The Role of Leadership in Organizational Change

Organizational change happens when a company transits from the current form to a desired future state. Although change is initiated to foster the vision of an organization, in most instances, the reception by stakeholders is negative. Employees are used to a familiar structure and culture but the prospects of a change threats their status quo. The first reaction is resistance. The fear of the unknown and expectations for the future creates a barrier between the intended change initiative and the implementers. Such constrictions necessitate the application of astute leadership for a successful implementation process (Hon, Bloom and Crant 2014, p. 922).

Given the rapid evolutions taking place in the global market, change is important for competitive advantage. The management is therefore obliged to promote the objectives of the shareholder but be considerate of the employees emotional and physical welfare for adequate a seamless process.

Why Organizational Change is Difficult to Implement

Resistance to Change

According to Lawlor (2013, p. 710), when people are accustomed to a certain routine, it becomes difficult to adopt in case of a change. When the strategic managers introduce a new working structure, the implication is that new rules and programs will be introduced. The disruption of the prevailing status quo causes emotional and physical anxieties which cause resistance. The workers want to maintain their work portfolio and benefits which is affected by the change. Two main explanations are provided for the resistance namely; organizational culture and structure.

Organizational Culture

Organizational culture defines the values and shared assumptions that govern the behaviour of people in an organization. The culture, which is depicted in the individualized code of ethics, is based on the vision and mission of the company. Once an employee is recruited into the organization, he or she is oriented in order to familiarize with the job. As the worker gets acquainted with the job and colleagues, the values and beliefs become common leading to a permanent attachment with the organization. As such, any form of change is not welcomed. Based on Maslows Hierarchy model, Fatallah and Syed (2018, p. 21) employees have varying needs which are mainly fostered by their current financial, recognition, and security status. For instance, a junior accountant may be trying to meet certain organizational and individual expectations with the aim of getting a promotion or recognition. However, with a change initiative in motion, chances are that new needs will be created. The only way to avoid such is resisting by way of demonstrations or creating or giving excuses. In addition, a change means that the workers may be required to work under new supervisors or colleagues. Such factors translate to intrinsic and extrinsic resistance.

The case of Nokia is an example of an unsuccessful change attributed to culture. The organization was an industry player until technology evolution created a new market gap. The management was already used to being leaders in the industry but prospects of a new change meant that the position may be forgone. Some of the managers were reluctant to adapt to a new culture leading to a collapse of the company.

Organizational Structure

The structure of a company is made up of processes, programs, and resources used to drive the vision statement. Employees, categorized as labour resources, are the main stakeholders as they directly influence the success of departmental mission by acting as implementors. A change depicts that the job description will be restructured to accommodate the new process. As such, new training programs need to be designed and implemented at an individual level. Apart from the expected financial investment needs, employees are supposed to be systematically and psychologically prepared to learn the new working conditions for successful implementation. The problem arises when there is a big mismatch between the skill sets and experience of an employee with the new job expectations. The process may be time consuming and costly at an individual level. As a result, employee’s commitment to the new changes may be low making it difficult for the management to successfully execute the changes.

For a change initiative to generate expected returns, the business model is supposed to be revised. In the new digital world, firms that are leading in their respective industries accepted the disruption by embedding online framework into their models. For example, Tesla’s sales are driven by the online model which creates an environment for the management to interact with prospective customers for customization needs. If the company relied on the conventional sales pitching techniques, the vision may not have actualized given that there are other established players in the industry. Like Nokia, Gamestop relied on its large market base and leadership to maintain its activities. Other new entrants identified the gap developed by technology and developed applications that allow customers to download games online. Gamestop lost a significant market share due to its reluctance to shift the traditional model and incorporate digital solutions. The resistance by the company management meant that any form of change initiative would be unsuccessful. The changes that followed the market disruption failed to produce positive outcomes due to the inability of the management to convince change agents to restructure the prevailing organizational structure.

Resistance to change implies that any attempt to proceed with a new initiative will be followed by subsequent emotional and physical rebellions that lead to futile outcomes. Leaders should be aware of possible resistance for successful results. As a result, prior communication explaining the need for the change and its future effects on the employee is important to minimize the resistance (King and Lawley 2016, p. 5). When employees understand the change initiative and the resulting effects to the organizational and individual needs, they are better placed to adapt and assimilate the changes. Kurt Lewin proposed that the change initiators should implement the process in phases, by creating consecutive freezing, unfreezing and refreezing stages such that after learning the need for a new system, the expected behaviour is solidified in progressive phases (Burnes 2004, p. 981). 

