The Management Model of Imaginary Change: Why This is The Basic Structure for Putting in Place Key Chances at Mammoth Equipment & Exhaust

Introduction

This paper presents a conceptual change management model that could be used as a basic framework for implementing planned fundamental change at Mammoth Equipment & Exhausts (MEE), or a similar organisation operating globally. Key organisational change and development (OCD) theories/models, business principles, global leadership principles, and cross-cultural issues were taken into consideration and a wide range of relevant, peer-reviewed literature was consultedwhen developing the model.

Background

Globalisation of markets, advances in information technology, deregulation, and intensifying competition has seen many organisations set-up operations in multiple countries. This trend demands that organisations develop capabilities of coordinating business activities across cultural boundaries, which has seenchange management increasingly become important(Cao and McHugh 2005). However, given the high failure rate of change initiatives, the efficacy of current change management theories/models and processesin solving challenges facing the 21st century organisation has been questioned.

Mammoth Equipment and Exhausts

Mammoth Equipment & Exhausts (MEE) is a rapidly growing, family owned and managedAustralian company that operations in more than 12 countries in Europe, North and South America, and Asia-Pacific region.The company specialises in developing and manufacturing heavy duty diesel exhaust systems. MEE’s current vision is “To become the leading manufacturer in the South Pacific region of complete exhaust and emission systems for the highway and off-road markets for diesel engines.”(Mammoth Equipment and Exhausts 2015). However, the company has since established operations beyond Asia-Pacific.Valuesin-use at MEEinclude respect, tolerance to diversity, freedom of expression, honesty, high performance, collaboration,innovation, and quality customer service. The company has a very flat and informal, process-oriented structure comprising of “fluid”, self-managed teams. This structure facilitatesflexibility, frequent interaction among organisation members, collaboration,and agility. As the business continues to grow and diversify its products and markets, leadership has seen it necessary to re-define and implement a new business strategy.

Strategic Change Interventions

Strategic change interventions are aimed at changing the relationship between the organisation and its “higher-order” environment. They involve senior leadership making decisions about what products and services to offer, which markets to compete in, and how resources will be allocated. Such interventions influence organisation-level outcomes.

Systems Approach to Change Management

The model proposes a systematic, people-focused, and value-driven approach whereby change isviewed as an evolutionary process, rather than as a time-constrained program . As illustrated on the model, and consistent with both Systems theory and Complexity theories(Burnes 2004), an organisation is considered to be a complex “open” system comprising of various inter-dependent sub-systems (i.e., units, functions, departments)which continuously interact with the environment. The organisation has a purpose in the “higher-order” system (global environment), from which inputs such as raw materials and information flow. In turn, the organisation releases outputs (products and services) into the higher-level system. A feedback loop exists, which influences future input decisions. Thus, the organisation is a dynamic, non-linear entity that is continuously self-organising, adapting and evolving.

Therefore, it is important for the change leader/OD practitioner to develop a complete understanding of how the system operates, and the nature of both internal and external relationships. This can be achieved by adopting a broader consultative approach. Also, the model has to be taught to organisation members so as to improve their understanding of the environment within which the organisation operates, interdependencies, and the driving force behindchange.

Vision, Mission and Core Values

These form the strategic platform upon which change can be developed and implemented. Successful change depends upon organisation members developing a clear understanding of why the proposed change is necessary (context), whatneeds to change (content), and how the change will occur (process). Such understanding promotes value alignment and commitment to change implementation(Walker, Armenakis, and Bernerth 2007; Hamilton and McDonald 1999; Domm 2001). It is critical for organisation members to perceive the vision as bold yetrealistic, and for the whole organisationto embrace the proposed change(Kotter 1995).As indicated on the model, a change context is intimately linked to leadership, organisational structures, management systems, and culture.

Emotional Intelligence

Emotional intelligence(Mammoth Equipment and Exhausts) are attributes that determine how a person perceives value and is able to manage their emotions and relationships(Sivanathan and Fekken 2002; Bourey and Miller).Daniel Goleman (2000)asserts that emotionally intelligent leaders stimulate higher achievement by creating an EQ climate. His EQ competency framework proposesself-awareness, self-management, social awarenessand social skills as key dimensions

Human Resources Management (HRM) Systems

HRM systems areconcerned with the way an organisation attracts, selects, appraises, rewards,and develops itsemployees.“Fit” with other components of the model and perceptions of procedural justice have been shown to be critical for change success . In order to enhance the achievement of desired behavioural outcomes, the organisation has to recruit the right people. This could be achieved by incorporating the MBTI personality test into the recruitment process. Progress towards displaying desirable behaviours during change could then be monitored by using a behaviour test such as the Circumplex.

Risk Management

Establishing business operations in a new country may involve considerable economic, political, commercial, socio-cultural, and regulatory risks. Therefore, risk management (RM) is an integral part of the proposed change model. Figure 4 shows the AS/NZ ISO 31000: 2009 RM framework, which would be compatible with the change model as it takesboth the organisation’s profile and context into consideration. The framework facilitates integration of RM at all levels of the organisation. However, its effectiveness depends upon on-going commitment by senior management.

