Assignment - Managing OrganizationalChange Thursday, December 15, 2011 at 7:25PM | Adrian Keys | Post a Comment | Share In approaching this post, the organisation being considered will be looked at briefly. This will be followed by, in this case, recent external factors triggering profound change in the said organisation. (Change is being taken to mean making things different). Technological change will be the main focus for assignment although other areas of change will be touched on briefly.The organisation being considered is a merchant bank - Manufacturers Merchant Bank (MMB) as it operates in the current year 1999. In the Jamaican context, merchant banks are not typically providers of long term funding like their international counterparts but , as is today, serve clients in such areas as Funds Management, Foreign Exchange Trading services, Corporate Finance and on a much reduced scale Fixed Deposits (Deposit-taking) and Credit Services (On-lending) . There are over twenty merchant banks in Jamaica competing in many ways with commercial banks and investment houses.Change at the bank has been triggered by unstable economic conditions and new banking regulations which have virtually revolutionised merchant banking as we know it over the last three to four years. These economic conditions in the main include high levels of inflation, currency devaluation, and prolonged periods of high interest rates. All these have made for the banks credit clients being unable to meet their monthly obligations. Consequently the result has been huge loan write-offs and unthinkable losses. Needless to say investor confidence is at an all time low. To compound problems bankers have found that with the overall poor state of the economy there was little hope of successfully realising collateral such as motor cars and real estate used to secure credit facilities extended to clients.In addition to these adverse economic conditions the Bank of Jamaica (Jamaicas Central Bank) in attempting to control money supply increased cash reserve requirements and by extension liquid assets reserve requirements with the effect of almost making the business of Deposit-taking and On-lending (the banks core business at the time) extinct. The effect was that banks in order to cover interest costs had to charging high interest rates on loans which could not be maintained by borrowers. In addition, at just about the same time clients became aggressive in seeking alternate investment instruments which did not attract income tax at source like Fixed Deposits - the main investment instrument of choice up to that point...MMBs response to these external forces was to radically shift the business focus to ensure survival in the harsh economic climate. The new focus was more on Corporate Finance, inter-mediation in accepting and placing funds (Funds Management) and Foreign Exchange Trading services. The move away from Deposit-taking and On-lending, in particular, meant the bank could, by providing inter-mediation services pass funds on to borrowers at a much reduced cost and at the same free itself from risk so inherent in its previous business focus.(A) Describe a recent change in your organisation, or a specific part of it.With the profound impact of the external forces (triggers) it meant widespread change was necessary in order to ensure survival. This process started with the removal of the then Managing Director and the installation of new, younger and more vibrant Chief Officer. As the change agent he set about putting in motion the process of renewal immediately. Almost every aspect of the banks operations required change. In the context of Harold J. Leavitts structure of organisational change, MMB was required to change many of its internal processes- its tasks, a substantial portion of managers and employees - its people, lines of authority and unit/department functions - its structure and its techniques and tools - its technology. These changes of course would have been easy to imagine given the interlocking nature of these dimensions.As was mentioned, a more detailed look will be taken at technology as the force of change at MMB. It is on this force that the second part of the assignment will be centered. The section ends with a brief look at the kinds of resistance to the change coming from staff.Trading requires a structure that facilitates speedy and efficiency processing. Typically spreads on trading volumes are low so that it is important to be able to process many transactions with the minimum of ease. As such the entire technological structure of the bank which was built around the slower paced business of Deposit-taking and On-lending had to be completely overhauled.This process involved a detailed look at existing hardware and software and in-house competence. An assessment was the made of kinds of transactions and services that would be provided going forward and the kinds of systems that would need to be in place for support. The concept of the structure in mind was to set up an integrated system that would essentially require a one time input of deal/transaction information. From this point all approvals by Unit Heads, Division Heads would have been effected on the system and the cheque cutting, cashiering and documentation functions facilitated with minimum additional input of information to the system. This would significantly cut the processing time required in any transaction.The assessment phase which required considerable participation and feedback from staff did not have the desired effect. Management none-the-less thought that the change was all important and inevitable to keep up with the new business focus and competition that had become more intense with passing time. A steering committee which included only members of the management team was set up to oversee, develop, test and implement the new technological platform. The mandate of the committee was quite clear: Develop an integrated software programme to effectively manage the banks new and chosen core products and services, and facilitate a process of reorientation while training staff to become masters of the new approach.As mentioned there was little feedback from lower level staff especially those who had been employed to the bank for a long time. In one on one situations staff expressed that with all the foreseeable technological changes the need for certain job functions would be made redundant with the con-committant loss of employment. Others felt that although they could see the benefits they were uncertain as to how they would fit in the new structure.Arthur Bedians four common causes of resistance to change (parochial self interest, low tolerance to change, contradictory assessments and misunderstanding and lack of trust) sums up the mood at MMB at the time.