Change In The Organization Weatherford International Ltd Management Essay
This study is focused on the topic management of change in organization. The basic learning outcome of this assignment is related to understand the change management process in organization. For this assignment the company chosen is Weatherford International Ltd. First of all the background of change that exists in today’s economies and organisations is discussed. Then the key strengths and weaknesses of autocratic organisation are given in bullet points. After that the last part of first task, organisational development and its alternative forms are discussed in detail. Then the key stakeholders are identified from the Weatherford International and some of the tools and techniques to involve them in the change management process are suggested. Under the change management model topic, comparison of three major change management models is given, and then Kotter’s change management was suggested and discussed in detail for the implementation of on-going change in Weatherford International. The last section of this assignment is for the conclusion and some of the recommendations for chosen company.
Background of change
From the last decade, the world is changing dramatically than ever before. A chain of interrelated national trades in which businesses compete with each other on a really global basis. Maximum organizations are experiencing considerable changes in the manner they are managed & do trading. These changes are influenced by many factors such as the degree of globalisation, changing technology, political, social & economic changes at numerous different stages. These changes are happening speedily, unwillingly & companies would never be the similar in structure or practice as a consequence. The continuous advancement in technology such as internet, communications technologies has made the world as a global village. Because of the several communication and collaboration tools, concept of virtual organization has emerged and physical presence is getting less important. The other influencing factor is the changing role of international bodies like world trade organization and international monetary fund (IMF). The IMF has forced many countries to go through economic reforms.
Because of the increasing globalization, many multinational companies are choosing the strategic business options of mergers and acquisitions, strategic alliances which have changed the way of doing businesses. The chosen organization for this study Weatherford International has also been gone through many mergers and acquisitions activities over last two decades. Few other change factors are like change in the consumers’ lifestyles and taste, competitive pressure to cut costs through economies of scale, use of outsourcing strategies for operational activities to low cost countries etc.
Max Weber first used the word bureaucracy. According to him, bureaucratic organisation is an official business with standardized set of rules and procedures which everyone within the organisation should follow. Though Weber had advocated this form of organisation structure, there are some disadvantages as well. Some of the strengths and weaknesses of bureaucratic organisation are discussed below.
Bureaucratic organisation has got more control and monitoring through centralization system of decision making.
Decision making is easy process by top management
As processes are standardized, everyone has to follow the procedures and rules.
Defined hierarchy of organization structure and clear rules and norms
Due to its rigid structure, lot of chance of inefficiencies.
Lack of innovation and flexibility
Lesser employee participation and involvement
Poor channel of communication and it is time consuming
Delaying change or adaption
Organization Development (OD) theoretically defined as the planned efforts to bring change in organization to control and manage processes and people more effectively. It is also defined by another theorist as the fundamental change to fix the problems or improving the process or procedure. This OD program is specific for organization such as one change which is more relevant for one company and it is totally irrelevant for the other. Thus, this OD program is specifically applicable for particular organization. These are few objectivise of OD programs which shows that these program vary according to specific situation, but the objective of OD program remain same consistent.
The alternative forms of organisational development are discussed below
The first form of organisational development is through continuous quality improvements. The quality development can be achieved through various quality management systems like Total Quality Management, Six Sigma, Kizen, Quality Circles. This form focuses on four areas including customer, employee involvement, result based decision making, and integrated quality improvements. Now a day many of the organisations are adopting this form of organisational development.
The increasing use of Internet, electronic mail & Web conferencing tools have formed the capability of working together through time & space within & among the organizations. The technological development has renovated the organizational atmosphere and also the arena of Organization Development.
At present there are 3 generally known technology application in organisational development:
1. Measurable, database valuation tools, like surveys & feedback from members of staff.
2. Communications, collaborations and teamwork, which also include information sharing, document management.
3. Development of employees & management through online training.
OD specialists using technology more and more in their everyday work.
This form of organizational development include variations in how the whole work of an organisation is distributed into different parts, reporting structure, means of control, the structure and arrangement of tools & individuals, work flow measures etc. The structural development also includes removing or adding layer of hierarchy in the organization, restructuring through downsizing or redundancy, centralization or decentralization. This form redesigns the structures of organization and creates new relationships which results into improved performances. In order to cope with the changes in external environments, organization has to respond with making appropriate structural changes.
