Resistance to change in a small state run organisation

To implement a change in this setting it is necessary to influence the forces involved. According to Lewin it would be more effective to lower the barriers to change than to enhance the driving forces. If the barriers are lowered the drivers for change will become effective and push the change forward. In this view organisational change is a three step process. First, it is necessary to unfreeze the status quo to generate any movement. If the forces are effectively influenced then change will occur, but it must be managed and controlled to reach the desired state. Since the theory is based on the idea of equilibrium it is necessary to re-freeze the organisation again after the move to stabilise the change and prevent the system to revert to another equilibrium.

According to the planned change model the first step in the change process is a managerial consent for the implementation of change. The change is made to improve organisational effectiveness, and the values of management determine what point is preferred to the status quo and why. The driving forces are therefore typically managerial objectives and the opposition to change lies with the agents intended to carry it out or employees affected by the change. 

The different interests within an organisation are captured by the definition of Buchanan and Huczinsky of the organisational dilemma or how an organisation can “reconcile the potential inconsistency between individual needs and aspirations on the one hand and the collective purpose of the organization on the other.” In a similar vein, Beer and Nohria (2000) describe two archetypes of change efforts reflecting different underlying managerial values regarding the objectives of the change and criteria for corporate success. One is the harder version where organisational change has the main objective of increasing economic value. The softer version aims at increasing organisational capability through developing company culture and individual commitment to corporate objectives.

2. The OD method of administering organisational change

A. OD definitions and objectives

OD is a set of ideas that views organisational change as a systematic managerial process. The theories of planned change are central to OD as well as a humanistic approach. The values that are inherent in OD tilt its efforts to the Beer and Nohria’s (2000) soft archetypes of change, and propose a solution to the organisational dilemma where respect for individual needs and quality of working life is held in high regard. OD developed from a tradition where more emphasis was put on ‘people problems’ and behavioural aspects within organisations than on productivity, but more recent developments have aimed at incorporating both aspects into the paradigm. OD tries to incorporate the “joint values of humanizing organizations and improving their effectiveness.” 

Organisation Development is defined by Cummings and Worley (1993) as: “A system wide effort applying behavioral science knowledge to the planned creation and reinforcement of organizational strategies, structures, and processes for improving an organization’s effectiveness.” Another definition is that “OD is an effort (1) planned, (2) organization wide, and (3) managed from the top, to (4) increase organization development and health through (5) planned interventions in the organization’s process’, using behavioural science knowledge.” 

The humanistic orientation of OD means that it does not only provide a theory of how to move organisations from on equilibrium point to another, but it also gives the direction and a criteria to evaluate what scenario is preferred to the status quo. Although change is seen as a planned process led by a managerial decision making process, the decisions should have the objectives to “improve the effectiveness of the human side of the organisation by focusing on groups and teams.” It is assumed that “increased worker autonomy and participation in work related decisions leads to a more satisfied and therefore more productive workforce” OD is therefore “an approach which cares about people and which believes that people at all levels throughout an organisation are, individually and collectively, both the drivers and engines of change.”

The values underpinning OD efforts are stated by Stephen Robbins (1986) as:

• “The individual should be treated with respect and dignity
• The organization climate should be characterized by trust openness and support
• Hierarchical authority and control are not regarded as effective mechanisms
• Problems and conflicts should be confronted, and not disguised or avoided
• People affected by change should be involved in its implementation”

The OD method therefore proposes a method of change that is collaborative, supported by those affected as opposed to a coercive or authoritarian implementation of managerial decisions.

B. Overcoming opposition to change

The viewpoint of OD is based on the concept that there is inherent resistance to change in the organisational system. The OD change model aims at affecting the forces of change in a manner consistent with its philosophy. Furthermore, the resistance to change can be viewed as an unhealthy force that must be overcome to achieve the intended results. Marshall T. Egan (2002) identified the 10 main objectives for OD. Among them are:

 

A healthy organisation is one that welcomes change, supports learning and development of individual abilities. Furthermore a successful OD programme should create an organisational culture that solves its own problems and adapts readily to changes in managerial wishes and the environment. In this sense the objective of implementing change is to create a learning, dynamic organisation with a higher quality of working life for individuals.

The objective of an OD programme is therefore to overcome the forces opposing change. The basic change model is based on the three step Lewin model of unfreezing, moving and refreezing. A more general OD model is put forth by Cummings and Worley (1993) where they describe the change process in the following steps:

• Entering and contracting
• Diagnosing
• Planning and implementing change
• Evaluating and institutionalising change

For our purposes we will concentrate on the steps of diagnosing and planning and implementing and its significance for the opposition to change.

