CHANGE AND RESISTANCE TO CHANGE: HOW LEADERS MANAGE CHANGE

It is believed that the only thing that remains constant is change and it is achieved by effective management and competent leadership. Change management is the process of transitioning individuals, teams and organisations to a desire future goal (Murthy 2007). In organizational context, change is implemented by individuals or teams who believe and are capable to implement change. These change agents believe in the alteration of the way thing are done to improve organizational performance (Murthy 2007).

However, fear and uncertainty make some business leader believe there is no need for change management. They believe no change means manager’s job will be easy, strategic planning will be simplified, there won’t be uncertainty, government regulation and policies won’t affect business and technology will be developed to satisfy present needs (Murthy 2007). Despite these notions, it is essential for modern organisational leaders to follow globalisation trends within and outside the organisation.

According to Mullins, the two sources of change are internal and external factors. Internally organisations wants to change their profitability pattern, reorganise the operational set up, respond to conflict within the system, and change the culture and social environment within the organisation. External factors include economic drivers, legislation and politics, competitiveness in the market, and development of new technologies.

According to Lewin’s 3-step model, organisations manage change by forming an integrated approach to analysing, understanding and bringing about change at the group, organizational and societal levels. (Burnes 2004:985). Lewin stressed the management of three-phase process of behavioural modification.

Mullins explanation of Lewin’s model:

Unfreezing-reducing forces which maintains present behavioural pattern, knowing the need for change and improvement to occur;
Movement-development of new attitude or behaviour and the implementation of the change;
Refreezing-stabilising changes at the new level.

Unfreezing- Lewin’s model can be further demonstrated by assessing the change at BP after the 2010 disaster. Bob Dudley was appointed the CEO of BP in June, 2010 to implement and manage the significant cultural change going on at. He set out to shrink the company’s portfolio, adapt to changes in oil and gas regulation, management of information, and changing the company’s strategy from aggressive investment to divestment (Dubois 2012).

Movement- BP set a 10 point agenda in 2011 to implement the changes in phases which include making safety and risk management its priority, improve its employee’s engagement, and reduce its huge portfolio through divestment.

Refreezing- BP was able to pay most of the fines and compensation for the Gulf of Mexico oil spill. The company increased its investment in safety and risk management, technology, renewable energy, and upstream production. The change process generated $38bil through sales of assets as at Dec 2012, significant increase in the shareholder return and the achievement of 71% involvement rate of employees in engagement with company’s strategic priorities (BP 2012).

The change process at BP met resistance at various levels. First, the top managers fear there will be shift of power to the American side considering the CEO is an American. Second, there is the challenge of changing the organisational culture which is based on expansion through organic investment and acquisition, and whether it’s sustainable. Finally, there is resistance from employees and shareholders who fear the change will affect their financial position negatively. Employees also fear there will be massive job loss.

Apart from managing the change process, like Dudley, managers need to minimise and overcome resistance both at the individual and organisational level (Mullins 2013). To overcome the resistance, managers’ needs to (1) understand the role of culture in the organisation, (2) know the drivers of change and (3) Designs comprehensive action plan that indicates the underlying objectives of the change required. This step enables every stakeholder (individuals) to understand the benefits of the change thereby eliminating major fear. Also, managers are responsible for carrying out change process in a cost effective manner.

Resistance as an ally to change process:

Resistance shouldn’t be viewed as negative response to change rather an opportunity to reflect on how rigid organisational culture and individual perspectives are, and the need for more flexible patterns that will reflect the organisational strategic direction. Resistance should be seen as an important ally in facilitating the learning process and developing further plan to effectively implement the needed change (Mullins 2013). Resistance can be an important measurement of change; it reflects on how future plan should be designed, the factors to be considered and methods to be used.

Change Management in the oil and gas industry:

Change in the oil and gas industry is a constant phenomenon. Technology, political regulations and unanticipated incidence form the most factors for change. Managers need to understand the underlying objectives of seeking change, the tools, people and process needed must be identified. Performances indicators to measure change must be put in place. Also, while managing change, resistance to change must be seen as an important tool to the change process. Managers can build on resistance to design an effective change plan.

