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Organizational Challenge from Two Perspectives Case Study

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Updated: Jun 14th, 2022

Introduction

In modern conditions, organizational changes represent a prerequisite for maintaining organizational efficiency and competitive advantage, as well as the successful adaptation of business companies to a rapidly changing environment. At the same time, according to expert estimates, about 70% of all ongoing organizational changes fail (McCabe, 2020). Researchers associate these failures not only with mistakes in planning and implementing changes but also with the human factor. It is much more difficult to change the consciousness and behaviour of company employees than technology, equipment, or organizational structure. The presented case clearly shows how errors in personnel management and in building internal organizational processes and communications can lead to critical problems in organizational behaviour and, as a consequence, significant decline in organizational performance.

Key Organizational Development/Change Management Problems

In the process of the evolution of management thought, the concepts of organizational behaviour have also developed. The emergence of the general theory of systems, put forward by von Bertalanffy, led to the formation of a number of concepts within which the organization was viewed as a purposeful, self-regulating, open system. Then, Bernard studied this concept as a system of employee interaction, the life cycle of which depends on its productivity, that is, the achievement of goals and efficiency, by which he understood the degree of satisfaction by the organization of the motives of its individual members (Konopaske et al., 2017). Wiener took a cybernetic approach to the study of social systems, with particular emphasis on the concept of feedback (Konopaske et al., 2017). Woodward viewed the organization as a complex system consisting of two interdependent subsystems: technical and social, as especially evident from the case (Miner, 2015). Other researchers, sharing the concept of socio-technical systems, showed that planning for technological change should be combined with a change in social relations (Miner, 2015). Trist mentioned the necessity to take into account a socio-technical system (Miner, 2015). Technological requirements impose a number of restrictions on the choice of the form of organization, but, on the other hand, the choice should take into account such social and psychological aspects that do not depend on technology. Any attempt to optimize only one of these parameters – technical, social or economic – will not lead to optimization of the system as a whole. In the case under consideration, the combination of these two factors – technical and social – was not satisfactory in the manager’s activity.

Marc, trying to solve the problem of falling productivity and entrenched practice of absenteeism, did not take into account that the organization is a social system in which workers are included in a complex of interpersonal relations and social interaction:

  1. Labour productivity is determined not only by management standards, but also depends on group standards, which may differ from the officially established ones.
  2. Non-financial motivation is often no less significant than economic methods of staff incentives.
  3. Group values and norms are of no small importance; they can differ significantly from the officially accepted ones, but, nevertheless, significantly affect the organizational behaviour of employees.

Meanwhile, today, comprehension of organizational behaviour patterns is closely linked with understanding social interactions. In particular, within the framework of the theory of social action of Weber, organizational behaviour is defined as the result of joint rational actions based on mutual consideration of the interests of the participants in the interaction (Miner, 2015). Neither principles of team work nor building effective communications were addressed by Marc; thus, according to the above-mentioned theory, his actions were wrong and not bringing benefit to the organization.

Marc did not conduct an in-depth analysis of latent processes in the work team, did not consider it necessary to analyse the motivation of employees before hanging on the walls posters with production goals. He tried to look for the reasons for low productivity, problems with contractors, and sabotage in the work schedule, the size of wages, the complexity of work duties, and the unsatisfactory performance of supervisors. Thus, despite his MBA degree, his management bore the character of common sense management of Henry Ford’s era. He did not even apply Maslow’s theory of motivation, and all the more so modern theories of motivation, which he certainly studied. He proposed technical training as a motivation, which, given the existing level of organizational culture and personal system of employee motivation, was inexpedient in the form it was proposed. The potential benefits of receiving this training were not explained to the staff, and it was not of motivational value to them.

In the end, Marc came to the conclusion that informal leader Ayesha was the cause of all the problems in the company, which is partly true. However, he was unable to competently interact with the informal leader and use her potential as a possible agent of organizational change. Marc’s leadership style is a combination of administrative and paternalistic management, which is highly impractical in modern organizations. Below, an attempt is made to formulate potential measures that could be taken to rectify the current situation in the company described in the case.

