Change is inevitable and managers have to prepare and ensure that organizations are properly navigated around the changes that present themselves. Organizational change is any action or set of actions resulting in a shift in direction or process that affects the way an organization works. Change may be deliberate and planned, but can also originate from external forces beyond an organizations’ control. Organizations are affected by factors in both their internal and external operating environments and as such organizational changes could emanate from either internal factors or external factors which form a complex cause-and-effect relationship. Some of the tools used by organizations to monitor the changes in their operating environment include SWOT analysis, PESTEL framework, the Ansoff Matrix, and Porters 5 Forces Model. External factors such as changes in technology and information technology, political systems, social demographics and the market mix and increased competition are essential in identifying need for organizational change. Internal factors such as low productivity, low employee morale and high labour turnover also drive the need for organizational change.
Introducing Lean Manufacturing at New Dawn
New Dawn is a car parts manufacturing company based in India. The company’s products are sold locally. The executives want to make the company a global entity, however, have realized quality issues, delays in delivery, high inventory costs and poor employee morale. The company executives came together and contemplated that adopting lean manufacturing and making the company more technology intensive is their best shot at dealing with the prevailing issues in a bid to put the company on the global map. Lean Manufacturing principles were adapted from Toyota’s Production System and are aimed at cutting non-valued added activities such as overproduction, waiting, transportation, non-value added processing, excess inventory, defects, excess motion and underutilized human resources (Liker, 2004). In a bid to achieve this, New Dawn managers proposed introduction of new and better technologies in order to drive process engineering and automation of inventory management and ensuring total quality. There is a need, therefore, to understand how these changes will affect the organizations culture, structure, climate and development.
Effects of on Organizational Culture and Climate
Organizational culture is the underlying norms and values, beliefs and assumptions that are shared by individuals in an organization. Culture is manifested through behaviors and values that individuals uphold in an organization, it is the glue that holds the social fabric that is the organization (Armstrong, 2009). Iivari (2005) hold organizational culture as a dependent variable which managers can control and manipulate in order to solve problems and which influences whether organizational change efforts succeed or fail. The changes at New Dawn will affect the organizational culture as they demand increased employee involvement, emphasize of quality, innovativeness and continuous improvement. Lean manufacturing principles emphasize for increased employee involvement, team work and empowerment in decision making in order to enhance quick response to internal problems. Emphasis on quality and continuous improvement calls for adoption of Total Quality Management (TQM) a framework which incorporates focus on prevention, quality control, zero defects, employee involvement, focus on customer and quality leadership. The managers at New Dawn will then have to embed a culture of quality in every organizational process, dealing with employee issues and customer service (Anvari, Ismail & Hojjati, 2011). The managers will be required to embed into employees a culture of innovativeness either in products or processes as this will enable the company to survive in the global market and especially, in the technology driven environment which is highly competitive.
Organizational climate is the perception held by individuals about their organizational work environment and encompasses broad dimensions such as involvement, managerial control, innovation, task orientation and work pressure amongst others (Vasu et al., 1998). The anticipate changes at New Dawn require that the climate change in terms of increased employee involvement and support as dictated by lean principals and Total Quality Management. The managers are therefore required to ensure that employees are consulted indecision making, fair and quality treatment of employees to ensure a positive perception of the change process and thus minimize resistance. Empowerment will reduce managerial control, consequently enhancing employee autonomy to make decisions while involvement will ensure that employees feel trusted to freely communicate their point of view on organizational matters. The managers have to encourage innovativeness and risk taking so that employees can emerge from their comfort zones and exploit their potential.
Effect on Organizational Structure, Technology and Environment
Today’s turbulent business environment calls for flatter organizational structures which enable speedy response to changes in the environment. Operating in a global scale increases the risks as much as it increases availability of business opportunities. Moreover, Lean manufacturing calls for responsiveness to daily and ever changing customer demands. The management at New Dawn will as a result have to change from the vertical, traditional bureaucratic structure and adopt the more flexible horizontal or matrix structure. In Vertical or pyramidal organizational structures power and authority flows from the management to subordinates. The same applies to formal communication as information flows downward as dictated by the chain of command. These structures are highly rigid and thus cannot be applied in an environment which requires high flexibility, employee involvement, swift flow of information and speedy reaction to variables in the environment (Rodrigues, 2001).