MANAGEMENT STYLE AND TEAM PERFORMANCE

Many people, scholars and readers, have attempted the definition of a manager. Each attempt has succeeded in explaining a part of the whole. For this discourse, a manager is that person with a direct responsibility that coordinates the efforts of certain other people, who ordinarily are subservient to him, in achieving the requirements of that responsibility as if it was theirs.

What does the manager do then? He has a goal. He, acting alone, cannot reasonably achieve the goal, so he goes about convincing some others, who are subservient to him, to collectively work at achieving the goal. The manager is often judged more by the output than the process. While the output may be seen as the hallmark of efficient leadership, the process by which it was achieved is of fundamental importance.

While managers often have to perform many roles in an organization, how they handle these various situations depends on their style of management. Management styles are characteristic ways of making decisions and relating to subordinates (Tannenbaum and Schmidt 1973). A management style is an overall method of leadership adopted by a manager. Since the manager is dealing with persons, the effective style he adopts should result in a teamwork that drives at success always.

Researchers have identified two sharply contrasting management styles – the Autocratic and the Permissive/Participative. From these two, scholars introduced other modern leadership styles- the transformational and transactional leadership, inspirational and visionary leadership.

The TRANSACTIONAL manager/leader, one of the modern management styles, makes all decisions. He coins the rationale, sets the goals, determines the actions to be taken and also sets the landmarks for success. The emphasis is on the clarification of goals, work task and outcomes and organisational rewards and punishment (Mullins 2013:385). Managers lead basically on contract and benefit.

The TRANSFORMATIONAL – VISIONARY – INSPIRATIONAL manager/leaders, conversely, allows subordinates to take part in the managerial process. He allows contribution of thoughts and opinions by engendering high levels of motivation, inspiration, and commitment (Mullins 2013:385). He inspires others with his vision for the organisation. Transformational leadership is about transforming business performance by inspiring followers/employees to raise their criteria for success and develop innovative problem solving skills (Dionne and Yammarino et al 2004)

The style to adopt should be driven by the particular demands of the situation, the people and the challenge. Jack Stahl, one-time CEO of Coca Cola stated that the information available to the manager also aids in the choice of style to adopt in any particular situation (Prewitt 2007). He described a situation when per capita sales were at a peak and sales had to be increased. Through the trickles of information, they identified the regions recording low sales and set about ramping up in those regions.

Quite rightly, the style of leadership to deploy is dependent upon the prevailing situation (Tannenbaum and Schmidt 19731). Thus, a manager should not be stereotypical but versatile. He should exercise and be adept at a range of management styles and should deploy them when appropriate. Readers and scholars have concluded that there is no “best” style of leadership (Blanchard et al 1985). And so comes the Situational Leadership model pioneered by Paul Hersey and Kenneth Blanchard, and which Stahl believes to be the best type of leadership style.

Hersey and Blanchard identified four leadership styles – the Telling, Selling, Participating and Delegating. No single style, as stated earlier, is considered optimal for all leaders to use all the time. Effectiveness in leadership is found in the flexibility of adaptation to various decision and task situations. Hersey modelled Maturity Levels of subordinates by considering four combinations of skill and willingness (Hersey 1985). Blanchard created a similar model which he called the Development Level with four combinations of competence and commitment. Depending on the level of these variables, the leader must apply the most appropriate style to fit the given situation.

For each of these combinations, the four different types of situational leadership are:

Directing/Telling– M1 (unskilled and unwilling) and D2 (low competence and low commitment).

Coaching/Selling– M2 (unskilled but willing) and D1 (low competence but high commitment).

Supporting/Participating– M3 (capable but unwilling) and D3 (high competence and low/variable commitment).

Delegating– M4 (very capable and confident) and D4 (high competence and high commitment).

Source: Blanchard and Hersey, 1985.

Blanchard concluded that the leader’s high, realistic expectation is easily transferred to followers. During Stahl’s Coca Cola experience, he started out as a D1/M2 (willing/high commitment but not skilled) protégé under his predecessor, Doug Ivester, who invested time in Stahl. This behaviour, Stahl also exhibited towards succeeding managers. The situational leadership is also applied to team members who are delegated or empowered to take a lead role while handling task.