The various organisational development interventions are as follows-
Survey feedback: Through this activity, managers can get the important information and data about the various aspects related to employees. The data and information received through this form on employee’s attitude, their salary/wages level, working hours and conditions and also the relations with the employees is provided to the upper management. The top executives analyse the data and catch out the problems, assess the outcomes & develop the alternatives to solve the problem.
Process Consultation: Under this organizational development activity the process consultant meets various work teams and department members, interacts with them and detects the problem solving ways. The process consultant then provides the team with the data, information gathered via interactions, coaching, individual counselling and observations for shaping the behaviour of team members.
Setting Goals & Planning: Goals and plans are set by every department within an organization for productivity & profitability. They send these goals and plans to the upper level. The top management then send them back to each division for further modification and after some amendments the goals for the whole organization are thus set.
Managerial grid: The managerial grid classifies a variety of management conduct depending upon the various means that how operations oriented & workforce oriented statuses interrelate with each other. These OD intervention emphases on the observations of behaviour in trainings explicitly associated with work. The training participants are motivated & assisted to evaluate their own decision-making style.
Team building- This organization development intervention consists of an application of several methods of Sensitivity training given on the job to the real working teams in different divisions within the organisation. This training is formulated to develop the skill of workers to work together as team.
The organisational development activities discussed above helps in making the change happen smoothly through one of the three organisational development forms (Quality, Technological and structural).
My Chosen Company- Weatherford International Ltd
Weatherford International Ltd is the public listed company having products and services related to natural gas wells and crude oil processing. It is a multinational company having presence in above 100 countries and more than 43000 workers throughout the Globe. From last twenty years the company has been acquiring many companies. It also had couple of mergers such as Enterra in 1995 and Energy Ventures in 1998.
External Drivers of change in Weatherford International
Merger and acquisition of so many organizations in past few years forces the company to pursue a change in operations. To follow the financial regulations of SOX, this automation process will provide sufficient security to its information system. To have better customer management and supplier management system the change is needed.
Internal drivers of change in Weatherford International
Staff utilization is leading Weatherford to change its internal policies. The company was lacking a system for control and status updates. They required an automated solution & implementation of an agreement procedure development initiative to back up business process re-engineering & develop the working atmosphere. (The Corptax, 2008).
The word stakeholder means anyone that has interest in the outcome of a programme/project. A legal, moral or economic stake/interest in an activity. Some stakeholders have more interest than others, but that is also changing.
Major stakeholders in Weatherford International
Top management- This includes the board of directors
Employees: One of the key stakeholders of Weatherford International is employees. This includes the senior managers at corporate offices and the operating staff.
Customers: The customers are the key stakeholder group in Weatherford who will affect with the change process.
Suppliers: Suppliers are also one of the key stakeholders as they play major role in effective utilisation of resources.
Governments- Local authorities and national, international governments
Investors- Small and large shareholders
Among these classified stakeholders the most powerful and influential stakeholder is employees. Among employees there are categories in which, Senior Management at corporate office are most powerful but less impacted by the change. On the other hand the employees of regional division are less powerful and highly impacted by the change.
To build the good productive working relationships with the stakeholders, the company first needs to understand the degree of interests and powers of each stakeholder. This can be done by using a stakeholder’s mapping tool. Secondly to establish a simple and effective communication system by keeping the message and information as simple and short as possible to avoid overload. Show trust and faith in all stakeholder groups. Listen to all the stakeholders carefully.
Consulting with the stakeholders is another method by which management can gather information from others by discussing with others about what action to take in particular circumstances. It means finding out their views and opinions before deciding what to do.
Effective management of stakeholder relations during a change process calls for early, clear, and consistent communications. All the stakeholders must be properly informed of potential impacts and benefits of the developments and get their engagement in various projects. To the degree possible, try to provide information on the purpose, timing, and nature of the changes proposed; the anticipated environmental and socioeconomic consequences of relevance to specific stakeholder groups; and the ways in which different stakeholder groups can participate in planning, implementation, and monitoring.
