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Resistance To Change Final Case (2)

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UNIVERSITY OF LA VERNE

                  La Verne, California




    Leadership Skills to Overcoming Resistance to
     ...
Copyright © 2010

 Majid Bakarman

All Rights Reserved
Abstract

        Organizations have experienced plentiful organizational change failures over
years, in which the resista...
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Resistance To Change Final Case (2)

  1. 1. UNIVERSITY OF LA VERNE La Verne, California Leadership Skills to Overcoming Resistance to Organizational Change A Case-Based Capstone Paper Submitted in Partial Fulfillment of the Requirements for the Degree Master of Science, Leadership and Management Majid Bakarman College of Business and Public Management Department of Business Management and Leadership May 2010
  2. 2. Copyright © 2010 Majid Bakarman All Rights Reserved
  3. 3. Abstract Organizations have experienced plentiful organizational change failures over years, in which the resistance to organizational changes was a major barrier. However, change agents did not handle the resistance well, because they were lack of certain leadership skills. The purpose of this case study was to examine where the resistance came from, and evaluate to what level each element of the resistance impacted on organizational changes at financial institutions in Saudi Arabia. Research questions consisted of 1) What are the reasons that lead resisters to resist an organizational change? 2) What kind of leadership qualities are the most effective approaches to overcome resistance? Using the surveys monkey for both employees and managers, the research invited 10 employees who identified the behaviors code and the reasons behind resistance to organizational change, and five managers who declared their prospectives about resistance and what actions did they take when they encountered resistance to organizational changes. The results of this study illustrated the most important reasons of employees’ resisted organizational changes, and found out that lack of certain leadership skills were the most challenges for managers who failed to make organizational changes effectively. The research determined that managers should have sufficient leadership skills to drive organizational changes successfully.
  4. 4. Acknowledgement I would like to thank all the professors who work in the MSLM program at University of La Verne, my classmates, friends, and previous colleagues who participated in the survey helped me achieve my goals and objectives in this study. I deeply appreciated them that devoted their valuable time and commitment to the research.
  5. 5. Dedication This is dedicated to supportive parents who inspired me to pursue my higher education, my brothers and sisters who consistently encouraged me, my wife and three children who provided unlimited patience to see me through this effort. For all participants who responded to the survey contributed to design a successful organizational change.
  6. 6. Table of Contents Introduction ………………………………………………………………………………. 1 Literature Review ……………………………………………...………………………… 3 Case Study Methodology ……………………………………………………………….. 10 Results ……………………………………………………………………………………. 16 Discussion and Implementation Plan ………………………………………………….. 22 References ………………………………………………………………………………. 29 Appendices ………………………………………………………………………………. 31
  7. 7. List of Figures Figure 1: Participated by Years of Experience ………….……………………… 11 Figure 2: Participated by Age …………………….……………………………… 11 Figure 3: Resistance as Negative Attitude ……...……….……………………… 12 Figure 4: The Most Influential Reasons Why Employees Resist ….…….......... 12 Figure 5: Resistance is Negative.…………………………………...…………… 20 Figure 6: Involvement, Appreciation & Experience ……………...………..…… 21
  8. 8. List of Tables Table 1: Distinctions Between Management and Leadership …………….…… 6 Table 2: Examples of Factors of Resistance …..…………..………..…………… 14 Table 3: The Current Loan Process is Sufficient or Not …..………....…………… 14 Table 4: Example of Open-ended questions ………..……………....…………… 15 Table 5: Communication Behaviors..……………………..…………..…………… 16 Table 6: Feeling Behaviors ……..………………………………………..……… 17 Table 7: Incentive Behaviors ………………………………..……….………… 17 Table 8:Conflict Behaviors ……………………………………..…….…………… 18 Table 9: The Reasons to Resist Change………………………………………… 18 Table 10: Behaviors managers observed employees resist changes…………… 19 Table 11: The most important reasons why people resist the changes…………... 19 Table 12: The actions managers took as leader to overcome resistors behaviors… 20
  9. 9. Overcoming Resistance to Change 1 CHAPTER 1 INTRODUCTION To be effective, leaders have to overcome resistance to changes in order to achieve organizational growth and development. Implementing organizational changes successfully at financial institutions in Saudi Arabia requires certain leadership skills to institutionalize the change efforts and to reduce resistance. When change initiatives were introduced into the workplace with little positive impact on work performance and operating efficiencies, it results in wasted time and money. Organizations are still suffering from resistance to organizational changes, which demonstrate the need for leaders to continue to develop their skills to deal with resistance in implementing changes in the workplace (Atkinson, 2005). Changes in large institutions are often difficult when leaders are not able to manage changes well. However, the need to make changes will not go away. Organizations need to develop an approach to overcome resistance and drive changes in an effective way. Generating leadership skills to encounter resistance and implement change efforts successfully will contribute to a better performance, increasing motivation to its employees, and satisfaction from their clients (Atkinson, 2005). Research indicates that there is a major challenge in driving organizational changes, which is dealing with resistance that change agents encounter. It is extraordinary for any organizational change does not face any resistance. Recognizing and welcoming resistance as a healthy response and an opportunity to listen to different perspectives is what allows leaders to successfully navigate the change process (Atkinson, 2005). Leadership skills are very essential to overcome resistance to organizational changes. Wise leaders can achieve the organizational changes by applying leadership qualities today in the workplace to decrease resistance to organizational changes. As a
  10. 10. Overcoming Resistance to Change 2 result, organizations improve its qualities and quantities, and win the market share (Geller, 2002). To identify the leadership skills and behaviors that can help to overcome resistance to organizational change and two kinds of surveys were completed by managers and employees in the facilities department of a financial services organization. The survey was designed to identify the most important factors that were most effective in addressing resistance when a change process was implemented. Two precise research questions were addressed: (1) What are the reasons that lead resisters to resist an organizational change? (2) What leadership quality is the most effective approach to overcome resistance to organizational changes? The result of this case study demonstrates the important factors and to what degree these factors influence employees to resist organization change. The most central behavior employees asserted in this case was lack of perceived benefits in the change process. Also the outcome of this case study shows what kind of leadership skills managers would use when they face resistance from their employees. The results of this study show that leadership is essential to implement the organizational change wisely. The recommended action plan is to help managers implement organizational change efficiently by using different criteria of leadership skills.