All the theories and postulations on management styles were founded on the failures of previously held beliefs which assumed humans to be programmable machines. This basis was flawed from the start because humans are rational in thought and action. There is no such single “one-style-suits-all”. The key to being effective is to have a broad repertoire of styles and to use them appropriately.

REFLECTION ON A LEADERSHIP EXPERIENCE

The study of business leadership is very important to every aspiring manager. You learn the basic concept and theories of leadership, the different models applicable to leadership and how organisational leaders have been able to lead and influence their followers. Mullins has help improve my understanding of leadership and how world’s great leaders manage, motivates and empower followers, and maintain team dynamics. We often come across religious and political leaders such as the pope(s), Winston Churchill, Obafemi Awolowo, Nelson Mandela etc.

Globalisation has increased the importance of business leadership. Richard Branson has inspired my understanding of leadership not because he is a billionaire or because he has a big company but how he inspire his followers with his vision. Branson is a good example of a transformational, inspirational, and visionary leader who shares his ideas and vision with his followers. In one of his quote, he said “As much as you need a strong personality to build a business from scratch, you also must understand the art of delegation. I have to be good at helping people run the individual businesses, and I have to be willing to step back. The company must be set up so it can continue without me” (Andersen 2013). Branson’s believes in working with the right people, Empowering, Inspiring, and motivating them toward achieving organisational goal, and also encourages other to develop and achieve their personal visions and ideas.

Richard Branson: A transformational, inspirational, and visionary leader.

Mullins (2013) defined leadership as “relationship through which one person influences the behaviour or actions of others”. He further stressed that the process of leadership involves activities of the group and effect and effective team building. How to lead mostly depends on a leader’s personality and what he wants to achieve with his team. Leader leads by example, persuasion, motivation, and influencing other in a direction. During the course of the module, I understand leaders’ poses power to lead. A good leader should be democratic in power sharing with his subordinates. Power sharing will put a check on the abuse of power by the leader.

To be a great leader like Branson, I must inspire, motivates and empower my subordinates, share ideas and work towards a common goal. The case study on Sporting Goods Store in Victoria, Australia emphasised the need to understand my team’s dynamics; how the team functions, who to hire, how to delegate, assigning role to staff, and the strengths and weaknesses of the team. In the case study, despite the fact that Bill has a good track record in performance, he failed to understand his new team’s dynamics. He also failed to handle the sale department manager, Sally who spends lots of time socialising with customers. Sally is a great asset to the store and she needs to be motivated, supported and utilised effectively.

During my research on ethical leadership (blog4) and change management (blog3), I understand the positive impact “doing the right thing” has on my subordinate’s engagement with organisational goal. Been ethical simply improves productivity and team success (Owolabi 2013). A good way to do this is to create code of ethics for the team. Aside leading the team in the right way, I also need to seek team growth by creating and managing change, and to overcome resistance.

The group activities in the module proved vital in improving my knowledge of leadership and management. The first take gave me the experience of working in a diverse team. I was in a group that consist of 5 Chinese, 4 Nigerians, a lady, and a member below 25. We merged ideas to build a cathedral using Lego. During and after the activities, we shared ideas, gave feedback and appraisal to each other. Sharing feedback has helped me to correct inaccurate perceptions, adjust my behaviours and helped to conduct a self-assessment.

The feedback I got from my colleagues on how well I communicate and share my ideas during group showed I have good interpersonal skills; I can communicate well with team members and coordinate team exercise. During preparation our team’s presentation, I acted as the leader, delegated roles and coordinates the team’s work. All my colleagues commended me for leading task and the effort I put into team’s work. To enhance my leadership ability I need to further develop my interpersonal skills and leadership skills. The first step is to continue taking leading role in group activities during my study as well as attending seminars and workshop on leadership.

To be a future leader, I need to develop some set of skills to be effective in leading others. This means leadership can be learned through education, training and practising. Leadership development is not just for people at the top but everyone. To be responsible for others, I need to develop my leadership and interpersonal skills as well as develop my diagnostic ability.

EFFECTIVENESS OF A DIVERSE TEAM

WHY DIVERSITY?

