| Change Management in Modern Organisation Essay

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In its broad sense, literature review should be understood as a discussion and survey of the literature in a specific domain of knowledge. Taking into consideration that the present study is conceived to shed some light on change management in the modern organization both in the framework of the banking sector in Singapore and in a much wider perspective, the ongoing literature review will be correspondent. In the context of the structure, it should be clarified that literature review, as a brief overhaul of what has already been explored, disputed, and established as truth about a particular topic, may be conducted either in chronological or thematic manner.

In view of the fact that the main objective of the present study consists of the investigation of the quality rather than quantity of previous publications, it has been decided to employ the thematic version of literature review. Pertinent past researches are going to be examined in relation to particular themes. Thus, the literature review is likely to elucidate specific arguments, positions, and ideas in the field of change management in general and in relation to the changing banking sector in Singapore in particular.

To facilitate the literature review, it is prudently to revise the core research objectives of the dissertation itself. They are as follows: 1) to investigate banking |ers’ expectation and their perspective of the banks after the financial crisis; 2) to find out if and why |ers are dissatisfied with the services; 3) to understand how the banking sector can manage change to achieve higher satisfaction and stay relevant in the rapidly evolving landscape.

Taking into account the above-captioned research objectives, it is necessary to sum up that the current literature review will feasibly disclose both strategic and operational issues connected with the phenomenon of change management in its broad sense. Also, the literature review will examine the major impacts of the financial crisis on Singapore.

2.2. The theory of change and post-crisis metamorphoses

As it has been already clarified, the main purpose of the literature review lies in the provision of a concise overview of previous publications in a specific domain of knowledge. The present research topic is the changing landscape of the banking sector in Singapore after the financial crisis of 2008. Thus, the clear definition of change management will be a key theme of the study.

As far as the concept of change management is concerned, it is possible to notice that different authors define this concept discrepantly. For instance, Tom Hutchinson (1991) says that the issue of change management must be analyzed in relation to the notion of change. According to the researcher, the idea of change can be approached in two ways. First, it may be considered in terms of the alteration itself (new tools, methods, techniques, etc.). Second, alternatively, it may be regarded as the change in behaviour, including the transition of attitudes and values which underlie the behaviour. In Hutchinson’s opinion, the second view is more sophisticated and assists in explaining the multiplicity of the difficulties and obvious irrationalities, which are taking place in the process of changes (Hutchinson 1991). Hence, it follows that neither new instruments nor techniques are as crucial for the success of the change process as behaviour and values.

The author gives prominence to the human constituent of change. According to the researcher’s opinion, change is not merely a professional concept but is a natural part of the human condition. Hutchinson (1991) points out that people are predisposed to respond to professional change in the same manner as they react to change in other spheres of their lives, such as accidents, marriage, maturing, etc. This means that change is a facet of a person’s life which makes impacts on and is affected by other aspects. Moreover, changes may impose potential threats on the core meanings of human lives (Blacker & Shimmin 1984).

According to the researchers, these core meanings produce stability and security by way of making human behaviour meaningful. These meanings may be exemplified by human relationships with other people, the perception of status, religious and moral values, group allegiances, habits, and routines. Thus, every change poses a menace to one or more of the core meanings.

The aforesaid arguments of Hutchinson (1991) and Blacker and Shimmin (1984) seem to be logical and pertinent. These authors help to understand that management of changes is not a simple administration of professional alterations and corrections. On the contrary, the researchers make evident that change management encounters a large number of psychological issues, which are derivative from the particularities of human nature. The authors make attempts to assert that the human factor is crucial for the successful elaboration and implementation of changes in the framework of any organization.

The human factor may be detected in different kinds of reactions to change. Hutchinson (1991) and other researchers are prone to believe that the success of any organization is dependant upon the ability of its managers to preserve a balance in the complex system of human core meanings. As the matter of fact, any change ‘a priori’ inflicts a threat on the aforesaid balance. As a result, the most ordinary reaction to change is the resistance. Also, reactions to change may be divided into individual and collective.

Marris (1974) states that individual reactions to change may be associated with responses to some bereavement. According to the scholar, the shock of bereavement throws the core meanings of human life out of balance. In the context of change management and its applicability to any organization, bereavement is a very good example, because it is associated with the personal endeavours to restore the balance by settling the contradictions and conflicts, which have been created by the disturbance of change. This means that even a change in the banking sector may cause a disturbance and create the need for a person to restore the balance.

