IMPACT OF CHANGE MANAGEMENT ON ORGANIZATIONS (Case study – Thistle city Barbican, London, UK) BACKGROUND OF THE STUDY INTRODUCTION In the recent years, many businesses have undergone several organizational changes due to the rapid and continual increase innovation in technology that exposes organizational systems and processes, increase diverse markets and create opportunities for more growth and revenue through adequate knowledge of their needs and expectations in the marketplace which concedes employees and organization as a whole to experience rapid change like never before as they move freely within the organization.
The concept of organizational change involves making adjustments to achieve organizational goals more efficiently and effectively using business strategy to accomplish those overall goals set by the organization. Usually, organization undertakes some organizational transformation when its reaches a level of experiencing a substantial growth and development in their life cycle. Examples of organizational changes might include merger, introduction of new technologies, transition of new executives or directors in the case of Thistle City Barbican, restructuring operations, rightsizing and re-engineering.
According to some experts, organizational change is refer to as an organization wide change which may occur in numerous forms such as internal and external or uncontrollable changes (Harris & Hartman, 2001). Both the internal and external factors are discussed in this research using thistle city hotel to examine the importance and the adverse effect of organizational change or transformation on employees and organizational performance. In spite of the importance of organizational change, most change initiatives has not been successfully implemented or fails to deliver the expected rganizational goals as expected by the owner of the business as a result of poorly defined organizational objectives and project management skills while others but few of these initiative were successful in some organizations. The reasons for both a successful and unsuccessful implementations from different perspectives will be discuss in this research. HISTORY: Overview Thistle city barbican hotel is one of the leading UK hotel chained with several other hotels situated in the city centre, owned and managed by a group of people with the brand name- Guoman.
This hotel was transformed from a gold mining establishment in 1954 when the company sold its gold mining activities that was originated in 1932 to start the operations of the hotels, restaurants, pubs and milk bars. In 1996, based on the floatation of the company stocks in the stock market, the company became Thistle hotels Plc from being called Mount Charlotte of 1988 (Employment handbook, 2008). In 2002, under the long term management contracts Thistle Hotels Plc sold 37 out of its 68 hotels to a property development company thus, owned and managed on behalf of the new owners.
The hotel was de-listed from stock market in 2003 as part of the international Hong Leong Group by BIL international limited as a result, became Thistle Hotels Ltd. The Hong Leong Group controls diverse range of businesses across the world and has helped Thistle hotels to accomplish its continuous vision to develop, grow and progress as the world class hotel management company across the globe (Employment handbook, 2008). The purpose of this study is analysing the effectiveness of organizational change on Thistle hotel’s employees and its organization as a whole.
As indicated above, the ultimate objective of this research is to identify and examine the intended and unintended consequences of this organizational change on the employees and organization performance. In addition, the study will evaluate how the reactions of workers to the initiations made at Thistle City Barbican Hotel was managed or in other words, controlled to achieve successful change implementation. STATEMENT OF THE PROBLEM Every action draws a reaction. Any form of internal or external change in an organization gives birth to either a positive or negative consequences from individuals involve.
Example is Thistle Hotel where some internal changes were initiated which ultimately affects the employees’ behaviour on the hotel performance. According to Harris and Hartman’s (2001), a change often results in resistance and that if not properly handled may result in the doom of the management process of an organization. Since management can be simply defined as getting work done through people, it is therefore evident that the attitude of the people working is of great importance to the success of the organization in question. OBJECTIVES OF THE STUDY
The aim of this study is to critically determine the effects of change management on workers and on the organization as a whole using a case study on Thistle Hotel management with the following objectives: ? To examine the importance of Change management ?To analyze key factors of Change Management Processes ?To determine if Change Management procedures result in a successful change implementations or not ? To what extent has the change profit the employees and the organization RESEARCH STRATEGY: ?Case Study: This study takes in view, the case of Thistle City Babican Hotel.
