One problem with implementing changes was identified by the Hay Group, who found that 49 of 65 merged companies surveyed said they failed to place employees in the right roles in the first six months after merging. The way terminated employees are treated during and after the downsizing process has a dramatic effect on the survivors’ attitudes and commitment. “The downsizing process should be conducted in a manner which allows the organisation’s corporate culture to reinforce the company’s values”. This can be crucial to management as it is a necessity that their employees are in the right roles. However, the research does not show how management can recognise if an employee is in the correct role and so it would not help the management; it only tells management that they need to do this.
Culture addresses individual and organisational beliefs and values, two elements which are among the most difficult to change. This explains why merging two company’s cultures can be so difficult to manage. Observations by knowledgeable business journalists and findings produced by empirical researchers believe the failures of a merger are down to the fact that the cultures are incompatible. Tetenbaum’s empirical research does aid the management of change to a degree. The journal looks at the reasons why mergers go wrong in companies and the most common reasons for merger failure. This information can aid management as they know what factors to look for and what areas to implement, such as creating an integration team that focuses solely on integrating the two organisations. However, the research does not illustrate how to effectively analyse an organisation’s culture and help management decide on whether their culture is compatible with another organisations and so it does not aid the management of change in this sense.
The commitment of employees is also a crucial area for management to understand when implementing a change initiative. Mowday, Steers and Porter 1979 defined commitment as “the degree of identification and involvement that individuals have with their organisation’s missions, values and goals”. Western organisations have tried to obtain the degree of commitment shown by Japanese organisations. However, the Japanese culture is far different to Western culture. Most crucially, commitment is a two way process; managers are also committed to their employees (Pascale and Athos, 1981, p 191). This theory does not help management as it only states what other organisations have, and it does not suggest what they can change in order to gain what others have.
Commitment is linked clearly to the attitudes of employees in organisations. Attitudes have three components (Mckenna, 1994, pp.251, 287), which are: belief, feeling, which is also known as an affective attitude, and action. The affective attitude is an individual’s emotional attachment to an organisation and links to the commitment that employees have towards an organisation. If this theory could be linked with showing how management can input this attitude into employees it would be very beneficial to management when implementing a change initiative. However, the theory only states the three different attitudes that employees have. The action attitude relates to an element of commitment known as ‘continuance’, which is an individual’s need to continue to work for an organisation, due to factors such as the costs and risks associated with leaving the firm. If research into this could suggest how management could change an employee’s attitude from continuance to affective, management would gain the employees commitment which would ultimately help the organisation when implementing changes, as Meyer et al (1989) found that workers “high on affective performed better”, but the opposite pattern of results was found for continuance commitment.
Measuring the commitment of an employee has its implications as one individual’s commitment will be because of reasons different to those of other individuals. Mowday et al (1979) developed the Organisational Commitment Questionnaire (OCQ) to measure employee’s commitment. The questionnaire focuses on the affective commitment, which is important to managers, yet managers also need to know about continuance commitment so that they can recognise it in employees and make appropriate decisions.
David Guest believes that critical writers on HRM such as Keenoy and Legge use empirical research to “suit their own agendas” (Storey 2001, p.21). Guest (1997) has pointed out that there is no consistency in the theorizing of HRM. Storey states that there is lack of agreement about what “high commitment/performance practices should comprise and their appropriate specification” (Storey, 2001, p. 25). Relating to empirical research there is also confusion on the relationship between HRM and performance. Becker and Gerhart (1996) analysed five empirical studies into the subject and found out of 27 practices not a single one was found to have the same work practices. Even when there is some degree of agreement on the relationship between commitment and performance, there may be no agreement on its measurement. For instance MacDuffie’s (1995) and Arthur’s (1992) concept on contingency pay is the same; however they both measure it in different ways.
Corbett’s (1994) study into becoming a torturer relates to the commitment of employees in that it states the three situational factors of becoming a torturer are also common in many management development and employee socialisation programmes in large business organisations. The compliance that employees go though in training when joining a company is similar to the training a torturer will go through in order to join the group. The compliance that the torturers have in essence is the same as the compliance that employees have and vice versa as they both go through the three main situational factors before becoming a member of the organisation or group and then developing their commitment for the group. The secrecy that the torturers keep in their work increases the torturers’ strong identification with colleagues and conformity to the will of the group. This relates to management change as the commitment that employees have towards their organisation will be seen to be the same for most individuals in different situations. It can aid management in that they can develop the commitment of their employees before a change initiative is decided.
