Organisational Effectiveness

Discuss about the Role of Change Management On Organisational Effectiveness.

The increasing competition worldwide has fostered the business organisations to continually implement and adapt to new changes for gaining competitive advantage. Changes continually occur in an organization for improving its performance necessary for sustaining in the competitive market of today (Thomas, 2014). Organisational changes refer to new initiatives undertaken by a firm such as in business processes, job roles, structures, behaviours, technologies for enhancing its profitability. Organisations worldwide are implementing change management process for improving their effectiveness and achieving the strategic goals. Businesses around the world aim to enhance their operational efficiency through introducing new changes in order to meet their objectives. Adaptation to new changes has become necessary for businesses in order to achieve sustainable competitive advantage (Armstrong, 2006).  In this context, the present essay emphasises on the role of change management in increasing organisational effectiveness. For this purpose, a comprehensive literature review is undertaken in the report to provide a wide understanding of the research topic.

Organisational Effectiveness

Organisational effectiveness can be described as the efficiency through which a firm is able to achieve its business objectives and goals (Sims, 2007).  It can be stated as the capability of an organisation to deliver the maximum output with minimum utilisation of resources. An organisation with higher efficiency manufactures its product and services without any wastage of its resources. Organisations tend to achieve higher operational efficiency for meeting their desired targets and thereby enhance the profitability.  Organisations should possess good leadership, decision-making, flexible organisational structure, efficient work process and skilled human resources in order to achieve higher operational efficiency.  The effectiveness of an organisation can be measured through assessing its financial performance, structure, cultural values, beliefs and its human resource policies. Organisational effectiveness is required by the business firms for sustaining in the market and outperforming the competitors.  Strategic use of human, financial and technological resources of an organisation facilitates it to achieve higher operational efficiency (Armstrong and Stephens, 2005).

Businesses should achieve higher organisational efficiency for achieving competitive advantage necessary for their sustainable growth and development (Sims, 2007). The management of an organisation can access the areas of improvement through identifying and accessing the difference in the achieved profitability with that of target profitability. This would help senior managers of an organisation to take corrective steps for improving the lack of performance and thus achieve the desired objectives. Organisational effectiveness depends mainly on the successful adaption of changes relating to business processes, structure, job roles, technology and many others. Continual implementation of new and innovative changes is necessary for organisations to sustain in the dynamic business environment and thus achieving higher organisational effectiveness (Armstrong, 2006).

Change Management and Its Importance

Change management can be defined as preparing and supporting organisational people for successful adaptation of organisational changes for achieving desired outcomes. It can be regarded as a systemic approach to manage the individual as well as organisational changes in order to attain desired success (Anderson and Anderson, 2010).  There are mainly two level of change management, that is, individual and organisational change management.  Individual changes management refers to gaining an understanding of the employee behaviour’s and their actions on the implementation of desired changes.  It helps in making employees prepare for the adaptation of the necessary changes and motivating them to achieve new set targets and objectives. This can be achieved through providing an in-depth understanding regarding the importance of inculcating respective changes in an organisation for its success and development (Figliomeni, 2011).

Organisational change management refers to developing proper strategies for implementing a change in order to ensure its successful adaptation by the employees of an organisation. It involved identification of the major business processes and procedures mainly impacted by the implementation of respective change (Hamilton, 2007). It is followed by providing proper training to employees to improve their skills and competencies so that they are able to successfully adapt to changes implemented. Engagement of employees is absolutely necessary in change management process for gaining success. Organisations should not impose change on people and should focus on gaining support from the employees for achieving success from the its change management process (Anderson and Anderson, 2010).  

Organisations mainly undertake a specific change for improving its performance by modifying its business processes and structures. Organisational changes are necessary to be introduced for enhancing the operational efficiency and reducing the risk exposure (Somech, 2009). However, the changes implemented must be managed properly through the help of change management process to ensure success. Change management process enables an organisation to acquire proper support, overcome resistance and develop the necessary knowledge in the employees for implementing the changes. Change management process of an organisation is developed on the basis of certain principles. Change management principles include gathering support from employees, understanding the current situation, setting the desired targets, developing an action plan and proper communication flow (Hamilton, 2007).