Diagnosing:

In order to find the right remedies for the intended organisational change, a change agent must diagnose the organisation and gain an understanding of the internal dynamics within the system. The diagnosis can be on a structural level, group level or individual level. On the basis of the diagnosis the change agent should have information to realise if the amendments to the organisational structure, group behaviour or individual task design could help the organisation to become more effective and the individuals within the organisation to lead a more fulfilled working life.

To maintain a collaborative approach and atmosphere it is important that the change agent builds the knowledge on methods that are participative and respected by the individuals of the organisation and then shares the findings in an atmosphere of trust and openness. Such collaboration by the change agent helps to build a shared understanding and common vision for the prospective change proposal.

Planning and implementing change:

The collaborative diagnosing phase should define what tasks must be solved in the change process. A condition for a change to go ahead is that the situation can be unfrozen from the status quo. Below is a table showing the typical forces affecting change in an organisation.  

The table shows that opposition to change can be caused by the perceptions individuals have about their position within an organisation. Individuals know what they can not be certain about their future positions after a change proposal has been implemented.

 

The change agent’s objective in the preparation and planning of the change is to build a shared vision and generate support for the plan from organisation members. OD interventions must be based on choices that are informed and taken without coercion. The change programme must also create an internal commitment to these choices.

A successful preparation of change must therefore be based on a thorough understanding of how individuals and groups are affected by the proposed change programme, and how they perceive their relative position after the change.

3. The case of a small state run organisation

A. A brief description of the organisation and its environment

The organisation studied (from now on called Q) holds a state monopoly to supply a consumer good in a small European country. Q is one of the largest companies in the country measured by profits, but it is none the less a small organisation with fewer than 40 employees.

Q was established in the 1930’s and the state monopoly guaranteed stability. External circumstances have however changed in the last 20 years as new technologies have introduced substitute products and regulatory changes have weakened the monopoly market protection. The resulting decline in financial performance triggered managerial incentives and change programmes as a reaction to the external factors and new technologies.

Q had experienced decades of stability and predictable growth. The organisation offered one product and the organisational structure was based on a vertical division between workers performing simple tasks and the management. Q had little formal horizontal differentiation of tasks in that period because of its small size, resulting in informal coordination procedures.

Two leading issues will be mentioned that ended the stability period.

• New products

As a reaction to direct competition Q introduced new products. The second product in 1987 and the third in 1993. The original product was still supplied but its relative importance in Q’s revenues declined. The new products were a reaction to competitors utilizing new technologies and forced Q to introduce new operating procedures.

• New technologies

Q’s operating procedures for the original product and bookkeeping had remained unchanged for decades. In the period between 1985 and 1995 all information systems were renewed and therefore work processes along with them.

B. Diagnosing the organisation

i. Structural diagnosis

When the two new products were added to the operations of Q, the organisational structure took the form of a product based diversification. However no direct changes were made to the existing operations, shown as department 1 in the picture below.

The two new departments were therefore profit centres with product managers and independent day to day operations. Department 1 had a wider function since it performed support functions for the whole company as well as providing the original product. All tasks that are not directly connected two the operation of the new departments was the responsibility of department 1.

ii. Groups and culture

There was a strong feeling of identity and culture within department 1 created by more than half a century of tradition. The members considered themselves the backbone of the company and since most of them had been with the company for decades they expected Q to return the feeling of loyalty they felt. Where formal hierarchical structure was unclear, customs clearly defined the status of individuals. Employees took pride in doing things the way they had always been done.

The new departments were not a part of that identity. Individuals met at lunchtime without problems, but interaction between the groups was however kept minimal in job related matters. The balance was maintained by everyone keeping strictly within their own departmental boundaries. Shifting working tasks from one unit to another usually caused frustration, but the mechanisms for coordination and control were relatively clear within each unit.

iii. Company culture and work processes

The managerial style that had developed in the original Q (now department 1) was that a number of unskilled employees performed simple tasks under supervision, and a few individuals had more complicated tasks and autonomy within the unit. The possibilities of promotions were limited because of the size of the company. Q was considered a good employer and individuals did not expect to get the same level of pay and autonomy elsewhere. Therefore good positions rarely became vacant.

The individuals who had important tasks regarded their tasks as a distinction and other peoples interest in your task was a competing claim. A symptom of that mentality is that no middle manager could take days of. The reason given was that they were to busy and responsible. Another phrase was: “it takes less time to do things your self than to teach others.” This was often said with pride as it meant that you knew something that others did not. Individuals that had been in the lower layers for a long time eventually avoided any changes from routine jobs since they knew that stepping in for someone with more advanced assignments, even in an emergency, would cause tension.