As far as the problem of collective reactions to change is concerned, it should be presupposed that they are not as contradictory and personal as individual reactions. Many researchers concede that every person is a member of different groups – ‘national, regional, gender, ethnic, language, family, and age groups, as well as work groups, leisure and leisure groups, etc.’ (Hutchison 1991). The participation in groups provides a large number of advantages. Thus, Blacker and Shimmin (1984) specify the following ‘psychological rewards’ of group membership: a) groups provide esteem and identity; b) groups help to verify reality; c) groups provide satisfaction of people’s need to be wanted and to belong; d) groups supply individuals with more power and achievements. As the matter of fact, groups are responsible for the development of social norms.

It is necessary to emphasize that the phenomenon of change is very complex. Thus, change management is conceived to deal with all complexities and particularities of the aforesaid phenomenon. This type of managing modern organizations seeks the answer not only to the question about changes that need to be implemented in the framework of organization, but also to the question of what outcomes of changes should be expected.

In this sense, Ackerman (1997) differentiates between three types of change: developmental, transitional, and transformational. This means that managers, who implement changes in the organization, may either develop the business entity, or provide its transition from one level to another, or transform certain processes.

Another bunch of scholars distinguishes between episodic and continuous change. Thus, according to Weick and Quinn (1999), episodic change is ‘discontinuous, intentional, and infrequent’. This kind of change is associated with the second order alterations, which manifest themselves as the substitution of one managerial strategy with another. Whereas continuous change is regarded by the authors as ‘evolving, cumulative, and ongoing’ (Weick & Quinn 1999).

After the nature of changes has been clarified, it is essentially to shed some light on change management in the modern organization. For this purpose, it is suggested to analyze the research of some prominent scholars, such as Christian T. K. – H. Stadtlander. According to Stadtlander (2006), a modern organization encounters a variety of challenges which force it to implement changes. Also, MacKechnie (1978) offers a review of the different themes of change in an organization. According to the author’s opinion, the theoretical structure and methodology of organizational change originate primarily from the social psychology (1978).

Hence, it follows that MacKechnie (1978) and Stadlander (2006) resemble Hutchinson (1991) and other scholars by considering the socio-psychological constituent of change to be crucial in change management.

Moreover, Stadtlander (2006) takes efforts to elucidate the significance of change for every business entity. To the researcher, inherently, change is a natural process being essential for the development of both people and organizations (p 18). The fact is that the lack of change, which is caused by the desire to maintain the status quo, should be deemed unnatural and restraining with regard to the evolution of organizations and society. In other words, the continuous process of alterations, transitions, transformations, and metamorphoses is essential for the health of companies ‘in both the domestic and the international business environment’ (Stadtlander 2006, p 19).

In the context of change management, Stadtlander (2006) accentuates on the international business environment, where the pressures and forces are stronger than in a domestic business environment. Not opposed to Stadtlander (2006), Jick (1993) is disposed to think that international business environment gives birth to a wider range of challenges and requires competitive companies to create more sophisticated relations with each other. Similarly, Kanter (1999) purports that the impact of local and global ideas brings into existence new concepts in which domestic firms are required to react to international competitors, while foreign business entities take efforts to adjust to local practices.

The continuity of changes in all spheres of business is asserted by a wide range of scholars. Thus, Heifetz and Laurie (1997), in conjunction with Jick (1993), claim that, in contemporary organizations, changes usually concern technology, markets, |ers, competition, management, societies, and diversity of the workforce. Additionally, Wheelen and Hunger (2002) state that changes in the corporate culture of modern organizations are substantial as well. According to the authors, modern business entities frequently experience transformations in the number of beliefs, values, and expectations, which are shared among the members of a business entity and conveyed from one generation of the staff to another.

In like manner, Collins and Porra (1996) assay that many renowned organizations, such as Sony, Motorola, and Hewlett-Packard, have reached success because of the fact that their leaders have understood how to maintain a principal purpose and core values throughout the process of change while simultaneously adjusting strategies and practices of their companies to changing environmental conditions. In this sense, the crucial factor for prosperity of change programs is believed by the authors to be the balance between continuity and change, which is tightly connected with the skill to create a vision (Collins & Porras 1996).

Slater (1995) purports that change must be a prolonged process rather than a short-term program. To the researcher’s point of view, organizational change must be a continuum which flows from genesis (unstable present) to paralysis (stable future). Also, Slater (1995) speaks of a balance point, named synthesis, in which the company’s leaders make attempts to fuse stability with change.