RESEARCH QUESTION ? Does Change Management lead to successful change implementation? DATA COLLECTION AND DATA ANALYSIS ?Secondary Sources: textbooks, academic journals, articles will be used as secondary sources to obtain data relevant to the study. LITERATURE REVIEW INTRODUCTION In today’s business environment, organizational changes became an important means of survival for every organization (Carnall, 2003; Nadler & Tushman, 1995). As a result of the importance, the question of whether businesses are able to change successfully has been a controversial issue of debate for a long time.
Change remains a dominant factor, the only constant or inevitable thing in life. At the dawn of new millennium, organizations need to evolve and regenerate, through innovation, globalization, costs control and increasing customers’ expectations and remain competitive at marketplace in order to survive. According to Handy (1985), a change is a way of life affecting every individual within the organization. As the degree of change increases, managers within the organization influence the change process and outcome (Cook, Macaulay & Coldicott, 2004).
Their attitude towards change affects the individual commitments which determine the future success of the business. For organization to be highly competitive, it requires more skills and knowledge, thus companies enforcing workers to put more efforts to their job as well as adjusting to the change program (Pascale, Millemann & Gioja, 1997). This chapter provide some exciting literatures on the concept of change management in organization as well as the impact of change management implementation on Thistle city UK. CONCEPT OF CHANGE MANAGEMENT
As the world is growing and changing every time correspond to the quick change most organizations experience. The rate at which the organization triumphs in their changing process determines the level of their survival (Carnall, 1982). Every business is familiar with the same concept of change management but how businesses implement and became successful at it varies depending on the nature, individual involvement, size and age of the business. A change management from both organization and individual perspectives is the approach of dealing with change.
Several researches show that, the concept of change management represents transformational change that occurs within a given business set up. It is a method for reducing and managing resistance to change when implementing process, technology or organizational change. Most researchers stated that the necessary component for any organizational performance improvement process to succeed is termed change management. According to Burnes (2004), change in the work environment remains an ever present element that affects all organization and individual’s adaptability (Pulakos, 2000; Eva, Ralf & Karlheinz, 2005).
Although, Caldwell (2004) opined that, organizational changes intend to increase creativity and productivity as well as performance within the organization setting instead evoke negative reaction of the employees. According to Porras & Robertson (1983), more change efforts yield a less outcome, over 80% of managers are affected by the level of change (Worrall & Cooper, 2006), lead to low performance and increase mistrust due to lack of communication. Thus, only 6% of change efforts were successful (McKinsey, 2008).
According to Harris & Hartman (2001), organizational change is an internal and external or uncontrollable changes that take place in an organization, it could be a change in the leadership style, strategic, operational or technological changes to inhibits a successful re-engineering (Marie & Neal, 2006) of the organizational culture. The details on these factors would be discussed in this research with reference to Thistle city hotel, UK. Organizational change influence individual’s commitment and it level specifies the extent to which its affect individual’s commitment to work (Donald, 2006).
To achieve the goals and improve workers’ commitment within the organization, Dennis (2006) argued that, people have to resist change irrespective of the personal benefits attached to the changes. From his observation, he realized that people do not necessarily resist the change phenomenon of the organization which drastically reduced commitment to work. According to Kotter & Schlesinger (1979) self interest, distrust, inadequate knowledge on the benefit of change and intolerance for change, are the major reasons people’s resistance to change is highly inexplicable.
They further explained that, organizations declined people resistance through negotiation and agreement of the team, providing adequate information through proper communication and involvement, manipulation and facilitation, and through explicit and implicit coercive. Neal (2006) postulated that, communication, innovation and transparent change procedure play a vital role in change management process, as the determinant factors to how leaders operate within the organization, they must not be disdain instead ensure that people involved adjust or adapt with the change processing to achieve market creativity.
While advancement helps to sustain complete growth and development, for actualization, changes such as technological advancement or restructuring the employment unit or leadership styles at workplace must take effect, DEFINITION AND TYPES OF ORGANIZATIONAL CHANGE The overall framework to improve performance of an organization is called an organizational change. This change occurs when organizations continually introduce significant changes over it business strategic in order to accomplish success by implementing standards at which it operates.