Research carried out by Strebel (1996) suggests that unless managers define the new terms of change and persuade employees to accept them, it is “unrealistic for managers to expect employees to fully buy into changes that alter the status quo”. (Strebel, 1996, 87). An individual’s commitment is closely connected to their belief in their manager’s “willingness to recognise a job well done” (Strebel, 1996, p. 88). Strebel states that in a major change program, a “manager’s sensitivity to this dimension of their relationship with their subordinate is crucial in gaining commitment towards new goals and objectives” (Strebel, 1996, p. 88). This suggests that when implementing a major change initiative, managers need to be aware of their subordinates and acknowledge when a job has been done well, otherwise the employee may not commit to new objectives when management has decided to change the organisation’s objectives. This empirical research can support the management of change in making sure that the employee’s commitment is kept high by recognising their efforts. Also before a change initiative is implemented, the management should inform the employees of change and make sure that they understand the new objectives.
Leadership is an area which if analysed and evaluated properly could give a significant advantage to the management of change. There are many different theories on leadership and different suggestions on how a manager should lead.
(Senior, 2002, p. 222) gave a summary of the differences between leading and managing and one of the differences was that leadership produced change successfully and also communicated the organisation’s goals to the employees, whereas management input structures for the staff to work around and produce consistent results which the stakeholders expect. The two contrasting theories could suggest that leadership is a more effective when implementing a change initiative as it induces change in values, using personal examples and expertise. Leadership also strives to transform the culture which as already discussed can have a profound effect if implementing a change initiative.
Tannenbaum and Schmidt’s (1973) theory of leadership takes into account situational factors of the organisation and does not presume that there is ‘one best way’ of leadership. They suggest that a leader should move along the continuum between telling employees what to do and listening to employees. They believe a leader should select the style that is most appropriate in the situation. This theory can be said to be broader in its approach and does not presume that there is one best way to manage in every situation. This method can relate to the Japanese culture of a two way commitment by means of the manager listening to the employees as well as telling them what to do, which in turn relates to commitment. As suggested by Strebel (1996), if the employees feel like their voices are being heard then their commitment to the organisation will grow.
Bass (1990) introduced the dimensions of transformational leadership. One of the dimensions analyses the way the leader communicates high expectations to the employees and how symbols are used to focus efforts, which relates to Tetenbaum’s article and how you can integrate two cultures. This dimension of transformational leadership can aid the management of change to a degree as it relates to culture and commitment and can to an extent, ensure the organisation successfully develops through a period of change. It is however, not clear whether transformational leadership is the most recent leadership behaviour to be recommended to managers whatever the situation of their organisation. Ekvall and Arvonen believe that transformational leadership is most appropriate to be used in conditions of change. This suggests that transformational leadership would aid the management of change; however there are many negative aspects of transformational leadership. For example Metcalfe (2001) empirical research suggests that the notion of leadership is only accessible to top level leaders as the US models on leadership are based on top level managers.
Although the literature suggests many different methods of how to lead and how to act in certain situations, the literature does not answer the question of how to aid the management of change. Each organisation is different and so different aspects of leadership will be required to suit each organisation and in each different situation that arises. This is illustrated by Yukl’s empirical research.
Yukl (1999) examined four of the two-factor models; Task versus Relations leadership, Autocratic versus participative leadership, Leadership versus Management and Transformational versus Transactional Leadership in order to illustrate the continuing trend of favouring simplistic theories. Yukl’s conclusion was that these theories “oversimplify a complex phenomenon and encourage stereotyping of individual leaders” (Yukl, 1999, p.34). He believes that for these theories to be effective they need to be mixed with elements of other theories.
Yukl’s research on the popularity of the two-factor conceptions of leadership carried out in 1996 found that none of the two-factor models discussed explained an adequate amount of variance. A three-factor model including Task-oriented behaviour, Relations–oriented behaviour and Change–oriented behaviour worked better, however, it only accounted for 55% of the item variance. The study provides positive examples of efficiency-orientated versus change oriented behaviour to replace other theories such as bureaucratic manager versus inspirational leader. The research showed that most managers used a mix of the different behaviours.
This empirical research can aid the management of change to a certain degree as it suggests that the models on leadership are too narrow and oversimplify leadership, which in turn will help managers look at a variety of different models and then use different management styles to suit different situations. In a period of change the management would not focus on one particular style, neither would they only focus on transformational leadership as Yukl’s research suggests that this theory is not broad enough. However, the research does not suggest which are the most beneficial leadership styles to implement in times of change and so management would have to analyse the situation and make their own decisions.