The actual decision-making process needs to be made more participatory to ensure that all decisions regarding the development are widely supported and understood.
Consultation can help the management to identify the priorities which stakeholders have. This can benefit management as it can highlight the factors which are likely to be most important to the stakeholders and to which management should pay most attention.
Change management models
There are many change models researched and documented by different scholars. For this assignment three change models are discussed including Kanter’s model, Kotter’s 8 step transformation model and Luccke’s change model. The following comparison of all three models is taken form the Todnem research study.
Source: Todnem research study
Kanter defines the first step as the analysis of organization and needs for change, Kotters defined as the developing the urgency for change and lastly Luccke defined the identification of business problems. While, these steps are common in among all these three theoretical models shown in above diagram such as creating vision for change, leadership and create policy. Also, According to the research of Todnem organizational change management process is basically divided into following major phase of plan, action, implementation and measure change performance.
John Kotter’s 8 step change model
According to Kotter’s model, the following steps describe the change implementation procedure.
Kotter’s 8 step Change model, Source: www.Leadershiphub.com
Business Process re-engineering-
This change model was first invented by the duo Michael Hammer and James Champy in 1990. According to them business process re-engineering is not for the smaller changes, rather it is for the radical change. It helps to dramatically improve the different business processes within the organisation such as customer service, reduce operational costs. The role of information technology is vital in implementation of BPR change model.
The other change models include-
ADKAR model for change- This model depends upon awareness, desire, knowledge, ability and reinforcement.
Kubler Ross change model
On-going changes in Weatherford International
Changes in the business process operations
Automation and integration of different processes and workflows
Changes in organisation’s structure due to on-going merger and acquisition activities
Implementation of Change Model for on-going change in Weatherford International Ltd
Weatherford International Ltd can use either business process re-engineering change model or the Kotter’s 8 step model to implement on-going changes in the organisation. My suggestion is to implement the Kotter’s change model which is discussed in detail as below.
Step #1: Create the sense of Urgency
The step of Kotter’s model suggests creating sense of urgency among the stakeholder’s. Unless there is a genuine concern, and the purpose well perceived, the implementation process may not have great implications and the outcome would not match the desired expectations. Primarily, the stakeholders who have greater influence on the business operations, for example, some key employee of Weatherford International Ltd , and in general the rest of them should be motivated, encouraged to participate.
Step # 2: Form a Powerful Coalition by identifying key power points.
Every organisation has a common culture and values which is shared by almost all the stakeholders including the outsiders such as suppliers and even customers in certain extent. Within this board organisational cultural frame work, there exists sub culture of group of same standing or position. For example: a team of 15 members with its line managers. The line manager can identify a key employee within the team who are influential and have a certain commanding. The line manager can include these members of team and form a strong coalition to influence the others team members. Naturally such a formation would compel others in the team to oblige.
Step # 3: Creation of Vision for the Change implementation
As much it’s a fact that plans well drawn help in proper and systematic execution of a project, so is the psychological factor involved in the execution. Every person requires a sense of purpose and share a vision for self- motivation. Change management would not be effective unless a clear vision is shared among the participants. The vision should be associated with better results, improvement in the present system and the benefits that can occur to the participants, and in general. The leaders should consistently engage in sharing the vision, reinstating it through various means. Training can be provided regularly, update ad sharing of vital information on new developments , all these have to be undertaken quite effectively to see desired results.
Step # 4: Communicating the Vision through effective channels to the stakeholders
Once the vision is identified, it should be clear communicated to the stakeholders of Weatherford International Ltd. The vision should be easily comprehendible even by ordinary person of understanding. It should be able to be broken down or give the clear direction for future action plan, the expectations of the outcome. Training can be provided regularly, update ad sharing of vital information on new developments , all these have to be undertaken quite effectively to see desired results. Ineffective communication channel or vague message would back fire the entire effort, and lead to huge wastage of resources.