  11. 11. Overcoming Resistance to Change 3 CHAPTER TWO LITERATURE REVIEW Resistance to Change Leaders understand resistance as having numerous components, which are restraining, and do not support the change. People who resist change play it safe in the current situation, and thus refuse to explore and try a new concept of change, as they do not see the benefits of it. Although resistance often comes from everywhere in the organizational change process, resistance is in itself a subjective issue where managers observe behaviors that do not support an organizational change (Ford & Ford, 2009). “One of the biggest mistakes change leaders can make is to assume that resistance is without merit. But resisters can shed valuable insights about how proposed changes might be modified to increase the odds for success” (Michelman, 2007, p.3). Harvey (1995) declares that an organizational change that lacks resistance is not considered a change at all. There are rational reasons why individuals would support the change process before they clearly understanding its implications. First, followers have only heard about the change, but nothing has been implemented due to ineffective managers. Then, subordinates have no commitment to create or develop the organization. Next, no one is willing to speak up when resistance is present. Fourth, all team members’ perceptions are alike in terms of organizational change, and everyone sees it is an appropriate change. Therefore, resistance is a healthy response to a long- term organizational change which leads leaders to embrace resistance. “A major problem in driving change in organizations is dealing with and managing the resistance you will encounter. Whether the initiative is focused upon coaching a new leadership culture, or promoting new behaviors in customer relationship management, the problems encountered will be similar” (Atkinson, 2005, p.15).
  12. 12. Overcoming Resistance to Change 4 Michelman states that resisters who may have valuable insights in identifying organizational change may prevent implementation of such changes (2007). Carefully diagnosing their mindful inquiries can multiply the chances for streamlined success. It is not critical how well change is planned in efforts, but the most crucial difficulty is to ignore change resisters in management positions. Resisters are one of numerous components of the organization. It is particularly crucial to motivate them. Gullickson (2009) states that an exclusive development can generate changes and valuable principles when resistance arises from individuals that resist the change action plan. Organizations resist radical change with every organizational chart and standard operating procedure manual they can muster. Therefore, to execute a strategy, one must enable change, as well as overcome resistance to change. One model successfully used by a Fortune 100 company recognizes that the following three items are necessary for achieving radical change:  Dissatisfaction with an existing situation will create a need to change.  Clearly communicating a strategic vision will provide a goal for change.  Teaching and practicing the first change steps will lead to an execution orientation within the organization. (Lefebvre , 1997, p. 58). Sources of Resistance Many sources of resistance have an impact on an organizational change. Resistances consist of insufficient ownership, inadequate compensation, increased trouble, management’s commitment, insecurity, norm’s conflict, monotony, disorder, advantage, diverse experience, the unexpected, substantial change, collapse, and exceptional organizational structure. Each factor plays a different role in the organizational change process. Wise leaders predict the circumstance that has more influence than others do (Harvey, 1995). Resistance towards change encompasses behaviors that are acted out by change recipients in order to slow down or terminate an intended organizational change. Several researchers have reported that attempts to implement strategic changes sometimes are met with resistance from those affected by the change. (Lines, 2004, p. 197)
  13. 13. Overcoming Resistance to Change 5 Organizations that operate in dynamic environments are highly competitive in overcoming considerable challenges to implement organizational changes. Consequently, managing organizational change is particularly crucial for an organizational development. In the wisdom of change management, the resistance to organizational change was the most crucial challenge for implementing it (Mabin, Forgeson, & Green, 2001). The reasons employees and even leaders resist change can vary. Some key issues: • Fear of risk; • Lack of clarity regarding purpose of change; • Fear of inadequate staffing to achieve goals targeted in change; • Fear of failure; and • Lack of will to change” (Merisalo ,2010, p.3). Curtis and White (2002) state several reasons for the most serious causes of resistance to organizational change, which increase tension, fear of urgency, and conflicts with change agents. Changees tend to pay attention to their own goals, misunderstanding the need for organizational change, they are not confident about the future development. Organizations did not prepare well to create readiness of the change. More than likely, there was insufficient communication and no system to monitor the change process, and give inappropriate rewards to those who fully supported and facilitated the needed changes. Organizational Change Bommer, Rich, and Rubin (2005) argued that transformational leadership is a vital tool used to influence an effective organizational change effort, which transformational leaders used to motivate employees into becoming agents of the organizational change. Increasing the organization’s performance will support on-going institutionalized organizational change (Goodman, & Rousseau, 2005). Carter, Ulrich, and Goldsmith (2005) announce that each organizational change overcomes objection.