Successful management of organisational changes is directly related to the performance and profitability of businesses. Organisation efficiency can be assessed through its performance that is directly linked to the effective management of changes (Somech and Wenderow, 2006).  The organisations that are able to successfully manage the changes have higher effectiveness. Organisational changes tend to modify the business process and procedures enabling it to achieve desired target quickly and easily. This can involve implementation of new technologies, systems, manpower and internal structure to achieve optimum efficiency through minimum utilisation of resources. Operational efficiency of an organisation is mainly dependent on the business systems and processes that need to continually upgrade through implementation of new and innovative changes. This is necessary for the survival and success of organisations through staying ahead of competition. Thus, organisations need to implement proper changes in their systems and process continually for improving its performance. This is mainly dependent on the change management process of organisations and thus it can be stated that it plays a vital role in organisational effectiveness (Markovic, 2008).

Impact of Change Management on Organisational Effectiveness

The effectiveness of an organisation can be enhanced through developing its core competencies, customer satisfaction and brand building. This in turn is dependent on the successful implementation and management of changes in an organisation. The introduction of a new technology or process facilitates an organisation to develop a unique product or service. The unique product or service developed can act as core competency of an organisation providing it a strategic competitive advantage (Somech and Wenderow, 2006). The quality of products and services of a firm is also likely to increase with the introduction of new organisational changes. This would help a business firm to achieve customer satisfaction and thus increasing its sales and profitability. Increased customer satisfaction would ultimately lead to customer retention and increasing loyal customer base of the firm (Markovic, 2008).

The change management process would result in brand building of an organisation by acquiring new customer segments (Somech, 2009). Thus, change management offers an attractive opportunity to the organisations to gain access to international markets. This will help the organisations to spread the risk, gain access to new sources of finance, reduction in operational cost and numerous technological advantages (Xue, 2016).

Therefore, it can be said that successful implementation of change management process is absolutely necessary for enhancing the organisational effectiveness (Pieterse et al., 2012). It results in employee empowerment through enhancing their skills and organisational commitment. It also facilitate in implementing necessary changes in organisation structure according to the desired objectives to be attained. In addition to this, organisational changes also facilitates in streamlining of business processes so that businesses can easily thrive in dynamic environment. Change management also helps the organisations to attain sustainable growth and mitigate the business risks thus increasing its chances of survival (Xue, 2016.).

The major steps involved in change management process of an organisation are as follows:

Gaining understanding of employees and organisation readiness

Gaining a proper understanding of the capability of employees and organisations to accept the change is of utmost importance in change management process. This includes complete assessment of knowledge, skills, abilities and competencies of employees to identify the problems that can be faced by them with the introduction of a specific change (Thomas, 2014). This would help the Human Resource Department of an organisation to develop training plan to improve the skills and competencies of employees for accepting the change. Organisational assessment would involve analysing financial, technological and human resources to identify the readiness of an organisation to implement the change (Anderson and Anderson, 2010).  

Change management strategy involves developing a vision to identify the processes and procedures to be impacted by the implementation of a specific organisational change. It should also take into account the resources to be acquired by the organisation for the successful implementation of the desired change (Pieterse et al., 2012). The vision developed by the senior management of an organisation must be communicated properly to all the lower levels so that all employees get full knowledge of the respective change. Strong leadership of top management is necessary for motivating the employees to accept the change planned to be introduced in an organisation.  Complete dedication and commitment of senior management is required for convincing the employees to accept the specific change (Vioet, 2013).  In this context, transformational leadership theory states that a leader should involve all its subordinates in creating a vision that would help in the implementation and execution of a required change. Transformational leaders seek to motivate their subordinates by involving them in all stages of change management process that results in enhancing their organisational commitment. Therefore, senior managers need to inculcate transformational leadership style for achieving success through change management (Krause, Gebert and Kearney, 2007).

Organisations need to overcome and minimise the resistance of employees to change through providing them proper understanding of the employee benefits with the introduction of a specific change (Belias and Koustelios, 2014).  This involves development of a proper communication flow so that all the necessary information regarding the change reaches to each and every employee of an organisation (Malek and Yazdanifard, 2012).