The individuals in the lower layers of Q could not expect to develop their abilities as the situation was kept stable by the elite. New recruits to the company usually came to understand that they were not meant to do more than solve simple tasks under supervision, and turnover of young recruits was high. Those who held good positions were also the individuals that hired new staff. The tendency was to hire people that would not destabilise the situation, by being overly talented or ambitious.

This culture became prevalent in the whole company even after the two new units were added. One of the two new product managers was recruited internally and the other adjusted to the internal dynamics of the organisational culture. The lower level employees then found themselves in an organisation that would not teach new skills. In such circumstances the pattern becomes that those who can, quit. Those who can’t, try to make the most of their time until retirement.

 

iv. The role of management

Before the introduction of the new departments, the span of control for the manager of department 1 was the whole company, but changed into a status equal to the other product managers under the CEO. To escalate matters further, a new CEO was appointed in 1990, following the declining period of Q.

The cohesion within department 1 had fostered an informal culture of involvement in job design decision making. That culture weakened as more decisions were taken on a higher level after the head of department 1 lost relative status. Before he had responsibility over the whole company, but now only the CEO had the position of taking decisions regarding the company as a whole.

Eventually, key employees of department 1 and the CEO got into a clear conflict, causing limited flows of information and communication between the parties. Mutual dependency however kept the situation peaceful and stable, since the CEO needed the jobs done and the employees perceived their skills as company specific.

In these circumstances no common vision could be introduced or implemented. Each middle manager had control over day to day operations and guarded autonomy in respect to both the other divisions and the CEO. The result was that the middle managers had freedom to manage, without a clearly defined responsibility. A defining feature of the relationships was a feeling of vertical dependency and horizontal autonomy.

As an example the process of budgeting and planning is resented by the departments as it is a mechanism for control. First of all it poses constraints in daily operations, and secondly it is a field of interaction between departments since the gathering of data and presentation is done within department 1. Both factors are perceived as an intrusion to the autonomy of the departments, and budgeting and planning remains an exercise in guessing solely for external use to deliver to the State Budgeting Agency.

 

C. Implementing change in this setting

Q is a small organisation with a rather informal structure of responsibility and relationships. These factors should in a general sense make Q more adaptable to change than a larger organisation with a formalized structure and procedures.

 

Planned change has however been difficult to implement in the organisational setting described. To show the dynamics at work an example can be taken. Top management intended to make changes in the organisational structure, making Q consist of three pure product based departments and define the coordinating and support functions as special departments with independent authority accountable to the CEO. The plan was to replace the informal interaction between the subunits with formally defined processes.

The change was consulted with the middle managers and key personnel. The involvement process did provide support, albeit to a slightly different plan. The bargaining result was to refrain from making changes on margins that would threaten department autonomy, so peace the department heads. The changes were small enough for top management to maintain their feeling of control and no sense of resistance was felt in the bargaining process. In the end, the change that was agreed to was not enforced to have any effect on organisation behaviour.

If we refer to the force field analysis it can be seen that the drivers to change are relatively weak. The monopoly protection has provided the financial slack necessary to tolerate the ineffectiveness of the organisational culture. In this setting top management becomes a participant in the game of maintaining status within the existing organisational culture of the status quo. The resistance to change is therefore not confined to the lower levels of the company but is a part of a dysfunctional stability that top management has bought into.

The culture and processes described in company Q are similar to those described by Macrí, Tagliaventi and Bertolotti (2002) for a small Italian manufacturing company. An organisational culture developed where “procedures that limit learning become institutionalized.” In Q it became a tacit agreement that the best way to do things would be to limit coordination and interaction. In that manner employees could create a dependency, prove their exclusive knowledge and irreplaceability within the organisation. The only organisational learning and change that could take place would be local since the units did not respect external authority.

Conclusion

The dysfunctional stability that developed in Q is consistent with the idea of an organisation that is stuck in a stationary equilibrium. By definition, there are no internal forces to change. The organisational structure described, seems to have the main objective of avoiding conflict rather than to define a system of coordination and control.

Although the individuals within Q do resist change, the responsibility for strategy and structure lies with top management. In the decade after 1985 Q witnessed a ‘strategic drift’, where external and internal needs changed but were not addressed in the organisational operational mode. The imbalance and insecurity fostered restraining attitudes among employees while the vision of top management was weak.

The result was an environment that was static and resisted any learning and development. The quality of working life in such an organisation is low since employees have severely limited possibilities of growth and development.

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3,994 words

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