This is a typical case of change resistance, the inability of the upper management to keep the employees satisfied and complexity of meeting the organization’s long term goals. Frank Simpson, the President and stockholder of a video electronics company finds himself in a fix when the company is in its 10th year of production. Although the company had started off very small, in a few years it had reached unprecedented levels. However, as it grew larger, profits started to decline. The demand was much higher than the production and supply levels. Simpson hired triple the amount of workers but to no avail.
It got to a point that the company was only breaking even and it was imperative to do something drastic before it was run over by a competitor. The company was based in a small town with a total of 15,000 people. The majority of the labor that was hired at the company was unskilled and paid by the hour. They had no formal training, labor unions or an overall vision of where the company was headed. At this point in time, Simpson decided to bring in an outsider for one of the highest level managerial positions. He would have the responsibility of reporting to him.
Although Simpson realized that the employees were already resisting the change, he mostly ignored their fears. Soon, John Rider a person with the right qualification was hired. Rider hired Paul Green to develop the industrial engineering function. As soon as he came in, he started studying the current processes for two months. He and Rider realized that there was potential to increase productivity by 25 per cent and reduce costs by 35 per cent. This could only be done by making some major changes. One of his first changes was to study the current processes and document them onto paper.
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Not only would this convert this tacit knowledge into explicit knowledge or manuals but it would also help them evaluate how and where to make the changes in the process. Little did they know that when the two managers left for some business, there was a mutiny behind. Older workers who thought that their roles might be eliminated or were at risk barged into Simpson’s office and asked him to not let Green conduct the study. Question 1: If you were Simpson, what would do now? What would do later, if anything? What behavioral models and ideas are involved in your thinking?
Simply stated, Simpson has made a mistake in forcing the employees to a change they don’t truly understand or want. Telling them that the company will be out of business makes the management look selfish and unconcerned about the employees. It is true that if the company goes out of business, there will be no jobs for the men. However, right now they feel so threatened that they cannot help but be unreasonable and resistant to change. He should listen to all their key concerns and ask one of their representatives to come and meet with Green, Rider and himself.
Both should debate and discuss their points of views and come to a conclusion. Since it seems that there is no way out of the dilemma and change is badly needed therefore hiring a change management consultant would help in this transition. This would also mean that a corporate vision or a plan needs to be relayed to the employees so that everyone is on the same page. Another aspect which needs some changing might be the wages. It seems that employees are wasting time so that they are paid by the hour. Instead, an incentive based system might work better.
Motivational techniques are badly needed to help gain the employees trust again. One way that a change management consultant can help is by training them and transferring skills that would not only help the company but would also motivate the employees. Question No 2: Should Simpson have permitted the supervisors to see him? Since they now report directly to Rider? Since Simpson is also a stakeholder at the company, he has a right to know how upset the employees are at this change. Since Rider and Green are both younger and newer employees they might not have taken their resistance so seriously.
Simpson did the right thing by letting them see him. However, the actual change or the after effect of this should be carried out by Rider. If Rider isn’t the one taking action then his authority in front of the employees would lessen. Question No 3: What kinds of changes are taking place in this case? What are the effects of these changes? What ideas about change will help in the transition? In essence, this is a people-centered change. The whole process of hiring an outsider to come up with ways to make the employees processes better makes the employees shaky and their status quo is affected.
They feel their jobs might be at risk. They feel vulnerable and violated by the study. It is as if they have been doing the processes wrong and these new employees are going to correct it. What they don’t realize is the fact that improvements and overall betterment is on the minds of both Rider and Green. Also, changing the processes to make them leaner would lead to downsizing. This change could take place smoothly if only proper communication, motivation, leadership and interaction is garnered between both groups. The change in processes would mean that the old knowledge will no longer be as important.
Once everything is documented, key people who are now running the processes based on their knowledge and experience will not be that important anymore. Therefore, a techno structural and human process change is also taking place simultaneously. This can be fixed by training and development and by addressing the fears of the employees. Question 4: Do the three stages in change (unfreezing, moving, and refreezing) apply in this case? Discuss? They do apply in this scenario because the whole organization is currently in the unfreezing mode. Old patterns, behaviors are being evaluated.
Information is being collected about the current state. Very soon, new policies, procedures and behaviors will be designed to improve the situation. Once they are applied, the organization will move into the moving stage. Once the change has been properly implemented, then it will refreeze these newly learnt behaviors. Until, a time will come that the organization will need to move back into the unfreezing stage and change those behaviors as well. This process should go on repeatedly if an organization wants to call itself a true learning organization.
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