(B) To what extent was this change designed to achieve empowerment within the organisation? Identify the interventionist techniques used and assess the success/failure of the change to achieve greater empowerment.As was mentioned, technological change will be the focal point especially with answering this second part of the assignment in mind. Empowerment is taken here to mean putting workers in charge of what they do: In other words, less supervision being required by managers with workers being allowed to determine processes, make decisions, etceteras. In this section the extent to which the technological change was designed to empower workers will be analysed.Prior to the technological changes there existed very identifiable problems with the structure (physical layout) of the bank. The bank was split into two floors with units/departments with separate filing systems located in areas which did not make for good work flow.Inevitably pockets of information developed and was compounded by staff who felt they had territory to protect especially if they in any way felt threatened. Certain individuals ended with key information pertaining to certain transactions which caused a major problem in continuity especially when staff decided to move on.All this resulted in problems in communicating with clients on a day-to-day basis if certain staff were unavailable. Staff at the operating level often times did not have all the information and as such senior managers had to be constantly consulted on sorting workflow and other problems and in making decisions at all levels. Senior managers felt that with the fragmentation of information and constant errors, close supervision was a necessity.The technological change while not giving total control certainly was designed, among other things, to put staff in better control of their day to day functions. Empowerment was targeted trough a new technological structure that would allow: The one time capture of information to ensure that staff had full and correct information at their fingertips to pass on to clients; Quick and easy generation of reports that provide key information for use in analysis and forecasting and decision making; Flexible system design that allow for suggestions from staff to be incorporated in system design; Simple speedily and efficiently processing of transactions meant to minimise errors and lessen close supervision; Decision making on full and accurate information hence lessening the chance of serious mistakes. In addition with speedy processing, staff could complete tasks on time hence reducing the need for long work hours and overtime work; Reports could processed without any great effort and delivered in a timely fashion.In embarking on the technological revolution at the bank it is fair to say that there was no systematic approach from management as to which areas in the bank to intervene and in what order to move the process forward. The approach was more to select areas that obviously needed changing. With more knowledge in hand the intervention process used by management to move the process forward is similar to those described under Selfridge and Sokoliks Interventionist Strategies. A closer look shows that it is those strategies aimed more at structure and tasks that were used and less of those targeted at individuals and their emotional state and groups and their inter-personal relationships.At this stage of the assignment a fit between the various areas of focus use at MMB in stimulating change and those identified by the Interventionist strategies of organisational change and development is made. The identifiable strategies include:Organisational StructurePrior to the change process there was no cohesive approach to the technology issue. The function was performed within the Operations Unit and the emphasis was on support as opposed to providing solutions. The intervention here involved the formation of an Information and Technology Unit staffed by two. The function was removed from the umbrella of operations and given the mandate to assess, recommend, develop and implement technology that would assist the bank in delivering its products and services.Functional Policies and PracticesIn order to ensure that projects that were apart of change process completed on time and within the organisations means, the Information and Technology Unit like the strategic units was given a budget within which it was required to work. In addition, deadlines were developed for the development ad implementation of projects. These were assessed from time-to-time in the monthly steering committee meetings and certainly, where possible, in the normal appraisal process.Management DevelopmentHere the intervention was based on the fact that additional training and development was necessary for senior managers especially for those who had been with the organisation for a long time. It was felt that with this knowledge manager could better communicate the overall dream and benefits of implementing the new technology and train and develop subordinates more effectively. The training included on the job training arranged by the Information and Technology Unit and relevant training seminars from external sources.Job EnrichmentWith the new technology available and through the electronic mail system staff was encouraged to provide feedback on work flow and to suggest ways in which things cold be done more efficiently. One useful innovation was the problem log introduced by the Information and Technology Unit which documented user problems and provided a useful resource for enhancements to the system. In addition through the forum of meetings, the user could outline problems and make meaningful suggestions as to how their tasks could be done more efficiently. The in-house programmer was able to document useful suggestions for use in future