Role of senior managers in organizational change

In its simplest form, organizational change can be defined as, “new ways of organizing and working” (Dawson, 2003). However this definition is incomplete as it gives no idea about the nature of change. Organizational change is one of the most discussed topics in the industry yet there exist no standard definition of the term. Kezar (2001) provides in this regard that the definition of organizational change differs according to the model used by the one examining the concept. Some generic definitions exist in the literature but individual perceptions matter in the understanding of organizational change.

Triggers of change

In the past, several triggers to change, both internal and external to the organization have been recognized by experts. The main external factors that drive change include:

  1. Government laws and regulations.
  2. Forces of globalization and internationalization.
  3. Political and social events.
  4. Technological advancements.
  5. Phases of business cycles.
  6. And organizational growth and expansion (Dawson, 2003).

Leavitt (1964) on the other hand, identified the internal triggers of change including technology, primary task, people and administrative structures (Leavitt, 1964 cited in Dawson, 2003). Thus, technology can be assumed as a crucial driver of change as it influences the change both internally and externally.

How do senior managers carry the organizational change?

Baker (2007) suggests that managers at all levels play crucial role in change management. Middle level and lower level managers are better confronted to market environment hence their feedback is important for senior management to recognize the need for change. Once the need for change is identified by middle and lower managers, the senior managers do the following to carry out change in organization (Ramanathan, 2008):

  • Confirm the need for change in the organization.
  • Establishing a clear vision for change in the organization.
  • Dividing the vision into short-term achievable goals and communicating the same to people at different hierarchies in the organization.
  • Engaging various stakeholders into the exercise of change by communicating the benefits of change for each of them.
  • Allocating resources (both monetary and human resources) for change implementation.
  • Imparting the necessary knowledge and training to develop the new organizational capabilities.
  • Regular monitoring and controlling of the change process.

Common mistakes by senior managers in change management

An article in the Harvard Business Review put it simply that for carrying change in an organization, there needs to be an organization culture of openness where bottom-up feedback is welcomed; bringing all people together to this common goal (HBR, 2012). But many leaders fail to understand and apply these basics in change management initiatives. While many fail to establish a clear vision for change and communicating the same, those who prefer a command-and-control model and centralize the decision-making at the top also fail in their initiatives because there is no stakeholder involvement in the change. It is also observed that senior managers dislike to empower the middle managers but this is again a serious mistake as empowering the middle management can lead to better engagement of people at lower levels to the change. Chawla and Kelloway (2004) assert that if employee engagement is encouraged during change, it increases their commitment and performance and also reduces the resistance to change (Chawla and Kelloway, 2004 cited in Ramanathan, 2008).

Interference by seniors in Starbucks

Starbucks, the leading global coffee chain, was badly hit by recession when in 2007, the chairman Howard Schultz released a memo “losing its soul” wherein he criticized the CEO Jim Donald as well as the management team for such pathetic state of the company (Serwer, 2008). Schultz rejoined as the CEO of Starbucks in 2007 and under his leadership, he worked rigorously to restore quality by even shutting down all Starbucks stores in the U.S. in 2008 for an evening to retrain employees (Gossage, 2011). Schultz also emphasized upon shifting the focus of the company to customer satisfaction rather than bureaucracy. He made better use of social media to connect with the customers and introduced the website mystarbucksidea.com wherein consumers were provided with an open platform to suggest what can bring them back to Starbucks (Gossage, 2011). The change management initiatives undertaken by Schultz to revive the company also included:

  1. Revamping the supply chain.
  2. Reorganizing the human resources.
  3. Developing an emotional attachment with consumers.
  4. And, engaging everybody in the organization to the change.

Besides, blind testing of new products to secure customers’ response and attracting the customers to use free Wi-Fi in company’s stores were also introduced (Miller, 2011). The result of such initiatives is evident in the success of Starbucks. Starbucks is a good example to showcase the role of senior management in deciding the company’s fortune. The same company was pushed into dark under incompetent leadership of Donald and revived under Schultz.

References

  • Baker, D. (2007). Strategic Change Management in Public Sector Organisations. Oxford: Chandos Publishing (Oxford) Limited.
  • Dawson, P. (2003).Understanding Organizational Change: The Contemporary Experience of People at Work. London: SAGE Publications Ltd.
  • Gossage, B. (April, 2011). “Howard Schultz on How to Lead a Turnaround.” Retrieved from: http://www.inc.com/magazine/20110401/howard-schultz-on-how-to-lead-a-turnaround.html [Accessed on June 1, 2014].
  • Harvard Business Review. (July 12, 2012). “Help you team embrace change.” Retrieved from: http://hbr.org/tip/2012/07/12/help-your-team-embrace-change [Accessed on June 1, 2014].
  • Kezar, A. (2001). Understanding and Facilitating Organizational Change in the 21st Century: Recent Research and Conceptualizations. John Wiley & Sons.
  • Miller, C. (March 12, 2011). “A Changed Starbucks. A Changed C.E.O.” Retrieved from: http://www.nytimes.com/2011/03/13/business/13coffee.html?pagewanted=all&_r=1&
  • Ramanathan, T. (2008). The Role of Organisational Change Management in Offshore Outsourcing of Information Technology Services. Dissertation.com.
  • Serwer, A. (January 18, 2008). “Starbucks fix: Howard Schultz spills the beans on his plans to save the company he founded.” Retrieved from: http://money.cnn.com/2008/01/17/news/newsmakers/starbucks.fortune/.

Ankita Agarwal

Analyst at Project Guru
Ankita is working with the editorial board of Project Guru as a Research Analyst and Writer. With Masters in Commerce and Business Studies, Ankita learned much of what she knows about management through experience. She has previously worked in various financial institutions like Birla Global, HDFC Ltd. and Citi Financial. She is self-motivated and writes for the Knowledge Tank section of Project Guru. She has authored more than 80 articles so far in Human Resources Management, Strategic Management, Finance and Marketing. She likes to pen her thoughts about the latest issues gripping these areas across the world.

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