Barriers to Change (graded)
Addition/Subtraction Company (A/SC) is a textbook publisher for math education, including 1st grade through graduate school levels. The company has been supplying textbooks to public education schools (grade – university level) for 55 years. The company has always prided itself on the loyalty it shows to its employees in that almost all of its authors are full-time employees, and very little of the work done in the organization is farmed out to independent contractors. However, over the last 10 years, the earnings of the company have taken a huge hit, partly because of the No Child Left Behind Act, which caused some of A/SC’s textbooks to fall out of print before they made a profit, and partly because of the increase in costs due to the company’s health insurance premiums when a large number of their employee base (and their families) contracted serious illnesses requiring lengthy and expensive treatments which has impacted the bottom line of the company. The HR Vice President has reviewed the business practices of their two main competitors, and realized that they are making their profits because they rely mainly on independent contractor authors, paying them only royalties on sales versus the salary/benefits packages which A/CS employees make. Further, because the other companies have a wide open subject matter expert pool by using independent contractors, they are much more nimble at reacting to changes in need of the market, and they can offer more math areas in their textbooks, giving them a larger market share. In fact, the last projection which was done by the marketing team showed that A/CS was going to be out of business in two years if they don’t change something quickly. The HR Vice President is going to recommend to her CEO that the author group of employees (numbering 510) be downsized out of the company and replaced with independent contractors. Further, because of certain employment laws, none of those who are downsized will be invited back as independent contractors. The publishing team will be expected to work with independent contractors and manage all book writing projects using less human power as well. That team will be downsized by 15% over the next year. Choices of “who” will be downsized will be based on a review of the last two years of performance evaluations, seniority, and roles.
This week, discuss the barriers that will exist to successful implementation of this change. Along with discussing how the change itself will be perceived by the employees, talk about risks to the company, internal and external factors which will create barriers, and challenges to overcome them.
What are the barriers in the A/SC case? For each of the barriers, be sure to identify how the change will be perceived by the employees, identify the risks to the company, the internal/external factors that are involved, and the challenges involved in overcoming the barriers.
This is a very interesting case and there are so many companies facing issues similar to do this in today’s business world. The barriers to organizational change that A/SC is facing include:
- Resistance to change – complicate the employees jobs and/or roles.
- Fear of the unknown – If they are cutting staff based on certain factors (evaluations, seniority, roles, etc.) and “who” will be cut. They will have the fear of losing their jobs.
- Competitive forces – in many cases external pressures drive change, which in this case would be the other textbook companies that rely on independent contractors, which eliminates having FT staff with benefits.
- Complexity – the staff may feel that if organizations develop more complex processes (with less staff) then change becomes more challenging. Complexity of change is a fundamental barrier in any organizational change (Mar, 2013).
There are many reasons why employees resist change. Some of these include: dislike of change, uncertainty, perceived negative effects, lack of clarity of what is expected, perceived “clash” with ethics, disagreement with the way the change is being managed and so on (Palmer, Dunford, & Akin, 2009, p. 170). All of these relate to this company and how they staff may be feeling. All of these factors lead to many challenges in overcoming the barriers.
Mar, A. (2013, March 29). 5 barriers to organizational change. Retrieved from http://management.simplicable.com/management/new/5-barriers-to-organizational-change
Palmer, I., Dunford, R., & Akin, G. (2009). Managing organizational change: A multiple perspectives approach. (2nd ed.). New York: McGraw-Hill/Irwin.
I would agree that the main barriers are the resistance to change and resistance to change. Yes the competitve forces are the driving reason why the changes are being made in the first place but the company is unsure of when these changes will take place. The employees, knowing that the entire workforce will be downsized aside from the small percentage kept on, will be unable to focus or get work down effectively. This will have am effect on these changes being made. When your employees fear what will Happen in a company, this tends to manifest in their work. The main risk is that the company will still close within 2 years even after downsizing because there is no guarantee that the changes your competitor make will be right for you and it may not take losing all your employees.
I think employees’ resistance to change and fear of the unknown will be the most significant barriers to change during downsizing. The employees may resist the change because they perceive a breach of psychological contract (Palmer, Dunford, and Akin, 2009). A/SC Company prided itself on loyalty to its employees by not hiring independent contractors. Once the company decided to downsize 510 authors and hire independent contractors, the staff may feel as if the organization breached their “psychological contract,” and therefore, this change would be perceived very negatively. Additionally, the employees may perceive the change as excessive because the downsizing creates a “shaky foundation” and “chaotic” state (Palmer, Dunford, and Akin, 2009). The publishing staff has a fear of the unknown because the downsizing is based on evaluations, seniority, and roles. The authors are not only losing their jobs, but they are not allowed to be hired as independent contractors. The employees may perceive the change as chaotic because the company is abandoning past operational practices and introducing new independent contractors.
The risks associated with downsizing and hiring independent contractors are low employee morale and loss of loyalty among employees that remain with the company. With the downsizing of the authors and additional downsizing of the publishing department, many employees may not feel confident in the security of their position, and therefore, seek employment elsewhere.
The internal factors that create barriers include the possibility of management not supporting the downsizing, reinventing their organizational culture, and requiring staff to perform more responsibilities with fewer workers. The external factors include staffing independent contractors and competitive pressures from other companies already utilizing the strategy of outsourcing, which has proven to be more competitive in the market.