  14. 14. Overcoming Resistance to Change 6 The more individuals are forced to organization change, they more resistance will exist in buy-in process. All changes encounter resistance. Employees often resist change while unconsciously they are changing. Resistance while processing an additional change would virtually disappear. Jones (2010) reported that resistance to organizational change decreases an organization’s competency and diminishes its opportunity to sustain. As a result, inactivity is established in the entire organization, among team members, and at every level. The representative of change does not only embrace responsibility for the relationship with individuals, but he also generates the strategy of change implementation (Ford, & Ford 2008). Leadership Strategy Leaders hold people accountable for accomplishing proactive process activities that contribute to eventual group and organizational success in productivity, quality, and/or safety. Moreover when people see some improvement in the process, they feel rewarded for their efforts and would develop a sense of personal responsibility for continued contributions and never- ending improvement. Thus, by focusing on the process, leaders help people perceive the power they have over the frequent, intrinsic consequences of their jobs. (Geller, 2002, p. 32) Leadership strategies are more effective than management strategies are while dealing with organizational change. (See Table 1) Table (1) Distinctions Between Management and Leadership (source: Geller, 2002, p.47) Managers Leaders Hold people accountable Build responsibility Focus on outcomes Focus on process Focus on extrinsic consequences Focus on intrinsic consequences Give more corrective feedback Give more supportive feedback Train only Educate first Use unconditional directives Use conditional directives Speak first, then listen Listen first, then speak Answer questions Ask questions Promote compliance Promote ownership Limit mindful choice Facilitate mindful choice Mandate rules and policies Set expectations Manage what’s measured Facilitate intangibles Fall victim to stereotypes Treat people as individuals Direct Direct, support, coach, or delegate
  15. 15. Overcoming Resistance to Change 7 Miner (2005) claims that resistance arises from subordinates behaviors toward the organizational change, and such behaviors are decreased by the leaders’ charismatic behavioral responses. Windall (2007) mentions that a wise leader would reward an earlier achievement, take chances to create a desired acceptance of the changers for a recent revision even though organizational change is the better plan to improve efficiency. When determining how to influence employees and reduce resistance to change, managers should consider the relationship they have with targeted employees (Furst, & Cable, 2008). As a consequence, individuals will welcome any variety of change and participate in this plan effectively. Leaders need to have the ability to bring individuals to their side in order to implement an organizational change effectively (Knippenberg & Hogg, 2003). Ashkanasy, and Kavanagh (2006) found that the most crucial competencies of leadership to operate in organizational change are clarifying the change vision, communicate, and implement transparency in to the operation process. The smartest strategy to conquer resistance is to invite changees in to decisions and solutions making that will be delivered to and affect their work. Providing systematic procedure (Lee & Krayer, 2003), “Resistance continues only when leaders do not know how to handle people who are experiencing change. Resistance is the leader’s challenge, not the employees’ challenge”. Schein (2004) announces that managers often face subordinates' resistance to change without adequate consideration which often results in being plans delayed overtime. Conflicts come from lack of readiness to change and insufficient understanding about the vision. Leaders have to achieve understanding and acceptance from every level in the organization through communication to support organizational change, so that the change can be accomplished in a desired time frame. Huang, and Huang (2009) articulates that how “the strength or the direction, the
  16. 16. Overcoming Resistance to Change 8 relationship between resistance to change and change outcome are meaningful and even causal” (p.111). Purpose of this Case Study The purpose of this case study is to examine where resistance came from and analyze to what degree each factor is influenced by organizational changes. The goal of this research is to create a program to assist the internal and external change agents to implement organizational changes effectively by applying leadership skills to overcome resistance. The literature reviewed can provide a broad understanding of the reasons of resistance to organizational changes, which can well prepare leaders to establish the framework to overcome the resistance. Communication system is carefully developed in order to engage the buy in from followers. Characteristics such as persuasive, inspiring, constructive will be import to core competencies for a change agent (Kotter & Cohen, 2002). Research Questions Research Question 1: What are the reasons that lead resisters to resist an organizational change? Kotter and Schlesinger (2008) report that “To predict what form their resistance might take, managers need to be aware of the four most common reasons people resist change. These are a desire not to lose something of value, a misunderstanding of the change and its implications, a belief that the change does not make sense for the organization, and a low tolerance for change” (p.132). Answers to this case research question are important to help managers diagnose where resistance comes from, so it can give the change agent a clear image of why individuals resist organizational change. Therefore, genuine leaders could determine how to deal with resisters for the reason
  17. 17. Overcoming Resistance to Change 9 that they recognize the sources of resistance and where impediment comes from and set up an adequate strategy to deal with it effectively. Research Question 2: What kind of leadership qualities are the most effective approach to overcome resistance? Answering this question will assist agents to understand adequate leadership qualities that enable them to lead resisters to understand why they resist. According to Strebel (1996) “Without such leadership, employees will remain skeptical of the vision for change and distrustful of management, and management wills likewise he frustrated and stymied by employees' resistance” (p.92). This research question is vital for the reason that it generates the valuable impact of leadership qualities for overcoming resistance and implements organizational change successfully at financial corporations.