For organization to succeed, they must undergo some significant changes at various levels thus, successful adaptation to change is a significant component of organizational change and employees must learn to adapt and adjust to the change (Pulakos, 2000). Organizational change is regarded as the process of restructuring an organization’s resources to increase value and effectiveness of the key players within the organization. This change could be human resource which is the greater assets of the company, technological, structural, strategy or developmental change etc.
According to Ackerman (1997), there are three types of change that take place in every organization, these include; transitional, developmental and transformational. All these changes are relevant but the most important one that has its basis within organizations (Kanter, 1983 and Nadler & Tushman, 1989) and traceable to Lewis (1951) model is transitional change. •Developmental change occurs when organization makes improvement on their current business state.
Employees are likely to adjust because it causes no or little stress on and they are well educated on the new techniques imposed in order to stay competitive. •Transformational is the combination of both transitional and developmental changes. It occurs when organizations intend to improve in their productivity in order to enhance customers satisfaction and avoid unexpected competitive at marketplace. •Transitional is the process of interchanging the old state of the organization into the new state. This can be achieving through reorganization, merger and acquisition, new discoveries and technology.
At the stage, employees mistrust and insecurity towards job inclines. PROBLEM OF CHANGE MANAGEMENT Several scholars in their different perspectives argued that, the only way successful media for organization to achieve its desire goals is through changing, any organization that fails to practice or implement new development is out of growth and its surviving rate is uncertainty. Many researchers argued that, there are various problems attached to the application and implementation of change management within organizations.
According to Kuruppuarachchi et al. (2002), major problems include the adoption of new strategy into an older work structure, involvement of professional leaders and right attitude to accept the new processing. However, resistance is another major problem of change management. Watson & Gallagher (2005) stated that, implementation of change is perceived as threat from the disruption of a stable working environment and if imposed, leads into resistance as a result of revolutionary change (George & Jones, 2008).
According to Senge (1999), there is no resistance to change if change is not actually occurring within organization. Employees with a healthy system tend to resist change because as a living system, its life depends on its ability to establish a steady state (Rice, 1963). A natural and automatic response to change is resistance which Rice (1963), suggested to be more problematic when it leads to conscious and un-conscious re-definition of primary task.
Resistance is originated from fear, the apprehension of losing jobs (Watson, 2005; George & Jones 2008), or fear as a result of job insecurity (Kets, 2001) when the ability and skills needed for the new environment is not available. Resistance to change is often exhibited in high level of absenteeism (Block, 1981), employees churn, poor customer service which will affect the mission and values of the organization as well as the employment relationship as a result of poor understanding on why change is necessary and it accomplishment (Kotter, 1996).
Thus, employees take some extreme steps to avoid the change from occurring while leaders’ responsibility is to recognize the resistance and take heed from hampering the organization growth (George & Jones, 2008). Morgan (1993) asserted that the new form of organization you are trying to achieve will often be resisted by your present form of organization. Another typical problem is the conflicts among the management delegate as a result of continuous changes in organizations and technological advancement (Kathman & Kathman, 1990).
According to Kotter (2008), it is often said that major change is impossible unless the organization head is an active supporter. Since the operation of an organization is dependent on the directives of the manager, changing leadership personal might result to a new operational procedures which is bound to generate some degree of conflict, especially, if the new leader does not share the same vision as the outgoing leader, change process result to discontinuity and inconsistency.
