Question

Leading Organizational Change

Leadership is perhaps never more important than when it comes to making a change in the organization. Leaders provide a sense of direction, increase motivation for the change, and communicate necessary information. Managers must fill these roles if they expect to successfully lead changes in their organizations.

In this exercise you'll read about a manager who failed to take on these important roles. Then you'll answer questions about what this manager missed in his effort to drive an important organizational change. As you complete the exercise, think about how you would head up a major change if you were in the leader's position. Many people believe an autocratic leadership style is the most effective because they assume leaders can simply draw on their legitimate power to push the change forward on their own. If the change is of any significant magnitude, however, it's going to require the support of employees to be successful.

Leadership plays a critical role in organizational change. Change agents are more successful when they champion a vision of a better future, communicate that vision in ways that are meaningful to others, make decisions and act in ways that are consistent with that vision, and build commitment to that vision. They also are more effective when they take advantage of coalitions and social networks. A pilot project is a useful way to introduce change on a small scale before diffusing it untested throughout the organization.

Read the case below and answer the questions that follow.

TOK Consulting had been a one-of-a-kind business in its geographic region for nearly a century. It specialized in developing and delivering training programs for a variety of industries and had achieved a reputation for high quality and customer service. However, with virtually no competitors nearby, TOK had little incentive to improve or update its approach or service offering. As the years passed, TOK fell into a pattern of indifference toward the environment, always certain that its monopoly within its geographic region would ensure its survival.

Not surprisingly, eventually a competitor did enter TOK's market and began to offer an identical service at a substantially lower cost. Customers began to drift away, and although TOK was never in danger of going out of business, it would never achieve its former stature without making some major changes. A new president was brought in by the board of directors and was charged with making TOK more efficient and more competitive. He started by announcing that he was going to hire a new senior manager to run the management training center. This was welcome news since the center had been led by an interim director for two years. The interim manager had done the best she could, but lacking real authority and clear direction from the former president, she had been able to do little to change the status quo.

The new president began the search for the new center director by asking employees to attend presentations by the applicants and then provide feedback on their preferences. By the time the four top applicants had completed their visits to the organization, widespread support had formed around one of the candidates. In addition, serious reservations had developed about a second candidate, despite an impressive resume. Neither of the other two candidates had demonstrated much potential, so they had been eliminated from future consideration. To the surprise of almost everyone, the president hired the candidate the employees had rejected because of their concerns.

Given the context of the new director's hiring, it wasn't surprising that the center's employees weren't excited about his arrival. However, the new director did little to alleviate their concerns. He demonstrated a very autocratic management style and immediately began changing things in the center. The past directors had stayed focused on external relations and general oversight of the center, but the new director began meddling in every level of the operation, from regulations on using office supplies to leave policies for the staff. No one really knew what to expect next because the changes were so random, so quick, and so apparently disconnected.

The biggest change the new director decided to champion was adding an online consulting option to the center. Historically, the center had prided itself on high levels of direct contact with clients and frequent face-to-face meetings. The new director, in contrast, seemed obsessed with launching an online version of the center's vanguard service. Not only did this directly contradict the traditional approach, but it also was sure to result in lower quality consulting, at least in the minds of the employees. The director began holding open forums to discuss the online option, but each time he did, the employees expressed additional concerns. Soon, the open forums were discontinued and the director met with a smaller group of assistant managers to promote the idea.

The assistant managers were also against the idea, but could see that the idea wasn't going away. The director had convinced the organization president that the online option was the way of the future, and with the president's backing, he effectively told the assistant managers that the online option would soon be a reality. Still, he wanted their endorsement so it would appear to the rest of the employees that he hadn't forced this through on his own.

After months of forums and meetings and backroom discussions, the day finally came for the assistant managers to vote on whether to launch the online option. The discussion that day was just as intense as it had been for weeks, but finally the assistant managers relented and gave their approval. The director was ecstatic and thanked them for their support. He began to divide up responsibilities for the project and set target deadlines for key steps. Although many of the employees still resisted the idea of online consulting, the center as a whole breathed a collective sigh of relief that the contentious debate over the idea had finally cooled down.

The debate over the new director, however, continued to heat up. Two days after the assistant managers' final meeting in which they approved the online option, a new edition of a popular trade magazine hit the newsstands. In it was a full-page advertisement announcing TOK's new online consulting package that would launch the following January. The appearance of the ad left the assistant managers speechless and made the employees furious. To be printed in this edition of the magazine, the ad had to have been placed several weeks earlier, well before the assistant managers met and gave their approval. In fact, it soon became obvious that all the involvement of the employees and assistant managers had simply been a charade. The director had moved ahead without them, had underestimated the time it would take to force their approval, and now had been exposed by a formal announcement of the online option that appeared in a widely circulated publication. His response to the situation? "The online option is the right thing to do."

1. Which element of leading change did the new director fail to establish?

Multiple Choice

• Independent action

• Widespread publicity

• Risk taking

• An innovative idea

• A strategic vision

2. The new director could have formed a guiding coalition to facilitate the change. Which of the following is a reason that a guiding coalition would probably have been ineffective in this situation?

Multiple Choice

• The executive team did not wish to serve on a coalition.

• The employees overwhelmingly supported the change.