  18. 18. Overcoming Resistance to Change 10 CHAPTER 3 CASE STUDY METHODOLOGY Overview The purpose of this study was to examine and analyze sources of resistance and create an instrumental tool of leadership skills to help change agents achieve organizational changes effectively at a financial institution. Data were gathered from employees in a major bank in Saudi Arabia, which was set up in 1977, and its capital was worth Saudi Riyal (SAR) 4500 millions. The organization is composed of a headquarters, two local offices, and 45 branches nationwide. It is a large organization with 816 employees. However, the facility department consisted of 20 employees, which is the heart beating of the bank. A major change at the facilities department would affect the whole organization. Participants This study was conducted with two surveys, which included a managers’ survey and an employees’ survey. There were five managers who participated in the managers’ survey, and ten employees at the facilities department who completed the employees’ survey. Selection Criteria Participants were selected using several criteria: All participants in either managers’ survey or employees’ survey had experienced at least one organizational change at the facility department (See figure 1).
  19. 19. Overcoming Resistance to Change 11 Figure 1: Participants’ Years of Experience Seven out of 15 participants were in the range from 28 to 32 years old, another five participants were between 23 and 27 years old, two of the rest were over 33 years old, and only one participant was younger than 22 years old (See figure 2). Figure 2: Participants’ Age The managers who participated in the survey of the study were selected to articulate whether the resistance negative attitude or not to affect organizational changes at facility department with various perspectives (See figure 3).
  20. 20. Overcoming Resistance to Change 12 Figure3: Resistance as Negative Attitude. The Managers who participated in the survey were selected to identify the resistance behaviors that they had observed from employees. The employees who participated in the survey of the study were selected to explain the factors that caused resistance when a new change applied (See figure 4). Figure 4: The Most Influential Reasons why Employees Resist Change.
  21. 21. Overcoming Resistance to Change 13 Survey Instrument All participants were asked to take the survey using the survey monkey online by sending the link to their emails. The bank’s permission was given to the researcher to distribute surveys via a letter of approval signed by the Human Resources Office (See Appendix A).The participants were given an informed consent attached to their emails. Their personal identities were not disclosed, and their responses were used for the purpose of this study only (See Appendix B). The research was conducted by quantitative methodology, which included two separate surveys on Survey Monkey for different participants working on different positions separately. It was the preferred method of data collection for the abroad participants, because it was easy to manage, and data could be collected quickly through emails. The researcher created 10 questions in each survey that designed to collect information either from managers or from employees (See Appendix C and D). Each survey had three sections :The first section was covered the demographics questions; the second section was asked three questions about perceptions of organizational change the in the workplace process; the third section addressed four questions about the reasons of resistance to organizational changes, included one open-end question in the employees’ survey and four open-end questions in the managers’ survey to allow participants to add their insight in terms of organizational changes. The scale used to measure the responses was 1 =Strongly Disagree, 2=Disagree, 3 = Neither Disagree, Agree 4= Agree, or 5= Strongly Disagree, to demonstrate their opinion toward resistance to organization change (Fields, 2002). In addition, rating scale was used that to explain the degree each factor had influenced resisters to resist organizational changes. For example, rating of “1” means that behavior/element had no impact on why the change was not successful and a rating of
  22. 22. Overcoming Resistance to Change 14 “5” means that the behavior/element had a strong impact on the failure of the changes being made to the loan process. Use ratings of “2”, “3”, and “4” to evaluate your perceptions between “not at all” and “very much so” (Harvey, 1995, p.66).(see Table2) Table 2: Examples of factors that cause resistance Example of resources of resistance to organization changes Lack owner ship for the changes to loan process Lack of Benefits Increased of burden (it was “more work”) Lack of communication from senior leaders One of the common questions in each survey, either in managers’ survey or employees’ survey part, was about whether the current loan process is sufficient and needs no improvement to evaluate the loan process contributions to reach the organization’s goal (See Table 2). Table 3: The current loan process is sufficient and needs no improvement Managers Employees Answer Options N % N % Strongly Disagree 2 20% 2 20% Disagree 6 60% 6 60% Neither Disagree nor Agree 2 20% 0 0% Agree 0 0% 1 10% Strongly Agree 0 0% 1 10% Totals 5 100% 10 100% The final portion of each survey, either in managers’ survey or employees’ survey, was included an open-ended questions to allow the participants add their
  23. 23. Overcoming Resistance to Change 15 valuable perceptions, for the reason that the internal culture of the financial organization is played a crucial function to resist organizational changes. (See Table 3) Table 4:Open-ended questions. Example of the open-ended questions What are the reasons that lead resisters to resist change? (Employees survey) What actions did you take as the leader to address those actions/behaviors? (Managers survey)