Potential Measures to Overcome Key Problems

Revealing the profile of the existing organizational culture is an extremely important aspect of the problem of the effectiveness of the implementation of changes. It is known that there are four different models of organizational culture (clan, adhocratic, hierarchical (or bureaucratic), and market) (McCabe, 2020). Moreover, in the literature, six attributes of culture are proposed, according to which the assessment takes place: the principles of intra-organizational relationships and the orientation of people, the general leadership style in the organization, personnel management, which connects the essence of the organization, strategic goals, and criteria for success. The result of the assessment is the formation of organizational culture profiles – “as is” and “as should be” (McCabe, 2020). Marc definitely should conduct such an assessment and develop plan for changing the culture, as it was evidently destructive. If the desired profile is characteristic also of the developed strategic vision of the organization, then culture acts as a catalyst for change; if not, a culture modification plan is required. In this case, such a plan was critically necessary.

There is a misconception that resistance to change is the deliberate actions of employees to make things “as before.” In fact, resistance to change is due to the psychology of human behaviour and is often not even realized by employees themselves (McCabe, 2020). An important conclusion follows from this – people cannot be forced not to resist. A manager cannot order to “live in a new way” – this is the first mistake many implementers make and what Marc did. Using only imperative methods only destabilizes employees, makes their future even more dim, and only adds to the resistance.

Obviously, the deeper and more radical changes are made, the higher the probability of resistance. In any organization, there are always driving and restraining forces. Kurt Lewin suggested that when facing resisting a change or innovation, it is necessary to analyse the factors acting in favour and against this change. After compiling a list of all the factors that could facilitate cooperation, as well as all the factors that could cause resistance to change, the next step, according to Levin, is to analyse the comparative strength of these factors (Raina, 2019). It is important not only to analyse the field of forces, but to identify and classify individual employees of the organization in relation to the changes being made – whether they are supporters or opponents of such changes.

Analysis of potential forces of resistance allows identifying individual members of the organization or those groups in the organization that will resist change, and understand their motives. Attitude toward change can be viewed as a combination of two factors: 1) acceptance or rejection of the change; 2) open or hidden demonstration of attitude to change. Marc should have categorized employees according to the extent of their resistance to change and identify their respective motivations. Moreover, this should have been done not in the process of the changes themselves, but at the stage of their planning. At the same time, it was necessary to analyse the situation in the organization and predict what resistance the proposed change might meet.

The challenge for organizational leaders is to create a climate of trust for top-down proposals that will ensure that most changes are received positively by employees. A decisive role in this can be played by the so-called agents of change – people with a critical and innovative mindset, who like to experiment, can imagine the future, believe that change is possible, and influence others not just talking about change but showing what can be achieved (Raina, 2019). Some will later become new unit managers responsible for new product lines and services, change project coordinators, or trainers and internal consultants to help other people and groups make the necessary changes. In the case under consideration, the proposal for Ayesha about career growth after successful implementation of changes, and even more so discussing with her the possibility of becoming an internal coach, could provide the lion’s share of success. Her leadership qualities and striving to participation are obvious, and this should have been directed in the right mainstream, rather than simply suppressing her destructive activities as an informal leader. With a competent motivation program for Ayesha, using talent management elements, it was possible to turn her hostility into loyalty.

Recommendations for the Current State of the Art

Unfortunately, the above recommendations were not applied, and the result of the implemented changes was far from expected. Moreover, in the current situation, the prospects for the further development of the organization seem negative due to the continuing decline in employee motivation, increased staff turnover, and the futility of “working under the lash.” The informal leader Ayesha is demotivated, and the employees are disengaged and confused. In this situation, it seems expedient to develop and gradually, by stages, introduce a talent management system and move from an administrative-paternalistic to a transformational management style. In view of the current situation with the introduction of an unsuccessful motivation system, administrative pressure on employees and informal leader, lack of understanding of the personal motivation of employees, even transactional management does not seem appropriate. It is necessary to build employees’ loyalty and form a culture of participation.