Thus, confusion and frustration on the path of the workers then generates conflict. According to Kotter (1999), the primary problem was due to lack of understanding the vision and need for change. Employees lack the adequate knowledge regarding change itself, not understanding the benefits and impact their jobs. Change also weakened the capacity to contain disruptive emotional states (Kranzt, 2005) and further creates feelings for employees n their influence within the organization which resulted into worthless and helpless (Hirschhorn, 1993) but when the feelings become uncontrollable, employees detached from or leaving the organization thus incline the staff turnover rate. AN ANALYSIS OF THISTLE CITY HOTEL AND CHANGE PROCESSES INITIATED This section highlights the various change implementation that Thistle city hotel has undergone since it establishment and ways in which the changes were initiated. BACKGROUND
Thistle city barbican hotel is one of the leading UK hotel chained with several other hotels situated in the city centre, owned and managed by a group of people with the brand name- Guoman. This hotel was transformed from a gold mining establishment in 1954 when the company sold its gold mining activities that was originated in 1932 to start the operations of the hotels, restaurants, pubs and milk bars. In 1996, based on the floatation of the company stocks in the stock market, the company became Thistle hotels Plc from being called Mount Charlotte of 1988 (Employment handbook, 2008).
In 2002, under the long term management contracts Thistle Hotels Plc sold 37 out of its 68 hotels to a property development company thus, owned and managed on behalf of the new owners. The hotel was de-listed from stock market in 2003 as part of the international Hong Leong Group by BIL international limited as a result, became Thistle Hotels Ltd. The Hong Leong Group controls diverse range of businesses across the world and has helped Thistle hotels to accomplish its continuous vision to develop, grow and progress as the world class hotel management company across the globe (Employment handbook, 2008).
The main departments at Thistle city hotel are shown in the chart below including their sub-departments within the organization. ORGANIZATIONAL CHART Source: Employment handbook, 2008 Thistle city hotel has undergone and is still undergoing restructuring from the management perspective, therefore, it is paramount for employees within the hotel to adjust and adapt with the constantly changing working environment.
The management delegates at Thistle city had initially underestimated the impact of implementing change management on employees but after experiencing the impact of employee absenteeism and churn (Employment Handbook, 2008), they decide to implement re-engineering planning process use in tracking workers and their activity. Before the introduction of new technology use in tracking employees’ commitment as well as the e-learning programme initiatives that gives a regular training basic on the clear vision and values of the organization, the hotel was using a manual signing sheet to regulate workers commitment at work.
For years, the management had based on this manual method until recently when it was discovered that, most employees were not actually working as expected instead, encouraging and increasing absenteeism. According to Pettigrew & Whipp (1991), it is very important to adopt right strategic changes which demand high technological participation (Worren, 1999) in organizations. Meanwhile, for Thistle hotel to achieve better infrastructure and growth within organization, they intend re-engineering their organizational culture which finally resulted in changing their business operation.
The responses that were received from the information forwarded by the data collected from the questionnaires and interviews determine the impact of implementation of change management within Thistle city form the basic research for this study. IMPACT OF CHANGE MANAGEMENT AT THISTLE CITY HOTEL Considering the theories used over time in change management, leaders need to understand the effectiveness of change process model that suit transformation (Anderson, 2001) in order to improve the quality of products in the global economy as well explore new opportunity for growth and increase productivity (Burnes, 2004).
Lewin (1951) classic three-step model for successful change of “Unfreezing” the present level, “Moving” to a new state, and then “Refreezing,” or stabilizing the new state (Weisbord, 1987). From the last two decades, Lewis model has become unfashionable (Dawson, 1994). According to Cameron and Green (2004), Lewis force field analysis of present/end state discussions are extremely useful but lose worth when it becomes a mechanistic approach resulting into plan, implement and review.
This was not adequate for the issues highlighted in this study. Another model to be considered is the Kotter’s eight steps to implement successful change (Kotter, 1996) which are establishing a sense of urgency, creating a guiding coalition, developing a vision and strategy, communicating the change vision, empowering broad-based action, generating short-term wins, consolidating gains and producing more change and anchoring new approaches in the culture.