Collins (2001) empirical research concludes how Anti – heroic leadership is beneficial to a company and how this type of leadership can change a company from a good to a great company. Collins (2001) research identifies the drivers of change from a good to great company. The key factor found for this consistent transformation is Level 5 leadership. Level 5 leadership builds greatness through personal humility and personal will. This empirical research illustrates how level 5 leaders from different organisations changed the company from a good to great organisation successfully. The research shows that “Good to great transformations don’t happen without Level 5 leaders at the helm” (Collins, 2001, p.68).
The research into George Cain’s success with Abbott Laboratories gives insight into successful change initiatives. Cain was a typical Level 5 leader and his first task was to “destroy the root causes of Abbott’s middling performance: nepotism” (Collins, 2001, p.72). Cain recognised that Abbott’s management was one of the problems for the company’s average performance. Another compelling element of the research found that Level 5 leaders have ambition not for themselves but for their companies and so they routinely select superb successors. This empirical research evaluates the typical attributes that managers have which allow them to implement change successfully. However, the research did not conclude how managers can learn to become a Level 5 leader and so cannot aid the management of change other than determining whether managers are Level 5 leaders or not.
The research does not define the qualities required of a level 5 leader other than a broad definition of an “individual who blends extreme humility with intense professional will” (Collins, 2001, p.68) and in this sense it does not aid the management of change.
The final topic to critically illustrate is downsizing. This has already been linked to both culture and commitment and is an important aspect that management need to understand if they want to implement such a change. Downsizing has been defined by Kozlowski et al (1993) as:
“A deliberate organisational decision to reduce the workforce that is intended to improve organisational performance”
The literature on downsizing focuses on reducing the impact downsizing has on employees, methods to reduce the resistance the employees have to this change and the merging of organisations and the resulting downsizing that takes place. Theories on job insecurity, equity theory and organisational stress can be used to indicate human resource interventions to manage the process of downsizing more effectively and help to reduce the resistance to change. However, if this did help reduce the resistance to change then a higher percentage of mergers would be successful. Research by Lazarus and Folkman 1984 on stress has provided research showing how individuals employed in organisations that have proven to be supportive in the past may appraise changes as less threatening and so their level of resistance is decreased. This does aid the management of change to a degree as it states what reduces the employees’ resistance, although it does not state how to implement supportive action and the key factors that prove an organisation is supportive which will increase the employees’ commitment.
Empirical research carried out by Thornhill (2000) attempts to link downsizing and redundancy practices. Thornhill established two models of organisational change; convergence and reorientation. Convergence is a period of time when change is incremental and the organisation seeks to improve the quality of their products or service. Reorientation occurs over a short period when “change is transformational and there is a need to manage a fundamental redirection strategy” (Freeman and Cameron 1993).
The models are useful in the way that they can help predict the type of approach required for the forthcoming period of change where the characteristics of change can be recognised and so managers can use this by knowing when a period of change is about to progress. In knowing this, managers can decide what characteristic of leadership to implement in that situation. This can then therefore aid the management of change. However, the model does not consider all of the factors that are required if management are to implement a change. If empirical research is to aid the management of change all factors need to be addressed in order for the change to be a success. This means taking into consideration the organisation’s culture, employees’ commitment and then deciding on a leadership style to use. If these areas are addressed then a change such as downsizing an organisation can be done effectively, without changing the attitudes of the surviving employees.
Shaw and Barrett-Power (1997), p.113) recognised a relationship between downsizing strategy and survivors’ reactions and believe there is a “need to find a measure of downsizing effectiveness which includes survivor reactions” (Shaw and Barrett-Power, p. 113). Adams (1965) Equity theory has been used to evaluate the effects of employee perceptions on management decisions related to the downsizing process. Survivors’ reactions are likely to be affected by their level of acceptance in areas like prior notification of downsizing by management and the selection of criteria used (Brockner, 1992). Perception of equity about management decisions related to these aspects can thus reduce survivors’ negative reactions.