  24. 24. Overcoming Resistance to Change 16 CHAPTER 4 CASE STUDY RESULTS This case study examined the factors of resistance to organizational changes from both employees and managers perceptions. Results for Research Question 1: What are the reasons that lead resisters to resist an organizational change? This question was answered by ten employees who participated through survey monkey. Individuals explained where the sources of resistance came from and to what degree each factor had impacted organizational changes in the facilities department. The sources of resistance were raised from diverse behaviors, including communication behaviors, feeling behaviors, incentive behaviors, and conflict behaviors. The communication behaviors were explained and rated by employees on three factors, which included: 1) chaos –too much change happened at the same time with an average rating of 3.89, 2) lack of communication from senior leaders who have most knowledge about the change itself, employees who participates in the survey rated this valuable aspect 3.76, and 3) lack of ownership for the changes to the loan process with an average rating of 3.30. Therefore, there is a relationship between resistance to organizational change and communication behaviors are very significant from the participants perceptions (See Table 5). Table 5: Communication Behaviors Communication Behaviors Rating Average 1- Chaos – too much work 3.89 2- Lack of communication 3.67 3- Lack of ownership 3.30 The second behavioral factor was feeling, which includes superiority, insecurity, and loneliness. Participants rated superiority as the most important factor that influenced feeling toward resistance to change with an average rate 3.44. Insecurity from
  25. 25. Overcoming Resistance to Change 17 organizational changes was rated as 2.89 in average, and loneliness was rated as 2.88 (See Table 6). Table 6: Feeling Behaviors Feeling Behaviors Rating Average 1- Superiority 3.44 2- Insecurity 2.89 3- Loneliness 2.88 The third catgory was incentive behaviors, which included lack of benefits, lack of recognition, and boredom. Lack of benefits was the most important factor that lead employees to resist organizational changes with average rate 4.38. Lack of recognition was rated at average 3.56, where employees did not feel appreciated for the effort they made. As a result, they resisted any sort of change in the loan process. Employees gave boredom an average rating of 4.00, where it played an important role in the change efforts, because there was no motivation to learn new things (See Table 7). Table 7: Incentive Behaviors Communication Behaviors Rating Average 1- Lack of benefits 4.38 2- Lack of recognition 3.56 3- Boredom 4.00 The fourth catgory was about conflict behaviors, which included lack of clear organization structure, lack of time to prepare and process the change, norms incongruence, and new knowledge required. Employees had rated the lack of organizational structure with averege rate 3.44 that indicated to the relationship between top management was not effective to facilitate the change efforts. It was hard to make changes in overnight for the reason that it would create confilcts and the change would not be successful. Sudden was average rating of 3.76 in the survey. Participants rated
  26. 26. Overcoming Resistance to Change 18 norms incongruence with an average rating of 3.4 in terms of its influence on change. Employess mentioned that new knowledge required to deal with a new change to avoid conflicts and misunderstanding. It was rated at average 4.11 (See Table 8). Table 8: Conflict Behaviors Conflict Behaviors Rating Ave 1- Lack of clear organizational 3.44 structure 3.67 2- Sudden 3.40 3- Norms incongruence 4.11 4- New knowledge required Managers also articulated the factors of resistance based on open- eneded questions. The most significant factor was explained by mangers was that employees thought that they would not get any benefit from that change, which represented 40% of the respondents. The second factor was that employees did not pay attention to the main goal, which covered 40% of the respondents. The third factor was declared that employees felt inconvenience to make change, which was rated at 10% (See Table 9). Table 9: The reasons people resist change Factors of resistance % 1- Lack of benefits 40% 2- Inattention to objectives 40% 3- Inconvenience 20% Managers were asked about the behaviors they observed from employees during the change.The behavior managers observed on their employees complained about a new procedure, which represented 40%. Postponement was a behavior that managers noticed the employees performed against a new change. Managers also stated that employees just thought about their own ego (See Table 10).
  27. 27. Overcoming Resistance to Change 19 Table 10: Behaviors managers observed employees resist changes in the loan process. Behaviors of resistance % 1- Complaining 45% 2- Postponed 33% 3- Focusing on their Own ego 22% Employees were asked open–ended questions to articulate unique reasons that led resistors to resist organizational changes. The result of this question as the following: The first reason was that no benefits employees got from that change. The second reason was communication system across the hierarchy between managers and employees. The third one was incompetent employees hired in the facilities department. The last one was lack of leadership skills necessary to implement changes (See Table 11). Table 11: The most important reasons people resist the changes. Behaviors of resistance % 1- Lack of benefits 38.5% 2- Lack of communication 23.1% 3- Unqualified hire 15.4% 4- Lack of leadership 15.4% 5- Fear of losing 7.7% Managers were asked to explain if the resistance to changes the process was negative. Sixty percent of the respondents declared that they strongly agreed that the resistance from employees against the change was negative. Twenty percent of the participants either disagreed or agreed that the resistance was negative (See Figure 5).
  28. 28. Overcoming Resistance to Change 20 Figure 5: Resistance from employess to change the loan process Results for Research Question 2: What kind of leadership qualities was the most effective approach to overcome resistance? For Research Question 2, only managers responded to the last 4 questions on the survey in order to answered this research question. The managers who participated in the survey articulated that 60% of them did not feel appreciated for the effort they have contributed to implement the change in discussions and decision making in the loan change process. Moreover, 60% of the managers declared that the earlier change did not contribute to high performance. On the contrary, 20% of the managers that participated in the survey stated that earlier changes led to high performance effectively. Most of the managers who answered the survey did not involve to the discussions and decision-making level in the loan change process (See Figure 6).