Besides, Bouchikhi and Kimberly (2003) are disposed to think that the maintenance of the company core is a significant measure because any change process, which contradicts to this core identity, is doomed to failure. Not opposed to the above-mentioned scholars, Terry (2001) claims that company values are very central and violation of them would inevitably destroy the organization itself.

Apart from the issue of organizational culture and change management, many researchers have discrepant views in respect of the appropriateness of the degree of change. According to Tichy (1983), business leaders frequently accentuate on unimportant components of general changes. The shortcoming of such focus lies in its limited fixation, exclusively, in tactical problems, whereas strategic issues still remain unsettled.

To proceed further, Henderson (1979) finds out that small changes are often inadequate and insufficient for making strategic decisions, which may have irreversible consequences for the business entity. Kotter (1995) provides the data from the investigation of more than 100 companies, such as the Ford Motor Company, General Motors, and British Airways, with regard to change initiatives. According to the researcher, many leaders of the prominent organizations suffer lack of experience and knowledge for the correct introduction and implementation of organizational change.

The above-mentioned revelations of Tichy (1983), Henderson (1979), and Kotter (1995) speak about the significance of special managerial knowledge and expertise, which may guarantee that proper changes are made, and proper results are achieved. The discipline of change management is called to provide managers with sufficient knowledge and experience to make proper decisions in respect of organizational change. The analysis of previous publications clearly demonstrates that resistance to change is one of the substantial problems which are regarded by change management. It should be reiterated that change may disturb the balance of core personal meanings and, therefore, may cause troubles and uneasiness. The researchers are prone to believe that change may give people a feeling of uncertainty and contingency: not knowing where to go, what the future will look like, and what to expect (Abrahamson 2000; Kegan & Laskow 2001). In this connection, Bolman and Deal (2003) determine the handicaps to change in four discrepant categories. First, in the framework of human resources, barriers to change are connected with uncertainty, anxiety, feelings of incompetence, and neediness. Second, in the framework of structures, handicaps to change involve the distortion of clarity and loss of stability, chaos, and confusion. Third, in the political framework, the impediment caused by change may be associated with disempowerment, and the confrontation between losers and winners. Fourth, in the symbolic framework, the hindrance to change may be juxtaposed with the loss of sense and purpose and clinging to the past (Bolman & Deal 2003). According to Bolman and Deal (2003), all this resistance to change may be overwhelmed or averted by way of restructuring, recruiting, and retraining.

Expatiating on the problem of organizational change and its management, it might be appropriate to note that any global turmoil, such as the global financial crisis of 2008, is a good reason for organizational change. Thus, a large number of organizations recognize the necessity to implement organizational changes due to the global transformations, which have been incited by the financial crisis of 2008. Notwithstanding the awareness of the need for change, only a negligible number of business leaders precisely know how to success with their post-crisis programs of change.

The financial crisis of 2008 is often regarded by scholars as a serious impetus for organizational change. The tumult in the international financial markets has aggravated substantially since August 2008. Thus, the crisis has caused the collapse of prominent financial institutions and is currently influencing the real economy in the advanced economies.

As far as the financial crisis of 2008 is concerned, it should be clarified that a wide range of researchers are prone to believe that the aforesaid global financial crisis is still present in economies of many states. Aside from the collapse of large financial institutions, the crisis of 2008 has resulted in the bailout of banks by domestic governments and downturns in stock markets around the globe. This means that banks and other financial institutions are those organizations which have been affected by the crisis most. Hence, it follows that banks and financial organizations require adjusting changes to the new post-crisis economical environment.

After everything has been given a due consideration, it should be generalized that:
First, change management is based on the theory of change. That is, only a clear understanding of what change is may guarantee that the manager will elaborate a successful strategy of organizational change.
Second, the reviewed publications contain different definitions of change. However, most of the authors are inclined to differentiate between two types of organizational change: 1) change in terms of alteration itself (new techniques, methods, new tools); 2) change as metamorphoses in behaviour and transition of attitudes and values.
Third, management of change should not be reduced to a simple administration of professional transformations and corrections. Past researches make evident that change management deals with a wide range of psychological issues derivative from the particularities of the human nature. In other words, the personal (emotional or psychological) constituent of change must be seriously approached by change management.
Fourth, the study of previous publications evinces that any change may encounter resistance. Therefore, the treatment of resistance should be recognized as a core objective of change management. Additionally, resistance to change is an obstacle on the road towards the implementation of the strategy of change.
Fifth, the financial crisis of 2008 is a global impetus for change. This means that organizations affected by the crisis need to elaborate and implement an accurate strategy of change in order to adjust to new circumstances dictated by the crisis.

