Explain leadership in terms of Chain Management.
In the change management, leadership plays an important role in terms of developing change and implementing it in a proper way to benefit the firm. But, due to the separation of leadership and change management, most of the organisations face difficulties and struggle to effectively implement the change programs. It negatively affects the culture and working environment of the organisation that consequently affects the profitability as well as competitive advantages (McCalman, Paton and Siebert, 2015). This paper discusses the nature of the change with the help of a case of WebGate. Along with this, it also evaluates the effectiveness of approaches that used by the organisation to change. At the end, it also recommends some ways that can be used by the firm to make a better approach to the change, dilemmas faced and the actions to mitigate these dilemmas significantly.
Nature of Change
In the given case study, the nature of the change is related to the strategic and structural change. It is because WebGate wants to changes in the products and services as well as leadership so that it can achieve profitability and competitive advantages significantly. In this, the strategic change is mainly related to the changes in business operations, products and services offerings in order to achieve the ultimate goals of the organisation. It also includes the changes in mission and vision statement of the organisation in order to make effective responses to the demand of external environment (Rafferty, Jimmieson and Armenakis, 2013). Overall, it can be said that the strategic change involves the changes in the fundamental approach of doing business.
On the other hand, the structural change mainly relates to the changes in organisational structure or redesigns the structure of the firm in order to eliminate the influence of external environment. The structural changes also involve the changes in the hierarchy of authority, administrative procedures, structural characteristics, and management system. Through this, the firm can effectively meet the needs and demands of the customers in the respective sector (Reiss, 2012). On the basis of this, the nature of changes in WebGate is as follow:
a) Change in Corporate Strategy: – Company changes its corporate strategy due to less demand of customers through IBM products and services. It broadens the scope to get non-IBM products and services. For this, it is necessary for company management to change its business strategy to achieve goals. Through this, the firm can gain the market momentum due to hiring a new team of existing employees of WebGate consulting AG (WGC) (Henley Business School, 2015).
b) Leadership Structural Change: – The Company CEO had good plans and ideas regarding company’s growth. The change can be seen in the company that the most of the existing employees and customers of the WebGate consulting AG shifted to WMS. It means that the entire changes in the corporate level as well as leadership level in the company is commencing first time. This change helps the firm to shift its concern towards the new vision and opportunities. Due to the democratic style of leadership of CEO, employees also enable to share their values and opinions regarding company’s growth. It enables the organization to enhance the effectiveness of its value in the international market, especially in Europe. This implementation of change provides the new opportunity for the company and due to lay off some important teams of the WGC; it would be the beneficial change for WMS (Henley Business School, 2015).
It is identified that the engineering team has a good experience of architecture and consulting for IBM. It helps WMS to use some of the important resources for required tasks. Likewise, Development and Support team focuses on migrating customers of IBM and provides collaboration solutions, support platforms, operating systems and applications and provides 24*7 assistance to the company. Similarly, Sales and marketing team has a strong experience of IBM background in the past to access new customers for the company (CliffsNotes, 2016). These above two major types of changes affected the company. It also manages the change positively and affects the day-to-day operations of the company. Management of company implemented these changes strategy slowly in the company to achieve revenue, growth and profitability of the business.
Effectiveness of Organisation Approached Change
WGC wants to spin-off the existing hosting business into a separate and different company to be called as WMS. So, for this spin-off, WMS effectively approached to the changes in the organisation. For implementation of change in WMS, the management team prepared the vision and mission statements, which indicated that where the organization wants to reach in future, profit ratio and overall growth. Vision and mission statement also helped in developing understanding about the new partnerships and alliances requirement, which also supported in achieving goals and moving towards the way of success (Goetsch and Davis, 2014). After preparation of vision and mission statement, it is circulated throughout WMS so that transparency can be demonstrated. It also helps WMS’s employees to adapt changes in order to attain organizational goals and they can also keep them updated about the changes going to occur in WMS. This step towards change by WMS was very effective as it made clear about all the changes going to take place in organization to employees (Thompson and Martin, 2010).
At the same time, it is found that the leadership style followed in WMS was a mixture of both democratic and authoritative leadership styles. Democratic leadership is also called as participative leadership. It is a style where the employees of organization take effective role in decision-making process. In this leadership style, ideas and thoughts are exchanged freely, and manager provides equal rights and chance to get participation in the discussion for making effective decisions and strategies (Frankel, 2012). Democratic style of leadership focuses on the equality of all the employees and the leader provides them guidance and do not put decision on employees. This increases the creativity of employee and morale towards work. It leads to higher productivity, more contribution from employees and ultimately leads to better decision-making because of new and innovative ideas from employees (Freeman, 2010).