  29. 29. Overcoming Resistance to Change 21 . Figure 6: Involvement, Appreciation and Experience The last question in the managers’ survey asked about what kind of leadership managers would initiate with their subordinates to resolve resistance. The most frequently stated behavior was to encourage the employees to do the job more effectively in order to facilitate the success of the change process. Others announced that the best ways to overcome resistance from subordintes were persuasion and influence them to perform effectively (See Table 12). Table 12: The actions mangers took as leader to overcome resistors behaviors Leadership skills % 1- Power 43.3% 2- Encouragement 24.7% 3- Persuasion 17.6% 4- Influence 14.4%
  30. 30. Overcoming Resistance to Change 22 CHAPTER 5 DISCUSSION AND IMPLEMENTATION PLAN Many organizational change efforts failed at financial institutions because of numerous resistances that occur for different reasons. These results are important, because the participants explained the reasons for resistance to organizational changes, which organizations can adopt to overcome resistance effectively. The most important reasons for employees to resist organizational changes were found to be functional expectations, communication, incentives, feelings, and conflict behaviors. The results also clarified that managers considered resistances as negative actions toward organizational changes, so that they often avoided or ignored the individuals who engaged in these actions. The results also make it evident that employees who resist organizational changes have not benn involved in the decision making process. These results illustrate the need for more effective leadership skills to overcome resistances to organizational changes in the financial institute in Saudi Arabia. According to Kotter (1996), a useful purpose of an organizational change would not be understood if the communicators are not delivering the vision of the organizational change clearly to their subordinates. Direction and simple communication are effective more than complicated and indirect communication. Communicating through behaviors about a new approach is more effective to influence the resisters. Listening to the changes is considered a wise communication strategy because the employees are providing valuable feedback, which assume the change is a wrong course. Participants who participated in this case study declared that communication behaviors were taking a major function in the change process. The employees who participated in the survey clarified the reasons of resistance to the change are caused by lack of communication, lack of ownership, and lack of institutionalization of the changes.
  31. 31. Overcoming Resistance to Change 23 One of the most critical aspects to resist organizational changes is pay off. Examining the level of pay off to the employees has a great impact on the implementation. The more the organization generates an appropriate pay off policy, the less the employees resist the organizational change. Employees would not contribute effectively to the change unless they see the benefits for themselves (Harvey, 1995). The majority of the participants either in the employee or manager’s survey emphasized on incentive behaviors led to successful organizational changes. Identifying resistance behaviors to organizational changes is an indispensable process and an opportunity to improve the organizational change, because employees would provide the leader with a new perception from the blind side that the changer cannot recognize it in the implementation. As a result, the leader will lead to create successful change effort (Atchinson, 2005).The majority of the managers who participated in this case study announced that resistance to organizational change was considered as negative behavior from their employees. The most important resource to overcome resistance and drive the organizational change successfully is empowerment. It takes place when subordinates feel that their sustainability is in their own hands, they understand the importance of a task; understand the purpose of organizational change, and are willing to reach the organization goals. If changees do not feel empowered, they are not motivated to collaborate in the change process (Harvey, 1995). The majority of the participants felt lack of involvement in the decision making process, they did not feel recognized and appreciated to their effort, which kept them away from the organizational commitment. Lencioni (2002) mentioned that an efficient path to make certain that a group of changees are focusing their attention on the outcomes of organizational change is to emphasize their benefits to the success of the organizational change. Once changees have a common sense about their supervisor values other than focusing on the
  32. 32. Overcoming Resistance to Change 24 organizational change successfully, they will act the same way as supervisor did to follow the informal norms. A wise leader pays attention to the organizational result, and empowers subordinates to the right direction. The employees who participated in this case study demonstrated that the lack of clear statement of benefits played a significant role in the organizational change to overcome resistance. Moreover, managers who participated in the study declared that inattention to objectives is a major resistance behavior that led resisters to resist the organizational change. Resistance to organizational change occurs when employees lack ownership for the change as well as if employees do not understand the purpose of the change. For instance, employees are more likely to accept change that they themselves have acknowledged and planned. Any major organizational change that is imposed will be performed negatively and result in resistance. The best way to identify ownership is to allow changees participate in the change’s decision (Harvey 1995). The employees who participated in the survey indicated that lack of ownership is one of the most significant reasons why changees did not implement the organizational change effectively. Recommended Action Plan The result of this case study shows that the reasons why employees do not perform effectively in the loan process development in the facilities department in the financial institution. Managers or change agents need to practice leadership skills to enable individuals to contribute to improving and developing the loan process of the bank in order to provide customers with better qualified services. The following steps that will assist managers and change agents to implement the loan process development effectively in facilities department