The successful execution of organisational change depends on its proper acceptance by the employees and the availability of all the resources at the organisational level. Management of an organisation holds the responsibility of developing confidence in employees so that they can easily adapt to a respective change (Vioet, 2013). In this context, expectancy theory of motivation states that employees must be motivated to achieve the expected results in the right direction. Employees should feel that the proposed change plan is directly linked to their personal growth and success.  Management of an organisation holds the crucial role of making employees believe that the planned change is feasible and would prove to be beneficial for them.  Employee’s ideas and feedbacks should be taken on a regular basis to identify their problems and taking steps for overcoming them during the change management process (Malek and Yazdanifard, 2012).  Also, organisations must ensure the availability of all the resources in advance required for the introducing a specific change.

The successful implementation of all the above steps is necessary during the change management process of an organisation that is directly related to increasing organisational effectiveness.

Conclusion

Thus, it can be concluded from the above essay that successful implementation of organisational changes is absolutely necessary for sustaining in the competitive business environment. Organisational effectiveness refers to maximising the organisation performance through improving its profitability. Change management is undertaken by an organisation to improve its performance through modifying the existing structure and processes. The introduction of new business processes and procedures results in higher productivity and quality of firm’s product and services. This will ultimately result in higher customer satisfaction and brand building of an organisation thereby enhancing its effectiveness. However, top management of an organisation holds the responsibility of communicating all the changes to lower level employees and overcoming their resistance to change. Employee engagement is absolutely necessary for an organisation to achieve success through change management process.

References

Thomas, O. 2014. Change Management and its Effects on Organizational Performance of Nigerian Telecoms Industries: Empirical Insight from Airtel Nigeria. International Journal of Humanities Social Sciences and Education (IJHSSE) 1(11), pp.170-179.

Armstrong, M. 2006. A Handbook of Human Resource Management Practice. Kogan Page Publishers.

Sims, R. 2007. Human Resource Management: Contemporary Issues, Challenges, and Opportunities. IAP.

Anderson, D. and Anderson, L.A. 2010. Beyond change management: How to achieve breakthrough results through conscious change leadership. United States of America: John Wiley & Sons.

Armstrong, M. and Stephens, T. 2005. A handbook of management and leadership: A guide to managing for results. Kogan Page Publishers.

Xue , C. 2016. Role of leadership in Achieving Sustainable Organizational Change: Steve Jobs. Imperial Journal of Interdisciplinary Research (IJIR) 2 (8), pp. 263-267.

Figliomeni, C. 2011. Change management process for information technology. United States of America: Xlibris Corporation.

Hamilton, C. 2007. Communicating for results: A guide for business and the professions. 8^th ed. Cengage Learning.

Krause, D.E., Gebert, D. and Kearney, E. 2007. The benefits of combining delegative-participative with consultative-advisory leadership. Journal of Leadership & Organizational Studies 14 (1), pp. 16-25.

Somech, A. 2009. The effects of leadership style and team process on performance and innovation in functionally heterogeneous teams. Journal of Management 32(1), pp. 132-157.

Somech, A. and Wenderow, M. 2006. The impact of participative and directive leadership o teachers’ performance: The intervening effects of job structuring, decision domain, and leader-member exchange. Educational Administration Quarterly 42(5), pp. 746-772.

Markovic, R. 2008. Effective Organizational Change Management. Serbian Journal of Management 3 (1), pp. 119 – 125.

Vioet, J. 2013. The effectiveness and specificity of change management in a public organisation: Transformational leadership and a bureaucratic organisational structure. European Management Journal xxx, pp. 1-10.

Belias, D. and Koustelios, A. 2014. The Impact Of Leadership And Change Management Strategy On Organizational Culture. European Scientific Journal 10 (7), pp. 451-469.

Malek, R. and Yazdanifard, R. 2012. Communication as a Crucial Lever in Change Management. International Journal of Research in Management & Technology (IJRMT) 2 (1), pp. 52-56.

Pieterse, J.H. et al. 2012. Professional discourses and resistance to change. Journal of Organizational Change Management 25(6), pp. 798 – 818.