2.3. Personal and psychological impacts of change on employees and the role of change management in dealing with them

The previous section contains the review of different publications concerning the theory of change. It has already been ascertained that the clear understanding of the nature of organizational change is a principal objective of change management. Thus, the theory of change supplies the discipline of management with the necessary knowledge. As far as the previous discussion of change and change management is concerned, a mental note should be made that change provides serious psychological effects on employees. That is, change is often regarded by the staff of an organization as something personal and not just a professional issue.

According to Alajloni, Almashaqba and Al-Qeed (2010), psychological influences of change are frequently predetermined by the nature of organizational relations between people. The scholars assay that any organization participating in business competition inevitably is interweaved with such factors as leadership, motivation, and informal relations. The aforementioned factors constitute the basis of the classical theory of organizations. According to the early classical theorists, the relationship between the staff and management are determined by means of a formally structured process of communication, defined objectives, accountability, ‘and formalized procedures and practices to avoid any conflict in their relationship’ (Alajloni, Almashaqba & Al-Qeed 2010, p 60).

Also, the representatives of the classical theory of organization are prone to believe that employees have always been treated as a work force motivated exclusively by means of money. The third presumption of the classical theorists lies in the opinion that the employees have been deemed as a product of means of production.

Many contemporary researchers vehemently refute the tenets of the classical theory of Fayol, Weber, Follett, and others because of their simplification of the process of production and disregard of the psychological component in the process of manufacturing and management. Thus, Alajloni, Almashaqba and Al-Qeed (2010) critically evaluate the facets of the classical theory and purport that the personal (psychological) factor plays an important role in the functioning of any organization. This means that any professional relationship in the framework of an organization not only involves formal interactions, but also emphasizes psychological, personal, and emotional issues. In this connection, any organizational change as a type of professional relations in the framework of an organization may be associated with personal, psychological, and emotional behaviours, attitudes, and values of employees.

The importance of the psychological factor of change and resistance to change for an organization may be explained by peculiarities of the change process. According to the Department of Human Resources of Manchester Metropolitan University (n.d.), change is always composed of three overlapping facets: ‘people, processes, and culture […]’ (p 3). The juxtaposition of all three elements requires from a manager to find the balance between these three components in order to properly embed a change.

The scholars of Manchester Metropolitan University assert that it is incumbent on the managers to be able to introduce and manage the change to guarantee that the general objectives are fulfilled. For this purpose, managers are required to make a diligent consideration of the nature of their team, department, or other area, which is affected by a change. Thus, the authors claim that it is crucial for change managers to perceive the readiness of the personnel to engage with a change (Manchester Metropolitan University n.d., p 4). The researchers assay that managers must always introduce a change in a manner, which is congruent with their environment in order to avert possible conflict and attain desirable results.

Managers are recommended to pay attention to the factor of human psychology, because the ability to work with people seems to be the hardest part for managers. The research of Manchester Metropolitan University makes evident that employees always require support in view of the incoming changes. As the matter of fact, people facing change need to be properly empowered. That is, change management seeks to teach professional managers when to rely on pressure and when not to.

Not opposed to Manchester Metropolitan University (n.d.), the Higher Education Funding Council for England (hereinafter referred to as HEFCE) recommends that, when managers and leaders are engaged in elaborating the management of change, the following core fundamentals should be emphasized: a) reaction to change of different people is different; b) every human being possess principal needs, which have to be met; c) change is always connected with a loss, and people must be prepared to move through the ‘loss curve’; d) realistic management of expectations must be implemented; e) fears should not be neglected, but must be dealt with; f) there are no easy solutions; g) intended change must be preceded by adapted processes; h) correlation between teamwork and leadership must be augmented at the stage of change; i) every change must include work with the culture.

All these recommendations on how to deal with the personal, psychological and emotional constituents of change are predetermined by the fact that people are prone to resistance in case of any pressure. Certainly, change is a kind of psychological pressure, because it imposes on people new stereotypes of behaviour, attitudes, and values. Therefore, to introduce change properly, managers must be experts in averting or eliminating employees’ resistance to change.