  33. 33. Overcoming Resistance to Change 25 Communication for Buy-In Creating a competency communication is a crucial aspect for managers. Utilizing communication can increase the urgency of improving the current loan process, because competitors are growing quickly in financial service industry. In addition, acknowledging talented employees who are willing to implement a new loan process to ensure the quality of work at facilities department. A successful communication strategy will minimize the gap between managers and employees to maintain their positive working relationships and give employees’ opportunities to share their thoughts about the strengths and weaknesses of the current loan process. Good communication will allow managers to deliver effectively the task to employees, which is to get the bank’s targeted number of loans each month. A wise communication strategy will help managers to discover the needs of the employees, which are to improve their ability and train them in new skills in order to help update loan process from being manually to systematically. In other words, through communication leaders can identify the specific of training programs that meet facilities department employees’ need to improve their work skills. It will also assist managers to collect and select effective incentives from salaries, promotions, and bounces to motivate employees to perform a new loan process, which delivers better service to customers. Communication between managers and employees is the key to understanding the main needs of our customers to get their satisfaction, as result of which clients will remain loyal to the bank. However, customers will transfer to our competitors when communication went to a wrong way, which will cause the bank to downsize and cuts jobs. Communication systems will allow facilities department’s employees to get an interest rate from treasury department more accessible, so that they are able to respond to customers fast. Communication will facilitate the how
  34. 34. Overcoming Resistance to Change 26 approval of complicated loan issues between top level managers and employees to respond to a client in less time possible. A clear communication from managers will articulate to the employees what percentages should the productivity increased. Communicators could use most effective methods that are group meetings with managers from different levels and employees from facilities department each month; memos to seek feedback, informal one to one talk to deliver the goals setting of department. Institutionalization the of Organizational Change Establishing a new loan process to the employees and managers should plan to create a new loan process and explain how, when and why should implement the new loan process in order to ensure that employees would understand and support it strongly. The factors of Institutionalizations that will allow the new loan process take place, as result will be implemented successfully. Planning and preparation is the first step to maintain origination rules in order to analyze worker efficiency. Managers should be willing to listen to their employees’ perspective in terms of the current loan process and what they think about a new loan process , also participating and involving the subordinates in the decision is to identify what is the new change would be and how the change is will be implemented. Timing is a significant factor to improve daily work task which will result in great attitude job. Therefore, when the timing of change is effective, then the employees would accomplish their mission in timely manner. Moreover, Mangers should articulate that loan change process in clear, simple language to gain the consensus prior to implement a new procedure in the work place. Participation and Involvement in the Decision Making The main function of the leaders in building mutual decision making is to anticipate employees’ needs in the implementation of the new loan process. Employees
  35. 35. Overcoming Resistance to Change 27 will not embrace the new concept of change the current loan process unless they participate in the decision of a new loan process the most effective plan leaders should consider is to expand employees’ support to develop a new procedure in order to fulfill customers. Sharing information about customers’ satisfaction is to demonstrate to employees the effectiveness of the current loan process. As result of that developing loan process is a smart preparation that would keep employees contribute efficiently to a new loan process. Managers or change’s agent involve the individuals who are reluctant to some aspect of the plan and implementation of the loan change process, they can often expect employees who do not want to implement a new loan process. As result of that, listening carefully to employees who refuse to contribute to improve loan process and, if possible, implement their recommendations. Reward System Creating a wise reward system is the motivational key to increase employees’ ownership at facilities department. Articulating the most significant advantages that employees would gain by implementing a new loan process is to give them a clear picture to evaluate the situation. Reward system includes different aspects that are payoff, recognition, and promotion. Employees should be considered as an important characteristic that will contribute in the loan change process by the changers. Employees want to perform their job in a way they can receive their interests. Employees are willing to supporting the new loan process if they believe that they can get benefit from it. Substantially, rewards must be shaped to individuals carefully to fit their desires. Employees have different value some of whom, prefer recognition, favor payoff, others challenge, others honor, others occupation security and so on.
  36. 36. Overcoming Resistance to Change 28 The relation between employees' contribution efforts and loan change process must be prepared clear to individuals in order to encourage them implement the task effectively. Creating a short term program can reward employees who contribute effectively in the new loan process in order to expend their loyalty
  37. 37. Overcoming Resistance to Change 29 References Atkinson, P. (2005). Managing resistance to change. Management Services, 49(1), 14- 19. Retrieved from Business Source Premier database. Bommer, W., Rich, G., & Rubin, R. (2005). Changing attitudes about change: The effects of transformational leadership on employee cynicism about organizational change. Journal of Organizational Behavior, 26(4), 733-353. Bryson, J. M. (1995). Strategic planning for public and nonprofit organizations. San Francisco, CA: Jossey-Bass. Carter, L. U., lrichby, D., & Goldsmith, M. (2005). Best practices in leadership development and organization change. San Francisco, CA: John Wiley & Sons, Inc. Fields,D.L. (2002). Taking the measure of work: A guide to validated scales for organizational research and diagnosis. Thousand Oaks, CA: Sage Publications. Furst, S., & Cable, D. (2008). Employee resistance to organizational change: Managerial influence tactics and leader-member exchange. Journal of Applied Psychology, 93(2), 453-462. Retrieved from Business Source Premier database. Geller, E. (2002). Leadership to overcome resistance to change: It takes more than consequence control. Journal of Organizational Behavior Management, 22(3), 29-49. Goodman, Paul S., Rousseau, & Denise M. (2005). Organizational change that produce results: The linkage approach. Academy of Management Executive, Vol. 18(3), 7-19. Gullickson, B. (2009). Working with resistance. Strategic Finance, 90(8), 9-10. Retrieved from Business Source Premier database. Harvey, T. R. (1995). Checklist of change. Lancaster, PA: Technomic Publishing Inc. Huang, C, & Huang, I. (2009). Resistance to change: The effects of organizational intervention and characteristic leadership. Review of Business Research, 9(1), 110-114. Jeffrey D. F., & Laurie W. F. 2009. Decoding resistance to change. Harvard Business Review 87, no. 4: 99-103. Retrieved from Business Source Premier database. Jones, G. R. (2010). Organizational theory, design, and change (6th ed.). Upper Saddle River, NJ: Pearson Education. Kotter, J. P., & Cohen D. S. (2002). The heart of change. Boston, MA: Harvard Business School Press.