Globalisation has led organisations both profit and non-profit to compete for new customers and resources, and in doing so, they soon recognize the value of diverse team in achieving organisational goal. Business leaders see diversity as the collaboration of different personalities and skills set to approach and solve business problems. Diversity focuses on the multiplicity of differences among people (Mullins 2013:153).

Multiplicity of differences among team member

Diversity is beneficial to an organisation, however, it pose a number of challenges if not properly managed.

Pros:

–When a team comprises individuals who differ in personal details, skills, and other factors, there is wide diversity in thinking. Diversity forces people to step consider new thought processes. By opening people up to new ways of thinking, this resulted in new ideas and innovations (Fritz 2012).

–Diversity supports employees’ personal growth. Being exposed to new ideas, cultures and perspectives can help individuals develop intellectually and gain more knowledge (Ingram 2013).

–People with different skills and experiences are able to specialize and address various business problems.

–Diversity allows organisations to select from a wide pool of labour market thereby bringing talented and gifted individual to work together.

Cons:

–Diverse team if not properly managed and coordinated is prone to Racism, sexual abuse, ethnicity conflict, clash of ideas, divisions and sectionalism.

–Diverse teams are prone to dysfunction because the very differences that feed creativity and high performance can also create communication barriers (Fritz 2012).

–Reaching a common understanding or outcome takes more time and effort, and raises the transaction costs of teamwork.

–Although diversity perspectives may be beneficial, the very nature of these teams’ diversity makes it difficult for team members to coordinate their work, and perform.

To avoid challenges posed by working in a diverse team, managers must be able to create a working team, handle conflicts, and manage the team towards achieving its goal. Tuckman and Jensen identify 5 sequential stages a team must pass through during development (Fulk et al 2011:19). The first stage is forming, this where team members comes together. Managers will be responsible for creating a team and defining its goal and objective. Storming- this is the stage that reflects conflicts in the team (Tuckman, 1965). The storming stage is very important in developing a diverse team because this is where team members develop their understanding of their roles and create interactions and task-related work ethics.

Norming– during this stage, team attains cohesion. There’s a shift from relating within the team to accomplish the team’s goals, and handling conflicts. Performing-This is the stage where a diverse team gel; they reach a consensus on how to work together and becomes effective at problem solving. Lastly, Adjourning– This stage emphasizes the end of the team. The team shifts its focus on finishing its task. This stage reflects on the accomplishment of the team (Tuckman & Jensen, 1977).

When establishing new team, managers strive for diversity by managing these development stages and balancing the individuals they select based upon differing factors. The academic and non-academic team at Coventry University London Campus comprises of individuals with different background, age, gender, educational qualification, culture, and different task purpose. The different team and sub-team at CULC present a good example of diversity; this has led to a simplified and specialized service delivery e.g. the LRC which is made up of individual of different nationalities, age, sexes and personality. The LRC is designed to combine the different skills and abilities of its staff to render service to student-learning support, IT service, and student personal development service. LRC is more than a library, just as the academic services, it believes in quality service delivery to student. The success story at CULC is reflected on the diversity of its student; it is hard to pin point which group of students is the majority- Africans, Far-east Asian, and Pakistanis/Indians.

The relevance and success of diversity at CULC can be replicated by any organization. It’s a simple diverse team working together to satisfy its customers. Oil and gas is a global commodity in high demand which means there is high competition in the industry. Companies now operate on safety, innovations and technology development. Success of a company like BP depends on how effectively its diverse team can create cohesion, generate new ideas and solve business problems. Managers in the oil and gas industry must have leadership skills to lead and motivate team members. E.g. Bob Dudley’s leadership at BP.

Managers working with diverse teams should encourage new ways of thinking by seeking open discussion, encourage feedback among team members, actively listen, and practice flexible decision making. Diversity in a team with good leadership will facilitate the development of new ideas and innovations. It is necessary for an organization like BP to create cohesion and manage conflict within the team. Sharing feedback can help members achieve interpersonal congruence; members can correct colleagues’ inaccurate perceptions, adjust behaviors and self-assessments. Though at CULC, it is yet to be known to students whether tutors are allowed to review their colleagues.

ETHICAL LEADERSHIP: LEADERS ETHICAL CONDUCT IN ORGANISATIONS.