The goal of any talent definition is to measure performance and expect high results in the future. In the first stage, evaluation is used to identify talented employees. After that, the concept of talent is transferred to the area of measurable values, competencies. This model, called “expectancy theory,” should be linked to the goals and strategy of the organization (Lawler, 2017). Competencies describe what qualities a person should have in a particular position. The most common competencies are the ability to learn, to change, leadership qualities, loyalty, the presence of a value system; it is also worth mentioning professional competencies and skills of effective interaction.

At the first stage, the immediate supervisor conducts a conversation with a subordinate, during which the key goals planned for the next period and the expected results (levels) of their achievement are determined. In preparation for discussion, a draft plan of key goals and expected results for the upcoming period can be drawn up by both the employee and the supervisor, taking into account the tasks and functions assigned to the unit. It should be made in accordance with the established key performance indicators and activity plans. For each employee, up to 3-5 key goals/tasks are optimally set. They can be both quantitative (measurable in absolute or percentage terms) and qualitative (characterize customer relationships, internal operations and technological processes, etc.).

The second stage – the determination of the results of achieving the planned key goals and the level of development of competencies – is carried out both by the employee himself in the course of self-assessment, and by the direct supervisor or manager evaluating him. The results of the assessment are discussed by the supervisor with the employee during an individual conversation, as a result of which the parties must come to an agreement. The employee and/or manager can indicate additional achievements or points that deserve recognition. Only after this stage, is it advisable to offer an individual motivation plan for the employee, including training plan.

Also, in order to achieve a quick result in correcting the current situation and meeting the needs of the informal leader Ayesha in novelty and participation, it seems advisable to introduce some elements of Agile in HR, as far as possible. Naturally, Marc should take into account the specifics of the organization’s activities and the demographic “portrait” of employees. Agile HR is not limited to simply implementing controls and standards to ensure performance of tasks, but rather promotes programs and strategies that improve organizational agility, innovation, collaboration (Dank & Hellstrom, 2020). At the same time, small initiatives are launched directly by the teams or departments themselves. Feedback is immediately collected and determines whether this initiative should be expanded or terminated. In turn, according to Beckhard’s team building principles, it would contribute to raising Agile teams performance, based on trust, clear communication, decision-making authority, sharing values and common vision of clear direction (Konopaske et al., 2017). Moreover, it would contribute to situational models of organization design, according to Woodward (Miner, 2015). Managers must move away from using a single one-size-fits-all approach to management.

Conclusion

The analysis of cases allowed application of organizational behaviour and change theories, as well as approaches to motivation. Lewin’s change management theory, Beckhard’s team building principles, Woodward’s theory of organizational design, Trist’s model of socio-technical system, Lawler’s expectancy theory, as well as Weber’s theory of social action became a basis for developing appropriate recommendations. It was suggested that the core problem in the actions of manager in the case under consideration is lack of system thinking, that is, understanding organization as an integrity of technical and social elements, and using management and motivation principles of industrial era, which are evidently obsolete today. It is recommended to rebuild the system of employees motivation based on greater understanding of their needs for development, communication, and other social needs. It is proposed to engage informal leader in the process of changes as the agent of change, thus turning her hostility into loyalty by providing her with the possibility to realize her leader potential. Moreover, Agile approach in overall HR practices can contribute to building the culture of participation.

References

Konopaske, R., Ivancevich, J., & Matteson, M. (2017). Organizational behavior and management. McGraw-Hill Education.

Lawler, E. (2017). Reinventing talent management: Principles and practices for the new world of work. Berrett-Koehler Publishers.

McCabe, D. (2020). Changing change management: Strategy, power and resistance. Routledge.

Miner, J. B. (2015). Organizational behavior 4: From theory to practice. Routledge.

Dank, N., & Hellstrom, R. (2020). Agile HR: Deliver value in a changing world of work. Kogan Page.

Raina, R. (2019). Change management and organizational development. SAGE Publications.

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IvyPanda. 2022. "Organizational Challenge from Two Perspectives." June 14, 2022. https://ivypanda.com/essays/organizational-challenge-from-two-perspectives/.

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