  38. 38. Overcoming Resistance to Change 30 Kotter, J. P., & Schlesinger, L. (2008). Choosing strategies for change. Harvard Business Review, 86(7/8), 130-139. Retrieved from Business Source Premier database. Lee, W. W., & Kraye, K. J. (2003). Organizing change: An inclusive, systemic approach to maintain productivity. Thousand Oaks, CA: Pfeiffer Co. Lefebvre, J. (1997). The battle for change. Mortgage Banking, 57(4), 58-58. Retrieved from Business Source Premier database. Lines, R. (2004). Influence of participation in strategic change: resistance, organizational commitment and change goal achievement. Journal of Change Management, 4(3), 193-215. DOI:10.1080/1469701042000221696. Mabin, V. J., Forgeson, S., & Green, L. (2001). Harnessing resistance: Using the theory of constraints to assist change management. Journal of European Industrial Training, Vol. 25(2), 168. Merisalo ,L.J. (2010). The challenges of change. Health Care Registration: The Newsletter for Health Care Registration Professionals, 19(4), 3-5. Retrieved from Business Source Premier database. Michelman , P. (2007). Overcoming resistance to change. Harvard Management Update, 12(7), 3-4. Retrieved from Business Source Premier database. Rubin, R., Munz, D., & Bommer, W. (2005). Leading from within: The effects of emotion recognition and personality on transformational leadership behavior. Academy of Management Journal, 48(5), 845-858. Strebel, P. (1996). Why do employees resist change?. Harvard Business Review, 74(3), 86-92. Retrieved from Business Source Premier database. Swindall, C. (2007). Engaged leadership building a culture to overcome employee disengagement. San Francisco, CA: John Wiley & Sons, Inc.
  39. 39. Overcoming Resistance to Change 31 APPENDICES
  40. 40. Overcoming Resistance to Change 32 Appendix (A)
  41. 41. Overcoming Resistance to Change 33 Appendix (B) CONSENT TO PARTICIPATE IN RESEARCH Leadership Skills to Overcome Resistance for Organizational Changes FOR MANAGERS AND EMPLOYEES You are being asked to participate in a case study research conducted by Majid Bakarman, from the Master’s in Leadership and Management Program at the University of La Verne as part of a culminating research project. You were selected as a possible participant in this study because your experience in organizational change match me research criteria.  PURPOSE OF THE STUDY This study is designed to develop appropriate leadership skills to assist change’s agents to implement organizational changes successfully.  PROCEDURES Leadership skills overcome resistance to change If you decide to participate in this study, we will ask you to do the following things: Answer a brief survey consisting of10 questions in three categories. The categories are:  Demographics (such as your age, experience, and how often you have been involved in an organizational change)  Questions related to your expectations of how organizational changes would be handled.  POTENTIAL RISKS AND DISCOMFORTS There is a slight risk of a breach of your confidentiality but every effort will be made to maintain your identity and responses as confidential.  PAYMENT FOR PARTICIPATION There is no payment for participation.  CONFIDENTIALITY Any information that is obtained in connection with this study and that can be identified with you will remain confidential and will be disclosed only with your permission or as required by law. Confidentiality will be maintained by means of Confidentiality will be maintained by not publishing any identified information with any survey data. Completed surveys will be kept away from the organization and will not be accessible to anyone except Majid Bakarman.
  42. 42. Overcoming Resistance to Change 34  PARTICIPATION AND WITHDRAWAL You can choose whether to be in this study or not. If you volunteer to be in this study, you may withdraw at any time without consequences of any kind. You may also refuse to answer any questions you don’t want to answer and still remain in the study.  IDENTIFICATION OF INVESTIGATORS If you have any questions or concerns about the research, please feel free to contact Majid Bakarman, 347 755 0333, Majid.Bakarman@laverne.edu or my faculty sponsor, Dr. Deborah Olson, 909-593-3511 ext. 4579, dolson2@laverne.edu.  RIGHTS OF RESEARCH PARTICIPANTS You may withdraw your consent at any time and discontinue participation without penalty. You are not waiving any legal claims, rights or remedies because of your participation in this research study. If you have questions regarding your rights as a research participant, contact Fred Yaffe, PhD, Director of Institutional Research Board at 909-593-3511, extension 4996 or fyaffe@laverne.edu (University of La Verne, 1950 Third Street, La Verne, CA 91750). By completing the survey, I am giving my consent to participate in this research.
  43. 43. Overcoming Resistance to Change 35 Appendix(C)
  44. 44. Overcoming Resistance to Change 36
  45. 45. Overcoming Resistance to Change 37 Appendix (D)
  46. 46. Overcoming Resistance to Change 38
  47. 47. Overcoming Resistance to Change 39

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