The 21^st century has experienced increased publicity of financial scams and moral scandals in some of the world’s largest organisations including Enron, Lehman brothers, and Worldcom. Followers now seek motivations and inspirations from ethical leader with high moral standard. A simple definition of Ethical leadership is the influence of a moral person to move others to do the right thing in the right way for the right reasons (Cuila 2003). An ethical leader influences followers to achieve common goal that makes the world a better place.

Northouse identifies six factors directly related to ethical leadership. He stressed the need for (1) strong Character. Character describes who you are, whether a good leader or a bad leader. Nelson Mandela was known for his modesty, strong conscience, justice and his service to the society. (2) Action describes the way leaders go about achieving your goal as a leader (Northouse 2012:233). Manager’s actions must be in line with moral standard. (3) Goals. Managers must pursue positive goals

(4) A leader has power because he or she has the influence over others. Power can be used positively or negatively. A good example is the activities of the board of Enron who coerce their employees into buy the company’s depreciating shares. (5) Values are the beliefs and ideas behind the action leaders believed is worthy as a leader. (6) Honesty is a trait every follower asks from his/her leader. Ethical is been synonym with honesty (Northouse 2012:237).

Some business leaders believe that when morality intrudes into the business organization, it has the potential of diverting business leaders from the organization’s primary objectives and, as a result, causing it to be inefficient and to deprive stockholders of their due returns (Mendonca and Kanungo 2006:15). However, theory and research suggest that the influences of a unit with strong ethical leadership will support ethical conduct and curb organization members’ serious ethical transgressions (Schaubroeck et at 2012). Leaders achieve higher employees engagement and success by providing subordinates with voice, ask for and listen to their input, and allow them to share in decision making on issues that concern their tasks and the organisation (Kalshoven et al 2011:351). This process directly influences the organisation’s performance and profitability. Unethical leadership could also leads to organisational failure in the case of Enron.

Why Enron failed

Giampetro-Meyer (1998) recognizes that even the most socially responsible businesses have serious ethical failures at times. Enron’s bankruptcy filing in November 2001 marked the beginning of a shocking revelation of ethical failures by large organisations. Ethical behaviour for corporations is outlined in a company’s code of ethics, which specifies how an organization expects its employees to behave (Hunger and Wheelan 2000). The company’s collapse was triggered by failed investments in ventures and the unravelling of a series of dubious limited partnerships called Special Purpose Entities (SPEs) (Sridharan et al 2002). Enron suspended the company’s code of ethics to facilitate improper investment through SPEs which are benefitting the executives. Enron’s audit committee also failed in its responsibilities. The audit committee included educated, respected professionals from reputable institution in the US. Hence shareholders believed the committee would not fail in its core responsibility (Sridharan et al 2002).

Apart from failing in their corporate responsibilities, the executive abuse its power. Decision making was strictly down to the Chairman and CEO while board member has no power to challenge management actions. The executives were accused of living lavish life and enriching themselves with company’s money. CEO Kenneth Lay invested in properties worth $30 million (Eisenberg 2002). The executives were not honest; they manipulate information to deceive regulators, the public and their employees. They exercise excessive power on their workers. Employees were forced to invest their retirement saving in Enron stock and then, were restricted to sell when stock value decline while top executives, on the other hand, were allowed to sell theirs without restrictions (Johnson 2003).

Irresponsible and unethical behaviour by Enron’s leaders appears to be the factor behind the company’s collapse.

According to abcnews (2002) and Sridharan et al (2002). Enron’s unethical practices resulted in:

The company went bankrupt in 2001 and failed to get bailed out.

Employees lost their jobs and nearly all their retirement savings.

Shareholders lost their investment in stock.

Job loss and eventual closure of Arthur Andersen, Enron’s auditing partner.

The collapse created Lack of confidence in the capital market.

Enron’s case has increased the awareness on the role of academics, leadership and followership duties and responsibilities, need for proper ethics integration, and follower’s accountability. Managers are expected to be role models and lead by example. Ethical values should define how managers conduct personal and business practises in their organisations. Such ethical practises will positively influence their employees and organisational success. Leaders should also give voice and challenging power to their followers, this will serve as a check on abuse of power mostly in decision making.