A/SC will face the challenges of recreating their organizational culture and structure while rebuilding their reputation, employee trust, and competitive advantages. To overcome these challenges, it is essential for the company to thoroughly explain how the change will be implemented and the rationale for the downsizing, reiterating that changing to independent contractors was necessary for the viability of the company. The company should emphasize the change was made to save positions that would have otherwise been lost if the company dissolved. Furthermore, the company should strive to strengthen employee relations in order to retain the valuable employees that are left with the company and rebuild their trust. In an effort to rebuild trust, the organization should work with the remaining employees to create an efficient way to make the transition and to establish roles for the staff in the new company structure.
Palmer, I., Dunford, R., & Akin, G. (2009). Managing organizational change: A multiple perspectives approach. (2nd ed.). New York: McGraw-Hill Irwin.
In this case scenario, there would be many barriers to successful implementation of this change for Addition/Subtraction Company (A/SC). There are going to be several changes and issues that management is going to confront and some of them are:
– Changes in the organizational culture and dynamics as the company’s employees would have to deal with independent contractors in the future
– Laying off the existing employees
– Operational issues emerging from those changes
As employees are directly getting affected by the changes and their organizational identity is threatened, there would be active resistance by the employees. On the other hand, there is an organizational imperative for the changes otherwise they stand a risk of going out of the business. Barriers to change would be in the form of –
Fear of losing the job – As 15 % of the employees (Approximately 76 employees) would be laid off, they would most likely not be willing to accept this change especially when the market condition is not good and they may not be able to avail all the salary/benefits packages that they enjoy as an employee of the Addition/Subtraction Company.
No clear information to employees and thus they may fail to understand the changes – Sometimes proposed changes are not complemented by clear information as to the specific implications at the level of action by individuals. Where this is the case, the chances increase that employees will fail to convert a change initiative into supporting action at their level of the organization.
Belief That the Specific Change Being Proposed is inappropriate-Employees may perceive this to be abrupt action on the part of the management and so they may not show their readiness for change. They would think that for the past 10 years, there was never a need for a change and suddenly, the management is proposing for a drastic change which they might not like and may feel it to be inappropriate.
Belief That the Timing Is Wrong – People may resist because they might believe that the timing to be wrong. This may be due to change fatigue or it may be due to a completely different matter such as the view that the proposed change would have undesirable effects on them.
Of course the employees wouldn’t like the changes and will feel discomfort with the uncertainty created by management’s actions. They may not get another job in the market and the case also states that because of certain employment laws, none of those who are downsized will be invited back as independent contractors. All these create a lot of uncertainties in the mind of employees.
Class: Last week, we talked about the Force Field analysis and how it can help us think about the forces which play into change plans. Let’s apply what we have learned so far in the term to start thinking about how management actually erects barriers to change, and ways to avoid doing that, or ways to tear down these barriers. What management-level barriers might arise as a result of the change plan in the A/SC case?
This is a very difficult situation to have to deal with! One management-level barrier would be their lack of support for the change. If the managers do not fully support the change that needs to be done it will be very hard to make it successful and be rolled out to employees.
Another barrier is need to work with a smaller team. This causes a lot of stress on all remaining employees and will lower morale. Downsizing itself lowers morale but added in a heaver workload makes it even worse.
downsizing is not always the best decision and sometimes it is the most difficult decision to make but is the right one. A manager can erect barriers to change by not communicating where the company is or the goals for the future. When you make changes and don’t communicate them, you allow mistrust to set in and employees will resist whatever changes you try to make. You can avoid that by having meetings with your employees or laying out what goals you are trying to accomplish and how those changes and goals will effect them.
if management would have stated the condition of the companies finances to the employees they would not have been so blindsided by the idea of hiring independent contractors. It may have been viewed as an aid to the company instead of a betrayal by the decision of the HR department.
Resistance to change is normal and managers should expect to encounter some resistance within the organization. In order for change to be successful, people must be motivated to get rid of old habits. I believe education, communication and incentives are key factors in minimizing negative reactions. Employees need to be informed in advance about the nature of the change, the logic behind it and how they are affected by it. To ensure cooperation, employees must be educated about the change and be trained accordingly. It might also be necessary offer some form on incentives to help overcome the resistance.
I think that A/SC could to have the small groups or teams and communicate with them about there concerns. The leaders or manager can answer any of there questions and at the same time build their trust and confidence with the company. The experience. Internal forces with downsizing and external forces with No Child left behind act. Therefore, it will take management to implement the change probably with settings in a small group.
This article identifies 3 barriers to change that managers experience. In order to implement change you have to address the following issues, which are:
Habit: As a manager, you have to change up routine and practices by building trust between you and your employees. Having trustworthy relationships will help convince your employees that the changes are positive or necessary.
Apathy: Management should explain how the change will effect the team and that in order for the company to progress, changes need to occur. You need to be on their side and explain things in a way that are beneficial to the employees.
Rebellion: Employees may not accept the change and might do things to prevent the changes. Being aware of this barrier can help management deviate from these issues when the time comes (such as allowing upper management deal with the rebellious employees and consequences).