Inadequate leadership Skills

The managers acting as change agents should possess adequate skills to drive the change process. In most instances however, the managers fail to consider the intrinsic and extrinsic needs of the implementers driven by the need to drive the vision of the company. Managers focus on the wealth and profit maximization goals of the company as fostered by the change initiative. In the process, the needs of the workers, who directly participate in establishing the change, are ignored.

 Informal organizational structures and groups make it difficult to enhance collaboration among the various units. The superior managers create a barrier given that they only communicate with the junior staff when giving orders. On the other hand, the junior workers avoid relating with the managers for the fear of being reprimanded. Such a tense environment creates difficulty when implementing a change initiative (Cummings and Worley 2009, p. 4). The workers fail ask the managers to address certain issues since the reception may be negative. For example, during the implementation of digitized health care records in a hospital setting, the staff may fail to ask for advice when there is an issue essentially when the managers in charge exercise authoritative leadership. Such a leader breeds fear and as a result, the staff opts to discontinue the process or use their own expertise to solve an issue and end up with adverse outcomes.

Managers are therefore supposed to promote a participatory and engaging environment to boost employee morale and attachment to the new process. An engaging environment creates room for knowledge sharing which in subsequent leads to creativity and innovations that accelerate the change process for successful outcomes. The case of Ricardo Semler, the majority owner of Semler Partners, depicts the importance of leadership in establishing an organizational change. After realizing that the company was poised to fail if a new organizational model and culture were not created, Semler gave employees the power to decide the tools and resources needed to drive the vision of the firm. The leader empowered the workers by enabling them to choose when to work and the job expectations. As a result, the staff owned the business model and focused on activities that led to creation of value added solutions for the customers. The company is now one of the most innovative and engaging enterprises that exemplifies the importance of democratic leadership in change implementation.  

Why Organizational Change does not result in the Desired Successful Outcomes

Resistance to change by the stakeholders and inadequate leadership skills lead to the design of ineffective plans. When the leaders do not consider the input of the workers in the new process, it becomes difficult to design an action plan that befits the common vision and mission of the company.  Not all issues are addressed and as a result, the solutions ineffective.

Arguably, employees should follow the leaders given that they carry the vision of the company. However, there are instances when the change agent is not well-informed of the current market conditions and as such, he or she may not posses adequate knowledge to create an implementation plan. For example, the sales people directly interact with the consumers when pitching the brand to the market. They are therefore aware of the specific needs and expectations of the consumers towards a brand and are more positioned to come up with market solutions. If the leaders fail to engage the sales people when constituting the action plan, chances are that the process will fail. Cummings and Worley (2009, p. 3) caution managers against imposing ideas on the workers before conducting a feasibility study and seeking for advice from the change implementers. An accountant may be positioned to come up with an easier and cost-effective program given that he or she has practical knowledge and experience on the existing applications.

Conclusion

Change is imminent essentially in the new tech world. It is therefore upon the managers to learn the structure and culture of the organization before crafting change initiatives that will transform the entire firm. Creation of a participatory and democratic environment gives both employees and leaders the power to manage the change process without creating conflicts. Being aware of the potential for resistance, managers are positioned to address all concerns before the actual implementation process. When the employees are aware of the need for change and its effects on their individual and organizational goals, chances of a successful process are high.

List of References

Cummings, T. and Worley, C. 2009. Organization Development and Change. South Western: Mason

Burnes, B. 2004. Kurt Lewin and the Planned Approach to Change. A Re-appraisal Journal of Management Studies, 41(6): 977-1002

Fallatah, R.H.M. and Syed, J., 2018. A Critical Review of Maslow’s Hierarchy of Needs. In Employee Motivation in Saudi Arabia (pp. 19-59). Palgrave Macmillan, Cham.

Hon, A.H., Bloom, M. and Crant, J.M., 2014. Overcoming resistance to change and enhancing creative performance. Journal of Management, 40(3), pp.919-941.

King and Lawley. 2016. Organizational Behavior, Second Edition. Chapter 11, Changing the Organization.

Lawlor, J. 2013. Employees Perspectives on the Post Integration Stage of a Micro-Merger, Personal Review, 42(6), 704-723