On the other hand, it is evaluated that in the authoritative leadership style, which is also known as autocratic leadership style, the leader makes his control over the decisions. In this leadership approach, there is a very little or no input from group members in decision-making process. Autocratic leaders take the decision on their own choices, ideas and judgement and very rarely take suggestions from employees. Autocratic leadership plays a very important role in some instances like when decisions have to make at a faster pace without making discussions with employees (Raineri, 2011). The autocratic style is very useful when a project requires strong leadership so that the project can be able to complete on time and with effectiveness. If the leader has great amount of knowledge and is very effective in decision-making then this style is beneficial.
At the same time, it can be evaluated that in this leadership approach sometimes, a leader is required in an organization to take charge of employees, assign the tasks and give deadlines for completion of project in order to timely accomplishment of objectives. This style of leadership also allows employees to perform only a specific task without getting worried of making crucial decisions. This leads the employees to perform only specific work, which inhibits specialization in employees to perform task with greater effectiveness and efficiency (Polasky et al., 2011).
WMS follows both autocratic and democratic style of leadership and this proved very effective for change management. As one side, the leader or manager being democratic and asked for feedback, taken suggestions from employees in decision-making process, supported and listen to problem of every employee (Preston, 2012). On the other side, leader being autocratic by assigning task to employees for timely accomplishment of goal and objectives. Using of both autocratic and democratic style of leadership in WMS proved very effective in terms of moving organization towards the vision and mission and implementing changes.
WMS made vision and mission statement properly and all the factors were considered while making them but, the biggest mistake done by WMS was that there was no strategy built to implement vision and mission statement in the organization. Due to this, organizational objectives cannot be attained as there was no proper consideration given for implementation of vision and mission statement in organization (García-Morales et al., 2012). For implementation, the firm required transition manager so that implementation of change in organization can be done easily and the problems of employees can also be solved out regarding change taking place in organization. In the case of WMS, no transition manager was appointed, which was the biggest drawback and managers also do not given focus towards implementation of change.
From the case, it is also evaluated that the organisation wanted to make strategic alliance with other companies along with the IBM but, the firm was not maintain its focus on cultural change management. It is found that when there is alliance between two companies, culture plays a very important role in the performance of company and attainment of objectives as there are different people from different culture. But, in the case of WebGate, due to less consideration on cultural aspect, the existing and new employees were not felt comfortable to work with each other (Freeman, 2010). This ultimately affected organization growth. So, WMS should make some strategy to manage cultural change.
From the case analysis, it is found that WebGate approached to the change through considering change through emergence strategy. In this, the CEO assumed that it is essential for the organisation to establish new firm so that competitive advantages can be achieved. In this, the CEO developed the strategies to according to the change needs. After this, the manager also communicated the change plan to all the stakeholders and shareholders significantly. This strategy helped the firm to communicate the change messages to the stakeholders, which supported it to implement effective change management process (Daft, 2014).
But, at the same time, it is also evaluated that the lack of effective planning negatively affected this approach of the management to bring changes in the firm. It is because emergency approach to change requires proper and detailed planning related to the change and process (Goetsch and Davis, 2014). In the case of WebGate, the management was less concern over the planning that negatively affected the implementation process of change.
Overall, the effectiveness of change approached by organization can be analysed out from the following points-
• More focus on preparation of mission and vision statement rather than on implementation.
• Different obstacle to block the new vision like employees does not want to make any new alliance except IBM (Herrmann and Felfe, 2014).
• WMS failed to create short-term wins, it only focuses on long term wins i.e. achieving mission and vision statements.
• WMS do not align and coordinate 7s in organization during change i.e. system, skills, structure etc.
• WMS neglect to anchor changes steadily in the organization.
All the evidence shows that sometimes, highly planned change has a high failure rate. Many times there is just a simple idea that works and that idea is people in organization are purely rational with the time (Strom et al., 2014). It is found that there are few people in organization, who understands the proper change management process. So, while approaching change, different perspectives should be considered in order to understand the change better and making policies accordingly.
Challenges and Recommendations
It is essential for the firm to effectively implement the change process by using theories and approaches that are best suited to the organisational environment as well as employees of the organisation. From one of the studies conducted on organisational change management, it is found that in the organisation, due to change management practices, 90% of managers are affected in direct and indirect ways. In this, this figure also rises at 97% in public listed companies. In this, most of the managers believed that change management practices negatively affect their motivation level, sense of employee well-being, morale, loyalty, and sense of job security, etc. (Henley Business School, 2015). It is because changes in organisation influence all the stakeholders in negative ways that reduce their motivational and morale level within the firm.
In this, the use of an effective change management approach is essential for the organisation to manage the change significantly. There are various change management approaches and strategies that can be used by the managers and owners to implement and manage the change successfully. It is because these models and strategies provide the right directions to the managers to implement the change management process to achieve success and competitive advantages (Reiss, 2012).