Step # 5: Remove Obstacles
Obstacles are evident to emerge very often, no matter how well the change implementation process in designed to its core. Obstacles should always serve an opportunity to learn more about the challenges of the change process. It would that the organisation remain focused on the design, make appropriate changes to the action plans without losing the focus on the pre – determined goals. A proper framework for addressing problems should be setup, each one participating in the system should clearly understand the hierarchy of authority , roles and responsibilities , so that , in the event of unexpected occurrence they should easily be able to resolve or approach the designated forum. Obstacles can be due to changes in the internal factors or external factors influencing the Weatherford International Ltd’s business operations and organisation.
Step # 6: Create Short-term Wins
In the change process management, there are objectives which are short term and long term. Weatherford International Ltd should indentify short term tasks, which can be achieved in a shorter duration. When undertaking a radical change process, it always advisable to create short term wins. The wins situation should be communicated with all the stakeholder’s the small victories would reinstate the faith of the stakeholders in the change system and motivate them in participating actively. This said the system should have a proper framework for to compensate and reward the participants who have actively got involved and have achieved the desired results to promote the change management in the direction. The change management along with proper implementation procedure would also require that employees are recognized within the organisation and accordingly rewarded. As a result, a good performance and sincere indulgence would be associated with personal benefits.
Step # 6: Building on the Change
Change is not a onetime process, but a continuous effort starting from the day the organisation mandates it until the environment surrounding the organisation is in a state of rest, which is impossible given the dynamics of the factors that influence Weatherford International Ltd’s business operations. Change process is a continuous effort, evaluate the short terms wins and leverage on it for the next level. Success got at the initial stage should not be considered as the final victory.
Step # 6: Anchor the Changes in Corporate Culture
In a long term, change management should be imbibed into the main stream organisational culture.
In a long and continuous effort of change management, the process should eventually be observed into the main stream culture of the organisation. For changes to be a part and parcel of the organisational culture, the leaders should regularly alert and create awareness about the existence of the change management that is deeply rooted in every organisational activity. The perception of change management should become an inseparable part of the organisational culture in a long run; this in turn would create a platform and facilitate any major undertaking in the future.
Expected Improvement after successful implementation of change
If the Kotter’s change model is implemented successfully in the Weatherford International Ltd for the on-going change, there would be some long term benefits. The very first improvement would be in the overall business operations of Weatherford including operational efficiencies, service quality, supply chain management, reduction in wastages and cost of production and thus increase in profits. The other major improvement would be in changing company’s strategic vision. The company would have clear long term vision and direction. This would boost the confidence of all stakeholders. The last but most important improvement after the change programme would be the cultural change within the organisation. Basic values and ethics in business operations shaped alongside throughout the change process would be absorbed into the organisational culture. It would serve as motivation and sense of purpose for the employees and other stakeholders to achieve and contribute to the organisational goals.
Because of the mergers, acquisitions, globalisation, revolutions in information technologies, the world is changing so rapidly. Hence in order to stay competitive, every organisation has to adapt some sort of on-going change programme. It can be concluded from this study that, because of the vibrant nature of today’s businesses and world economies, it is imperative for every organisation to implement one of the change models discussed for on-going changes. If the Weatherford International, successfully implements the change programme through Kotter’s change model, company would receive far more long term benefits and competitive advantages over its competitors. There are some barriers to change such as resistance to change by the stakeholders, not having clear vision for change. So in order to make it happen, company needs to engage its stakeholders through stakeholder mapping process. Stakeholder engagement is a challenge and a complex and time consuming process. Working with and learning from other partners and stakeholders can only serve to maximise impact, reduce fatigue and reduce cost. The company would also use the various organisational development forms to make the change process even easier.
Leadership style shows the way the organisation will be managed. The multinational corporation like Weatherford International Ltd, the company leadership should develop a strong vision and positive attitude and culture within the organisation.
Empowerment and Delegation- This involves the giving of power to your team members. At Weatherford International teams needed to be empowered by letting them use their own initiatives at tackling tasks that have been awarded to them. This form an effective global structure as it causes all team members to feel very well a part of the decision making process.
As the company operations are spread over 100 countries, they should develop a strong communication system across whole organisation. Electronic communication and collaboration technology can affect both task and social dynamics positively and negatively. The company need to opt for the latest gadget on the market to enable its team and network perform to standard or above.Order Now