• The employees would not be affected by the change.

• The employees were not committed to the change.

• The new Director empowered the employees to make the decision.

3. The new director might have had more success if he had introduced the online option first as a pilot project. Which of the following best illustrates a pilot project?

Multiple Choice

• Performing an extensive environmental scan to determine the best course of action for the project

• Having the new director himself prepare one of the initial modules to begin at the same time as the others

• Testing one or a small number of online modules before introducing the full range of online modules

• Convincing one influential employee to act as the "pilot" for the project and champion its cause

• Scheduling simultaneous launches of multiple online modules to beat the competition to market

4. Many employees resisted the online consulting program because in their minds the only "real" consulting was done face-to-face, the way they had done it for years. Consulting online undermined their confidence in doing their jobs. Which ethical concern does this raise?

Multiple Choice

• Some change activities potentially increase management's power by inducing compliance and conformity.

• Some change interventions violate basic principles of fairness.

• Organizational changes may risk violating individual privacy rights.

• Organizational change may harm more people than it helps.

• Some organizational change interventions undermine the individual's self-esteem.

5. The new director's decision to place the advertisement seemed to be as much about gaining control as it was about improving the organization. Once the advertisement was released to the public, the employees would have to go along. Which ethical concern about organizational change does this raise?

Multiple Choice

• Some change activities potentially increase management's power by inducing compliance

• and conformity.

• Some change interventions violate basic principles of fairness.

• Organizational change may risk violating individual privacy rights.

• Some organizational change interventions undermine the individual's self-esteem.

• Organizational change may harm more people than it helps.

6. The new director lost the trust of almost all the employees. This most reduced his ability to use which of the following to build support for the change?

Multiple Choice

• Global change

• Pilot program

• Cross-cultural change

• Diffusion of change

• Social network

Answer 1

1. Which element of leading change did the new director fail to establish?

• A strategic vision

The director wanted to show the employees that the decision to go online was a collective decision approved by all the assistant managers. However, the opinion of the assistant managers and employees regarding the decision was a facade which masked the already decided change. This could be concluded from the print ad in the magazine. Here the new director had indirectly imposed the decision to launch the online option on the employees and had underestimated the time required to convince the employees to turn the decision in his favour. He tried to disguise as a participative leader, while actually was more of an autocrat. His style of management had created mistrust among the employees. His communication to others were misleading. And he had thought he could get away with it. He should have understood that, whenever a change is of any significant magnitude,employees support is required in order to be successful. Thus this shows a lack of strategic vision.

2. The new director could have formed a guiding coalition to facilitate the change. Which of the following is a reason that a guiding coalition would probably have been ineffective in this situation?

• The executive team did not wish to serve on a coalition

Coalitions are an effective way to handle organizational change. However, when a change is of a significant magnitude, the support of employees is key to its success. The executive team serves as a representative of the employees and as a medium of communication between the top management and the employees. If the executive team refused to serve on a coalition that would mean the change could not be carried forward. Thus coalition would have been ineffective.

3. The new director might have had more success if he had introduced the online option first as a pilot project. Which of the following best illustrates a pilot project?

• Testing one or a small number of online modules before introducing the full range of online modules

As we know, a pilot project means to introduce change on a small scale before diffusing it untested throughout the organization. A pilot project is used to test the effectiveness of the change on a micro level. This helps to analyze the advantages as well as difficulties of introducing a change in a short span of time. In this question, Pilot project is best illustrated by Testing one or a small number of online modules before introducing the full range of online modules

4. Many employees resisted the online consulting program because in their minds the only "real" consulting was done face-to-face, the way they had done it for years. Consulting online undermined their confidence in doing their jobs. Which ethical concern does this raise?

• Some organizational change interventions undermine the individual's self-esteem.

The employees had quite an experience in providing consultation services by conducting face-to-face meetings with clients. They had developed a self confidence in handling the clients through directly contacting them. Thus this sudden change to consult online would need them to break away from the traditional approach and get accustomed to the online method. Thus it would take a hit on their self confidence and self esteem.

5. The new director's decision to place the advertisement seemed to be as much about gaining control as it was about improving the organization. Once the advertisement was released to the public, the employees would have to go along. Which ethical concern about organizational change does this raise?

Multiple Choice

• Some change activities potentially increase management's power by inducing compliance and conformity.

• Some change interventions violate basic principles of fairness.

• Some organizational change interventions undermine the individual's self-esteem.

Since the ad has already been published in the magazine, it was now binding on the employees to provide online consultation. The management has imposed the decision on the employees. Thus this change has increased the management's power by inducing compliance and conformity.

The facade of mutual decision making which had been put up by the new director had surely fallen apart. Employees opinions were not taken seriously. And this shows that basic principles of fairness had been violated.

Employees also took a hit on their self esteem.

6. The new director lost the trust of almost all the employees. This most reduced his ability to use which of the following to build support for the change?

Multiple Choice

• Global change

Since trust is an important factor in any organization. Trust between employees and management is important to keep an organization working smoothly. When a significant change is to be carried out, it requires the support of employees. Since here the director has lost trust of all employees so his plan to implement the change across the organization would be hit hard. It may be difficult to build support for large scale implementation of the plan that is global change would be difficult.