In the case of WebGate, apart from developing vision and mission for the change, the CEO can develop the effective framework that can be used to implement the change. In this, the consideration of Seven S Framework would be effective to show the interrelationship between different aspects of corporate strategy. Due to this, the CEO can also develop the cohesive change strategy, examine the organisation and identify the factors that can contribute to the organisational success (Peters and Waterman, 2012). Through this, the CEO can effectively approach the change by fulfilling all the expectations of stakeholders and business needs.
In this, the consideration of three stage framework of Lewin can be effective for the manager to make a better approach to the change within WebGate. The three steps of Lewin model includes unfreezing, moving and refreezing, which can help the manager to eliminate the previous behaviour and attitude of employees and adopt new changes to provide success of the business (McCalman and Potter, 2015). It is analysed that by using this change model, the CEO of WMS can effectively recognise the old behaviour, structure, processes and culture and eliminate these to implement new changes significantly.
At the same time, it is found that to develop the business opportunities for hosting business of WMS, the CEO also made some changes in the teams of WGC. This approach towards the change can be effective in developing the required skills and knowledge among the team members so that the CEO can make the change successful within the hosting business. Due to this, the CEO can also quickly build the new skills of team members about the new technologies to perform the business activities of WMS (Dievernich, Tokarski and Gong, 2014). To make a better approach to the change, the CEO can adopt an effective change management procedure.
In this, it is analysed that the adoption of Kotter’s eight step model can be effective to make effective change management. It is because, through this model, the CEO can generate the urgency of change among the employees and other stakeholders of the organisation. Due to this, the CEO can also examine and communicate the business opportunities to the stakeholders (Lawrence, 2014). Along with this, this model can also support in strengthening the developed vision by considering the organisational values and strategies. Along with this, the adoption of Kotter’s change model can also be supportive in creating short-term wins that can be effective in motivating stakeholders and investors to contribute to the change (Cohen, 2013).
Along with this, to make a better approach to the change, the CEO can adopt a significant approach to change called change through addressing interest. In this approach, the owner can address the interest of each stakeholder at an early stage of change. Due to this, the CEO can effectively implement the change management process. It is because after addressing the interest for each stakeholder, the CEO can identify the resistance to change and any error in the change (Munsaka, 2013). Through this, the CEO or manager can eliminate this error that can be effective in implementing change process successfully to achieve the ultimate goal of the change.
At the same time, through facilitating clear communication between the interested people, the manager can also make a better approach to the change. It is because, through this, the manager can communicate the information to each the stakeholder clearly that can be supportive in establishing effective decision-making process for each stakeholders. In addition, the manager can also provide a map to the stakeholders regarding the possible strategies that can be used to make the change successful (Lewis, Passmore and Cantore, 2011). Through this, the manager can get the effective participation of each stakeholder in the change process that can also be significant in better approaching the change.
But, at the same time, during the implementation of change, the CEO can face various dilemmas that can affect the process as well as the effectiveness of organisational change management procedures. It is analysed that an effective change requires the collective efforts of manager related to the diagnosis, conceptualisation, planning and implementation. These efforts help the manager to ensure the success of the change. But, there may be possibilities that the manager may unable to create better conditions for the change in order to help people to cope with the change (Martin and Siebert, 2016). It may negatively affect the change efforts of the manager to bring some innovation in the organisation.
On the other hand, during the change implementation, the manager can face resistance to change dilemma from the side of employees. It is analysed that in the hosting of existing business of WGC into a separate company, the employees and stakeholders may resist to the new change. It is because due to use of new technology and loss of job, employees and other stakeholders discouraged to adopt changes (Mattiske, 2012). It created the dilemma for the CEO and managers whether adopt the changes or not. At the same time, it is analysed that the resistance to change dilemma affects the entire change process in terms of delaying or slow down the change beginning, obstructing its implementation, and increasing firm’s cost.
According to Johnston and Marshall (2016), there are various sources of resistance to change at the formulation state of change. In this, the perception of employees is one of the leading and first barriers of change because sometimes, employees and other stakeholders make their negative mind and perception about the change. This could be due to less information about the change, communication barrier, organisational silence, and the inability of the firm to look into the future. This resistance to change negatively impacts on the organisation as well as influence its decision-making process whether to adopt the proposed change or not.
On the other hand, it is also evaluated that the low motivation for change develops the resistance to change from the side of employees and other stakeholders. It is because sometimes, in the organisations, there are differences among the interests of employees and management that decreases the level of motivation among the employees and limit their ability to value the change as compared to the management team (Galliers and Leidner, 2014). In the case of WebGate, the firm faced employee resistance to change due to lack of communication of vision to the employees and other stakeholders. Due to this communication gap, employees enabled to perform their duties as well as developed negative perception of organisation and its activities.