Processes

This element of the organisational architecture is concerned with how work is accomplished. It includes generation, storage and communication of knowledge, goal setting, decision-making,allocation of resources, group functioning, and conflict resolution.

Managing change in a cross-cultural context

As MEE continues to grow globally, employeesfrom different cultural backgrounds willneed to work and communicating with each other. If differences in values and beliefs are not reconciled and aligned to the strategic intent, they may act as a barrier to change and a source of conflict (Branson 2008). Therefore, demonstrating cross-cultural awareness and sensitivity is critical and consistent with Social learning theory(Black and Mendenhall 1990). Figure 6 presents some of the cultural differences managers may encounter when managing business across cultures.

National Culture

Hofstede’s widely cited cultural value framework identifies five cultural dimensions that distinguish one national culture from another. This has significant implications for leadership style and change methods adopted .It is believed that national culture is so deeply ingrained it prevail over organisational culture, yet traditional OCD theories/modelstend to assume western values. Furthermore, OD practices such as Action research inherently assume a systematic approach to solving problems, based on cognition and reflection. Such approached may be ineffective in cultures where people tend to function based on hunches and emotions.Therefore, the proposed change management model incorporates theunderstanding that people from diverse cultures interpret and react to the same information differently. Such awareness would facilitate adoption of “context-based” approaches.

However, Hofstede’s work has been criticised for its methodological “flaws” (Schwartz 1999), assumption of cultural homogeneity, and the assumption that distinct cultures are bounded by national boarders.Others contend that conclusions based on a one-company study cannot be considered as representative of the entire cultural system of a country. Considering today’s internationalisation and convergence of cultures, it may be argued that such cultural stereotyping is now out-dated.

Organisational culture

Organisational culture (Figure 7) is embedded within the organisation’s vision and mission statements, values (both espoused and in-use), communication, leadership style, policies, procedures, recognition and reward system, internal politics, and decision making processes. Itgoverns individual/group consciousness, dynamics, and behaviours. Effective diagnosis should reveal values in-use as these drive behaviour .In some instances implementing a new vision may require changes to the organisational culture. This can be very challenging and costly as it entails altering deep-seated values. Leadership behavioursand implementing HR practices that reinforcedesired values and behaviours may facilitate cultural change.

Individual/Group Dynamics

Readiness/Resistance to Change.The proposed change model recognises the fact that when confronted with fundamental change, people react both cognitively and emotionally. Brenner (2008) and Lines (2005) argue that organisational change is more about changing human systems; hence drivers of change success are more psychological/emotional in nature than cognitive.These views, which are consistent with Lewin’s Field Theory (Burnes 2007), are shared by Farias et al. (2000) and Grady, Magda, and Grady (2011). Thus, change success depends on broader organisation members truly embracing the proposed change and adopting new behaviours.This is represented as “unfreezing” on Lewin’s three-step change model. Collaborative and participative approaches were considered critical for creating readiness. However, this relationship may be moderated by national culture.

Communication: The change message

Lack of information and/or misconceptions about the reasons for change is what often causes resistance. Therefore, the change message should effectively conveytheperformance discrepancy, appropriateness, personal valence, and self-efficacy elementsso as to effectively create readiness for change.The “dramatic presentations” in studies by Coch and French illustrate the need to communicate the change message in an innovative, attention-grabbing manner. The model acknowledges that the emphasis place on each form of communication (oral, written, facial expression, gestures, body language and posture) varies, for example, between low and high context cultures.

Participation

The model emphasises the need for direct involvement and participation by broader organisation members affected by change in planning and implementing change. Cummings and Worley (2015, p184)and Lines (2004)cite generation of diverse ideas, early identification of potential barriers to implementation, and increased commitment to implementation as some of the benefits of stakeholder involvement.Broader participation could be achieved by creating an anonymous suggestions repository and conducting regular engagement meetings. However, such participative approaches would be more effective in egalitarian than in high power distance cultures.

Organizational Learning

Organisational learning (OL) refers to organisation’s capacity to acquire, develop, and use newknowledge to improve organisational performance. Since the focus of OL is changing behaviours towards experimentation and reflection, it facilitates institutionalisation of change capabilities, which can confer a long-term competitive advantage.OL can be enhanced by having structures (e.g., information management system), HR practices, and a culture that facilitate generation and sharing of knowledge, ownership of actions, and continuous learning. Empowerment and self-efficacy are pre-requisites for OL.

Conclusion

This paper presented a change management model that could facilitate a holistic approach to cross-cultural change at MEE. The model is dynamic and adaptive, which makes it applicable to any other similar organisation. Establishing a strong vision, transformational leadership, communication,cross-cultural awareness and sensitivity, and HR practices were shown to influence individual/group dynamics and reaction to change. There has to be congruency among these elements that reflects the specified cultural context for change initiatives to be successful.