted from agrarian to manufacturing, and the Industrial Revolution was underway. With it came drastic shifts in where people lived, how they worked, how they spent their leisure time, how much money they made and how they spent. Today’s business analysts claim that we are currently experiencing another industrial revolution– one driven by a new wave of economic and Technological Forces.

A. Planned Internal Change

B. Planned External Change

C. Unplanned Internal Changes

D. Unplanned External Changes

SUMMARY

Organisational change is the movement of an organisation away from its present state and toward some future state to increase its effectiveness. Forces of organisational change include competitive forces, economic, political and global forces, demographic and social forces, and ethical forces. Organisations are often reluctant to change because resistance to change at the organisation, group, and individual levels have given rise to organisational inertia. The more an organisation changes, the easier and more effective the change process becomes. Developing and managing a plan for change are vital to an organisation’s success.

KEYWORDS

Organisational change: The process by which organisations move from their present state to some desired future state to increase their effectiveness.

Evolutionary change: Change that is gradual, incremental and specially focussed.

Revolutionary change: Change that is sudden, drastic and organisation wide.

External change agents: People who are outside consultants who are expert in managing change.

Internal change agents: Managers from within the organisation who are knowledgeable about the situation to be changed.

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