New Dawn will also have make changes to its technology as lean manufacturing calls for process reengineering. Business Process Engineering is the process of determining how business processes operate and redesigning in a bid to eradicate redundancies or wastages so as to improve efficiency and productivity (La Rock, 2003). The process may then require that the company acquire update its technological portfolio and buy more efficient machines. Lean manufacturing also adopts Just in Time (JIT) production which makes use of pull systems which are utilized to ensure that customer demands are timely met. New Dawn in a bid to reduce lead times and shift from plant level production to demand driven production will have to liaise with suppliers and adopt Supply Management Systems such Electronic Data Interchange, Enterprise Resource Planning (ERP), Collaborative Planning, Forecasting and Replenishment systems (CPFR) as a means of streamlining logistics and inventory management.
Business environment is made of internal and external factors. Internal environment includes employees, processes, management and technology adopted. The external environment consists of suppliers, competitors, political factors, and consumers. Managers at New Dawn will have to respond both to the positive and negative challenges brought about by adopting lean manufacturing and going global. Adopting lean manufacturing will have a positive impact on New Dawn’s internal environment characterized by an innovative culture, employee involvement and efficient production processes. The changes at New Dawn will launch the company into a global business environment characterized by increased competitiveness, regulations and a wider market for its products. The changes will also ensure efficient coordination with suppliers and better services to its customers.
Effect on Organizational Learning and Change
The global environment coupled with need for continuous improvement at New Dawn will require that the management encourage organizational learning and positively adapt to loss of managerial control due to a flatter organizational structure and increased employee involvement. Learning organizations continually transform themselves by espousing knowledge creation and obtaining knowledge which is then utilized in organizational transformation and modifying organizational behaviour (Hsu, 2009).
Change Management Strategies
Scholars have developed various tools that managers can use in managing organizational changes such as the change management matrix, Kurt Lewin’s Unfreeze-Change-Refreeze change model and Kotter’s eight stage change model. The change management matrix emphasizes need for managers to push or pressure individuals for change, share a clear vision with employees, capacitate organizational changes by providing requisite resources and then implement organizational changes. Kurt Lewin’s Unfreeze-Change-Refreeze model emphasizes the need to overcome the status quo, resistance and conformity by preparing, educating and motivating employees for the changes and then making the actual changes, and training employees, providing support and re-organizing the organization to reflect the changes. Refreezing involves making organizational changes to be the norm by cementing them into the organization’s culture, formal structures and social fabric. John Kotter (2002) proposes that change goes through an eight stage phase with each phase acknowledging how people relate and respond and approach to change. The phases include establishing a sense of urgency, building a guiding team, ensuring that the vision is right, properly communicating the vision, empowering individuals to act, creating and acknowledging short-term wins, putting in measures that ensure the organization does not slip back to the old order and making the change stick by incorporating it into organizational systems.
Managing Change through Organizational Development Process
Organizational change can be effected by using the Organizational Development process, a cyclical six step process based on action research model. The process is initiated by identifying the need for change and then ensues through assessment, planning the changes, implementation, and gathering of data for evaluation, analysing results and proving feedback (Vasu et al., 1998). New Dawn managers kick starts the process by identifying quality issues, delays in delivery of products, high inventory costs, poor employee morale and need to go global as the driving force behind making changes in the company. Assessing the situation fully should then be done either by documentation review, organizational sensing, focus groups or surveys. Use of Fishbone analysis is also encouraged to separate root problems from the symptoms. Planning the changes is done through training and selling the changes to employees, building quality teams, change champions and structural interventions. The proposed changes are then implemented. In this case, New Dawn adopts new technologies and ensures the production processes are reengineered to ensure efficiency and quality ate each and every stage. In the process data is gathered for evaluation purposes after which New Dawn managers should use agreed upon parameters such as improvement on level of quality, inventory costs and lead time to determine whether level of success. Feedback on the same is provided to the executive and if not successful the process is reinstated (Vasu et al., 1998).
Organizations exist in turbulent environments and have to make changes from time to time in order to ensure that they adopt and are able to keep up with changes in their environments. Organizational change management starts by identifying the need for change stemming from either internal or external factors. Organizational changes may require some adjustments in the organizational structure in turn to reflect the changes and the prevailing organizational environment. In the current environment traditional vertical organizational structures cannot work as the environment calls for more swift reaction to changes, increased employee involvement and efficient flow of information. Other changes require that organizations adopt up-to-date technologies to achieve efficiency and also incorporate knowledge management systems to ensure that organizations are able to create, disseminate and use knowledge. Organizational change can be guided by various change management models encompassing the change management matrix which emphasizes pressuring, sharing vision and facilitating changes or the Kurt Lewin’s Change model which requires managers to unfreeze-change and then refreeze the organization. Managers can also adopt Organizational Development process which emphasizes clear identification and assessment of organizational issues followed by selling the change, implementation, and evaluation of the organizational changes made to determine whether changes were successful.