But, in contrast to this, it is analysed that resistance to change is always not bad for the firm. It is because sometimes, resistance to change reflect a higher level of commitment than acceptance from the side of employees and other stakeholders. It helps the management to consider the change practices and improve them in order to provide benefits to the stakeholders and the firms as well (Fullan, 2014). On the other hand, it is also evaluated that another dilemma that faced by WebGate is related to the ineffective organisational structure that created challenges in implementing better change management process. It is because, in the organisation, the WGC employees and manager did not directly connect to the WMS CEO. In this, the centralised decision-making process also reduced the positive perception of employees and other stakeholders related to the implementation of change (Senge, 2014). It created the issues in effectively implementing the change procedures to spin-off the existing hosting business of WGC into a separate company.
At the same time, the firm also faced the challenges in changing the organisational culture that negatively affected the change implementation process. It is analysed that during the change implementation process, there may be the possibility of changing the existing organisational culture that negatively affect the employees and their working efficiency (Cummings and Worley, 2014). It also develops the negative working environment towards the proposed changes within the firm.
In order to overcome the challenges and dilemmas related to the resistance to change, the CEO can develop the communication channels in order to communicate the vision and mission to each employee and stakeholders. In this, the CEO can also communicate the roles and responsibilities to each stakeholder in the separate organisation. It will be effective in developing the knowledge and understanding of stakeholders about the effectiveness of change and its contribution in developing their personal and professional life (Rafferty, Jimmieson and Armenakis, 2013). Along with this, CEO should motivate the stakeholders towards the change so that they can adopt the change for the personal and professional benefits. In this, the management can offer attractive incentives and compensation to the employees. Due to this, the employees and other stakeholders can motivate to provide their contribution in the effective implementation of the change process (Cameron and Green, 2015).
In this, to mitigate the challenges, the management should also properly communicate the change process to all the interested stakeholders. Through communicating the change process, the management can take feedback from all the stakeholders about the change and its process. Due to this, the management can consider the resistance of employees as well as loop-holes in the change process. It can be effective in developing better and effective change management process that can benefit both firm and stakeholders. At the same time, this strategy can also be effective in influencing the behaviour and attitude of employees towards the change practices (Davenport, 2013). Through this, the management can receive an effective contribution of each stakeholder in the change implementation and control.
On the other hand, the management can also create the context for the change. In this, the management can define the change, its effectiveness, contribution, and consequences of failure to change to the stakeholders. The development of context can be effective in developing a better understanding of stakeholders about the use of change and its effectiveness to achieve professional growth (Cummings and Worley, 2014). After implementing the change, the management should also reward the efforts of employees towards the change. In this, the management should identify the individuals, groups and departments for their efforts to successful implement the change. It can be effective in motivating other employees to take an active part in the implementation and monitoring the change process to contribute in the success of the organisation (Kuratko, Hornsby and Covin, 2014).
Along with this, to eliminate the challenges, the management should create the culture and environment of organisational development and change. In this environment, the management can motivate the stakeholders to make continuous efforts to develop a positive working culture and bring new practices and products so that incremental and beneficial change can be provided to the firm (Benn, Dunphy and Griffiths, 2014). At the same time, to facilitate change, the management should appoint a change manager that can work together with the operations manager in order to implement effective change management practices within the firm. In this, the change manager can also support operations manager to maintain the effectiveness of existing organisational structure but, at the same time, he can slowly implement change to ensure the success of business (Cameron and Green, 2015).
In this, the use of leadership function model could be a better choice of action that can be supportive for the change manager to motivate employees and other stakeholders towards the change management. In this model, the change manager can attract the attention of stakeholders towards the functions of the leader and differentiate them with the management functions (Cummings and Worley, 2014). Due to this, the change manager can enable to influence the mind and perception of stakeholders towards the change process, which can be effective in accessing the contribution of employees and other stakeholders in the change process.
From the above discussion, it can be concluded that in WebGate, the nature of changes is related to the structural and strategic change. In this, the change process is established to bring the changes in the leadership as well as products and services as the firm mainly deals in the IBM products and services. In this, to implement these changes, the firm effectively approached to the change by establishing vision statement and through considering people and value diversity. But, at the same time, the firm also faced dilemma or challenges in effectively implementing the change process. In this, the challenges related to the resistance of employees and stakeholder was one of the main challenges that affected the change process. From the discussion, it can also be concluded that the management should use the effective and significant change management model so that the change process can be implemented to achieve success. Along with this, the management team needs to develop core change leadership skills such as team building, innovation, action orientation, communication, coaching and influence people, etc. Through these skills, the management can effectively implement the change process and influence the employees and other stakeholders to adopt the changes within the firm. In this, the team building is one of the important skills that a leader has in order to establish an effective team and to manage this team for the organisational success. The team building skills can also support the leader to manage the changes throughout the organisation by receiving the consideration of teams towards the change and its practices.
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