Survivors who performed better and were more committed to their organisation were also those that “felt that they had highly supportive line managers” (Thornhill, 2000, p. 267).This can aid management because they know how survivors’ will be affected and so if a downsizing decision was made the managers would know to inform employees about this decision and give reasons for the decision. The reasons why the empirical research will not aid the management of change is because, like the literature, the empirical research states the reasons why situations occur and the problems faced, however, it does not show management exactly how to implement changes in a step by step process. This may be due to the fact that each situation is different for each organisation and so for management to be told precisely how to implement a change, a review of the individual organisations would be required.
In conclusion, having reviewed the evidence on areas such as culture, commitment, leadership and downsizing, it appears that empirical research can aid the management of change to a certain degree. Balogun and Hope Haileys (2004) report a failure rate of 70% of all change programmes initiated, which itself suggests that research into the management of change has not been successful. By carrying out empirical research on management change, new theory can be developed which would aid the management of change.
The empirical research discussed in this article does not provide a structured format that managers can follow in order to implement change initiatives effectively. The research does show areas that management need to look at, such as introducing an integration team when merging organisations or considering survivors’ attitudes when downsizing; however, the research does not aid the management of change in that it does not conclude how to implement the ideas that the research found.
References
Journals
Alimo-Metcalfe, B. and Alban-Metcalfe, J (2001). The development of a new transformational leadership questionnaire, Journal of Occupational and Organisational Psychology, 74, 1, pp 1-27.
Brockner, J. (1992), Managing the effects of layoffs on survivors, California Management Review, Winter, pp. 9-28.
Collins, J. (2001). Level 5 leadership: the triumph of humility and fierce resolve, Harvard Business Review, 79, 1, pp. 747-767.
Freeman, S.J. and Cameron, K.S. (1993), Organizational downsizing: a convergence and reorientation framework, Organizational Science, 4, 1, pp. 10-29
Guimaraes, T. and Armstrong, C. (1998) Empirically testing the impact of change management effectiveness on company performance, European Journal of Innovation Management, 1, 2, pp. 74-84
Kozlowki, S.W., Chao, G.T., Smith E.M. and Hedlund, J. (1993), Organizational downsizing: strategies, interventions and research implications, in Cooper, C.L and Robertson, I.T (Eds), International Review of Industrial and Organizational Psychology, John Wiley & Sons, New York, NY, pp. 263-332.
Moran, J. W. and Brightman, B. K. (2001) Leading organizational change, Career Development International, 6 (2), pp. 111-118.
Pascale, R.T. and Athos, A,G. The Art of Japanese Management. Simon and Schuster, N.Y., 19:8 I.
Shaw, J.B. and Barrett-Power, E. (1997), A conceptual framework for assessing organizational, work groups and individual effectiveness during and after downsizing, Human Relations, 50, 2, pp.109-27
Strebel, P. (1996). Organizations have personal compacts with their employees. Change efforts will fail unless those compacts are revised: Why Do Employees Resist Change? Harvard Business Review, 74, 1, pp. 86-92.
Tetenbaum, T. (1999). Beating the Odds of Merger and Acquisition Failure: Seven Key Practices that Improve the chance of Expected Integration and Synergies, Organisational Dynamics Autumn
Thornhill, A. and Saunders, M.N.K. (1998). The meanings, consequences and implications of the management of downsizing and redundancy: a review. Personnel Review, 27, 4, pp.271-295.
Todnem, R. (2005). Organisational Change Management: A Critical Review, 5, 4, pp. 369 – 380.
Yukl, G. (1999). An evaluative essay on current conceptions of effective leadership, European Journal of Work and Organizational Psychology, 8, 1, pp. 33-48.
Books
Arnold, J., Cooper, C.L. Robertson, I.T., (1998) Work Psychology: Understanding Human Behaviour In the Workplace 3rd edition. (London: Financial Times).
Balogun, J and Hope Hailey, V. (2004) Exploring Strategic Change, 2nd edition (London: Prentice Hall).
Burnes, B. (2004) Managing Change: A Strategic Approach to Organizational Dynamics, 4th edition (Harlow: Prentice Hall).
Corbett, J.M., (1994) Critical Cases in Organisational Behaviour. (London: Macmillian)
Deal, T. & Kennedy, A. (1982). Corporate cultures: The rites and rituals of corporate life. Reading, Ma: Addison-Wesley.
Price, A (2004) Human Resource Management in a Business Context 2nd edition. (London: Thomson Learning)
Senior, B, 2002, Organisational Change, 2nd edition, (Essex: Pearson Education Limited)
Storey, J (2001) (ed.) Human Resource Management: A Critical Text 2nd edition. (London: Thomson Learning)