The representatives of Manchester Metropolitan University continue further that personal responses of people to change are different. Their reactions to organizational amendments and alterations are manifested as transitioning (Bridges 1991). Nevertheless, William Bridges (1991) differentiates between the concepts of change and transitioning. According to the researcher, change is always an external situational factor which makes influences on employees and organization in general, whereas transitioning is the psychological process employees move through to adjust to the new situation. Hence, it follows that change should always be recognized as an external stimulus, whereas transitioning is a set of steps necessary for the psychological adaptation of people to a new organizational environment.

Bridges (1991) outlines three stages of transitioning: a) the ending; b) the neutral zone; c) the beginning. As far as the first stage is concerned, it should be clarified that any change may be commenced only if some old things are approaching their end. From the psychological point of view, transition starts from the recognition that something has been lost or over. Bridges (1991) emphasizes that, unless people arrive at a real ending, they will never be able to initiate a successful beginning.

The second stage of the neutral zone occurs when the old ideas, behaviours, or attitudes have been voluntarily cast out, but the new strategy is not proposed yet (Bridges 1991). This stage may associate with the situation when things are not clearly determined. Finally, the stage of the beginning is the threshold to a new organizational existence. According to Bridges (1991), the stage of the beginning should be regarded as a comfortable atmosphere, in which new right ways are followed completely.

Analysis of Bridges’ understanding of transition makes evident that the reality of change has genuinely psychological impacts on the participants of change. In other words, people conduct transition through a change at different speeds and experience discrepant effects of the process of change.

The problem of transition and management of change is also approached in the study of Michael W. Durant. Among other things, the researcher gives prominence to three stages of change and emotional phases of change. Similar to Bridges (1991), Durant (n.d.) claims that the first stage of change lies in the unlearning of past behaviour. However, in contrast to Bridges (1991), Durant (n.d.) considers that the second stage of a change process lies in the incorporation of new behaviours into organizational processes. This stage is justified by the necessity to adopt new practices and rules which augment the intended ways of operating. Finally, the third stage is refreezing. According to Durant (n.d.), the aforesaid ending of a change process comprises the policies of reinforcement and measurement of a behaviour change.

Durant (n.d.) investigates emotional phases of change. Interestingly, the author connects the emotional constituent of change with the phenomenon of loss. Certainly, every change inflicts specific losses on people. Organizational change inherits the element of loss in its process, and this loss seems to be personally and deeply felt by employees. In his delineation of emotional phases of change, Durant (n.d.) relies on the Kubler-Ross Grief Model. This model takes into account four emotional states, which are experienced by employees in practice. Moreover, the four emotional states are frequently encountered during an organizational change.

Kubler-Ross Grief Model represents the following set of stages: 1) denial; 2) resistance; 3) exploration; 4) commitment (Durnat n.d.). Thus, the first emotional state experienced by employees within the process of change is denial. According to Michael W. Durant (n.d.), denial manifests itself as disbelief or unresolved fears about the change initiative. At this stage, the author recommends replacing mistrust and fear by acceptance. That is, to be an effective provider of a change, a manager is required to encourage acceptance to change by triggering activities directed towards building of trust.

Durant (n.d.) makes attempts to juxtapose the denial with the lack of trust. This means that employees may have no faith in a change only if they do not trust in the positive consequences. Thus, the feeling of trust, which is nurtured on the ruins of previously unresolved fears, may help to substitute the denial for acceptance.

Resistance to the change process should be understood as the second emotional state. In its broad sense, employees are prone to resist the change initiative. At this stage, the staff may take efforts either to slow down or sabotage the change initiative. In view of this, Durant (n.d.) urges that the managers must detect resistance when it takes place and elaborate adequate programmes for overwhelming it. In his definition of resistance, Durant (n.d.) emphasizes that this phenomenon of a natural response to a change may be expressed in several forms.

According to Durant (n.d.), the easiest form of resistance lies in recognition of those who manifestly signify their dissatisfaction with the amendments occurring in the organization. This means that managers must recognize those people who express their dissatisfaction with the changes first. These employees often arrive at resistance through denial. They subconsciously refuse to affirm the existence of the problem which is addressed by a change. The diligent analysis of Durant’s arguments makes evident that the resistance of employees is a more motivated emotional reaction than the denial.

As the foregoing discussion must suggest, the phenomenon of denial takes place when the unsettled fears and distrust dominate the minds of people. It is possible to infer that denial is predetermined by the lack of necessary information and confidence which could justify the acceptance of a change. On the contrary, resistance is a more motivated feeling. Resistance is a natural reaction to change. Therefore, the person who resists must be aware of the change initiative before he can respond.