OB assignment essay on: Change management

Introduction:

Change management is about implementing changes and addressing resistances to change. It is also about equipping employees with capabilities so that they can cope with changes effectively. Change management is not an instantaneous process but a long drawn extended activity. Managing change is one of the critical factors of success for any organization.

The issue arises that should change leaders or agents be internal (drawn from inside the organization) or external. Who is more effective in managing change? An analysis of this issue follows.

Summary:

A critical analysis of change management and the effectiveness of internal and external change agents in handling these changes is done in this report. A few recommendations have been made based on this critique. Whether change leaders should be drawn from inside the organization or outside of it should be determined by the unique circumstances of the organization and the nature of change which is to be implemented.

Critique:

Today’s business environment is much more complex and dynamic than it was in much of the last century. Technology has almost eliminated the asymmetries of information between producers and customers. The fall of socialism around the world has led to opening of national economies. This has intensified competition. Competition has been given a further thrust by the emergence of Third World corporations which are posing a tough competition for corporations from developed economies.

In such an external environment, corporations can survive by continuously changing themselves in response to the changes in the external environment. Change is the one big constant in today’s business world which is changing every moment. Change management has become one of the critical factors of success. Organizational leaders are being judged on their capability to manage and implement changes in their organization (Stephen P.Robbins, Timothy A. Judge, Seema Sanghi, 2010).

The role of change agents has become critical. They act as catalysts of change and assume the responsibility of managing change. The changes that an organization can undergo include changes in strategy, changes in technology, changes in organizational structure, changes in processes, changes in management etc (Whelehan, S,1995).

Change agents can be managers or non-managers, current employees of the organization, newly hired employees, or outside consultants. So who can act as a better agent of change: those from inside the organization or those from outside it? In my opinion the answer to this depends on the circumstances of the organization facing the change and the nature of the change that is to be implemented.

Take the case of the iconic Harvard University. A few years ago the University was finding itself as an institute that had become stagnant in many of its aspects including the curriculum of undergraduate courses. Everybody felt that change is needed at the institution. For introducing this change Larry Summers, a noted economist and former US Secretary of Treasury was appointed President of Harvard University in 2001.Summer introduced aggressive changes in Harvard. His change efforts met with tremendous resistance from Harvard’s formidable faculty members. Summer’s changes however got support from the student fraternity of the institute. In spite of this, Summers had to eventually step down in 2005 from his post after a no-confidence resolution was passed by Harvard’s faculty against him.

Summers was hired by Harvard University as President to oversee change. His efforts failed because of his aggressive approach and the resistance of the employees of Harvard.

Internal change agents who have experience in working with the organization have better understanding of the dynamics of the organization. They can handle resistance to change better because they are likely to have a better understanding of organizational politics. This insight into organizational politics is critical for managing change successfully. External change agents have a disadvantage here as they do not understand organizational politics as well (Richard Arvid Johnson ,1976).

Internal change agents have a firsthand experience with the problems of the organization that call for changes. This understanding may give them the ability to recommend and handle changes in a better manner. External change agents have to rely on the information given to them by members of the organization for understanding the problems that the organization is facing.

Internal change agents can get involved in organizational politics and act as a vested interest while implementing change. This frustrates the whole process of change and the objectives behind implementing change. External change agents like consultants enjoy an advantage here. They are not likely to get involved in organizational politics (Kotter, J,2011).

External change agents enjoy the perspective that comes from observing the organization from outside for an extended period of time. This perspective can be much more objective and accurate about the problems that the organization is facing and its need for change. For instance an organization which is suffering from delivery of poor customer service can get better recommendations from an external change agent on how to go about improving customer service.

Managers often know that the performance of their organization can be improved but are unable to identify the processes where changes can be implemented. External change agents like consultants can be very effective here. Process consultation involves taking the service of an outside consultant for recommending and implementing changes in processes so that the organizational performance can be improved (Anderson, D. & Anderson, L.A,2001).

External change agents are also more effective for implementing technological changes because of their expertise in the area. Technology is driving many of the changes in organizations today because it is changing the way business is done. Technology is changing the way in which products and services are delivered to customers. Such technological changes require changes in processes, changes in the skills of the employees and changes in the way things are done in the organization. So, technological changes too can cause a lot of resistance among the employees of the organization (Richard Beckhard, 1969).

.The decision on whether change leaders should be internal or external should be decided after considering the following parameters:

i)                    The nature of change.

ii)                  The situation in the external environment.

iii)                The circumstances of the organization.

iv)                The competency of internal leaders like managers to recommend and implement changes.

If an organization is facing a crisis situation which requires for immediate implementation of changes then an external agent can be better placed to handle such situations. He can leverage his capabilities and core competencies to manage the change in a high pressure crisis situation.

Cost-benefit analysis should be done while taking a decision on whether to hire an external change agent like a consultant. Consultants often charge heftily for their services and recommendations. The benefits likely to be accrued from implementing the change should exceed the costs of hiring an external change agent (Phillips, J. R, 1983).

I will recommend an internal change agent for changes like change in organizational structure or changes in organizational strategy. On the other hand I will recommend an external change agent over an internal one in circumstances like process changes and technological changes.

A better approach is to use both internal and external agents when the changes to be implemented are complex. The external agent can make better recommendations on the basis of his expertise. The internal change agent like managers or CEOs can work with the external change agent for implementing the recommended changes. Many organizations in the past have used both internal and external change agents simultaneously for implementing changes successfully.

The most important aspect of change is the human aspect (Bradford, D.L. & Burke, W.W. eds, 2005). Whether it is the internal agent or external agent, he should have good understanding of human behavior. Empirical evidence shows that the most successful change agents have been Chief Executive Officers.  CEOs like Steve Jobs have implemented and managed changed effectively in iconic companies like Apple.

 Conclusion:

In some circumstances internal change agents can be more effective in managing changes while in others external change agents can do a better job. There are advantages and disadvantages of both internal change agents and external change agents. Who can be more effective in managing change depends on the circumstances of the organization and the individual capability of the change agent. The past reveals that in many instances internal change agents were successful in managing change while in many other instances external change agents proved to be more effective. A successful change agent has a good understanding of human behavior; he has understanding of the technical aspects of change; he has good interpersonal skills and he enjoys sufficient authority so that he can overcome resistance and implement changes. No wonder then those CEOs who have all four characteristics have been the most successful change agents.

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