Caldwell (2001) stated that, the model is more prescriptive and lack the role of a change agent while Cameron and Green (2004) argued that change is seen as linear not cyclical, therefore, the model should place emphasis on getting all the stages right rather than getting the early stages right ignoring the later stage. Thus, this model is not selected for this study as a good measure to implement successful change at Thistle hotel. Pettigrew and Whipp? five factors of change model (Pettigrew & Whip 1993) is another model consisted of the environmental assessment, leading change, linking strategic and operational change, human resources as assets and liabilities and coherence of purpose. According to Wilson (1992), this model did not analyze impact of change within organization, also prescriptive in nature like the previous model. The most comprehensive model than the Lewis model which dealt with change at all levels without considering the environment where change take position is the Bullock and Barren’s four-phase model.
According to French & Bell (1995), this model is not sufficient for change because external factors must be considered. Consequently, Cameron and Green (2004) posit that, planned change model is not good to over-simplify organizational changes as it ignores resistance and interdependencies between business and sub-system. Thus, this model was not selected for Thistle change implementation. The last model to mention here is the Kanter’s Ten Commandments for executing change within an organization (Kanter, 1992).
He suggested that Lewis’s model of change is too simplistic because Lewis viewed that organizations are stable and static. Kanter argued that, change is multi directional i. e. it happens in all directions at once and seen as a more or less continue processing. Burnes (1998) explained that, Rosabeth Moss Kanter is a leading proponent approach to management and remained the most consultative model out of all (Burnes, 2004).
The Kanter’s Ten Commandments include the following: analyze the organization and its need for change; create a shared vision and a common direction; separate from the past; create a sense of urgency; support a strong leader role; line up political sponsorship; craft an implementation plan; develop enabling structures; communicate, involve people, and be honest; and reinforce and institutionalize change. Moreover, this model seemed to deal with the objective of this study as well as Thistle’s change implementation.
Therefore, this model is regarded as the most appropriate model for this study because it helps Thistle to deal with change in all angles. CONCLUSION The effect of globalization as a matter of fact has led many organizations and businesses in achieving the desired profit margins and increase range of productivity and customer service resources (Marin, 1988). According to Bloisi (2003), a change is the process of moving from a present state, to a desired state that individuals, team and organisations undertake in response to dynamic internal and external factors that alter current realities.
Having set this, the purpose of this research was to look into the impact of change management on organizations. Meanwhile, the main objective of the study was to look into the impact of change management implementation in Thistle city. The study described some important factors that organizations especially Thistle city must put in consideration before achieving a successful change implementation.
From the analysis, environment, transparency, effective communication and trust between the employees and management play a crucial role in change management implementation. Without any of these factors, change as an important role in the accomplishment of organizational growth will not be successfully implemented within the organization. Based on the analysis and findings of this research, the study discussed variety of models for organizational change as it affect Thistle re-engineering initiatives thus, meet the customer expectations and ranges for their demand.
The following models were reviewed; three step model (Lewis, 1951), eight steps to successful change (Kotter, 1996), planned change model (Bullock & Battens, 1985 ) five factor of change model (Pettigrew & Whipps, 1993) and Kanter’s Ten Commandments (1992). The analysis that has been scrutinized is initiated through questionnaires and interviews that were used to capture recommendation forwarded by the data collected from the sample of 50 managerial experts with long term working experience as well acquainted with computer and readiness for change in Thistle city hotel.
Based on the findings and outcome, more than 70% of the managerial experts interviewed agreed that the most eminent advantage of the new development is to track workers commitment to job. While the other 30% argued that, implementation brings about an increase in cost (Walsh, 2008), organization like Thistle city must be financially strong to swim across unforeseen risk during initiation if not, they might end up in bankruptcy. Change management is very important for the sustainability of an organization. Adopting re-engineering initiatives through change management added more success to Thistle city hotel.
However, Kanter’s Ten Commandments model of change is predicted to be the most appropriate model for the purpose of this study because is a consultative approach to change implementation. Thus, the change processing is needed to unfreeze whatever that is prevailing currently at Thistle city by adopting new re-engineering initiatives within the hotel through refreezing system into a new organizational structure (Kuruppuarachchi, 2002). http://ir. dut. ac. za/bitstream/handle/10321/478/Naidu_2008. pdf? sequence=1 REFERENCES
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