system design.Inter-group BehaviourBy consolidating all work groups on one floor an attempt was made to foster greater understanding of tasks and work-flows. The fully integrated system forced workers to see how important their input was to the eventual delivery of products and services. Also, with the information available for everyone to see staff would not have the need to protect territory and hence less tension would facilitate greater teamwork.At this stage the success or failure of the technological change will be assessed in relation to empowering staff. J. Kotter and L. Schlesingers model of organisational change and development will be used in assessing this success or failure.As mentioned before empowerment puts people in charge of what they do. The technological change described has had mixed success in empowering staff. Undoubtedly there has been marked improvements in transaction flow, speed, efficiency and greater transparency of information. However while some staff gravitated to the technological dream from the very outset and are now quite at home others have been slow to accept the inevitable winds of change.With the technological change still very much in progress and with workers being made redundant as the automation process progressed there are workers who are still concerned about the reduced content of their jobs, job security and economic survivability if the worse was to happen.In the context of Kotter and Schlesinger and in retrospect the technological change process at MMB could have been far more effective with better education and communication. In hindsight the technological dream was never put in proper context and articulated to staff in a clear and concise manner. Neither was it reinforced enough. The kind of counselling mentioned by Kotter and Schlesinger was never thought of and not enough effort put into allaying fears of workers about their job insecurities.Kotters and Schlesinger,s second dimension - participation and involvement - was never a priority until recent times. Management always thought that the change through technology was necessary and inevitable because of the external forces and was always prepared to proceed with or without the support and acceptance of lower level staff. This in part explains some of the resistance mentioned earlier. This lack of participation and involvement has come back to haunt MMB as without this valuable input hours of development work has had be discarded or was not implementation worthy because of the lack of functionality.With facilitation and support MMBs management ignored any kind of counselling programme that could have helped workers overcome their fears to change. The preoccupation was to press ahead with the change process with no serious attempts made to address concerns whether at the group or group level.In a couple of instances apart from the natural process of redundancy, workers were given marching orders out of their refusal and reluctance to make necessary adjustments to facilitate change process. This further contributed to existing jitters about the changing taking place. This embodied the explicit and implicit coercion Kotter and Schlesinger spoke about.Kurt LewinIn the context of Lewins model of organisational change and development, the mixed results of the technological change process in empowering workers at MMB are better understood. According to Lewin the initial phase in any change process is the unfreezing the existing status quo.This may involve the use of what lewin calls driving forces which are forces that direct behaviour away from the status quo. In MMBs case while computer literate workers would have been more secure in their jobs there was no incentive put in place to encourage staff to take on external skills courses in computer technology.Further Lewin argued management could look at reducing restraining forces. These are forces that hinder movement away from the status quo. This by using counselling to set the fears of workers aside. Again as mentioned this was not utilised by MMB.The use of either of these forces or a combination of both it seems certainly would not have done any harm to the process of empowerment being approached through technological change.Action ResearchWhile this model in general would not have been quite suitable to the process of change at MMB it is also apparent that a similar structured approach trough diagnosis, analysis feedback, action and evaluation again could have added to the credibility of the process. With this kind of approach, Operations staff would have been given a greater chance of participating, that is, in identifying problems and their root causes and also in providing invaluable feedback on the process of change. MMB could well be guided by such a systematic approach in the future.ConclusionThe assignment begun with a description of the external forces - adverse economic conditions and central bank regulations which triggered profound change in the various dimensions of the bank. It can be asserted that with these powerful forces, change was inevitable and would affect the length and breadth of the bank as illustrated by Leavitts interactive model. The focus of the assignment, however, was technological change and the approach to the process was described.In the second part of the assignment, it was shown how the process of technological change was designed to achieve empowerment and an attempt to fit the Interventionist strategies to the process was made. It was shown that only a few of the identifiable levels were used by MMBs management. The approach was very unstructured. With the strength of the external triggers, only change was certain, the how and when was never answered in a systematic way.Finally various models of organisational change was used to show the extent of the success/failure of the change top empower staff. It was shown that the change process was still ongoing and that it had achieved some measure of success. However by fitting the process to approaches to change management as suggested by the different models, it is obvious that a greater level of success could have been achieved with less trauma to the system. For the remainder of the way there is no doubt that what has been learnt from these approaches could be gainfully applied to managing change at the bank.