In this assignment, you will reflect on leadership approaches and change management models.
Read Case 4.1 in the eTextbook, and respond to the five prompts below (i.e., do not respond to the questions provided in the eTextbook).
Explain why the bank’s second change implementation negatively affected staff morale.
Explain three obstacles to the bank’s successful change implementation.
What roles are needed to successfully execute a change implementation? Explain why those roles are important.
Discuss the players involved who served as inhibitors or facilitators of change; what were their roles? Explain the results of their actions.
Discuss a different change framework that may have resulted in a successful change implementation. Explain why the selected change framework may have resulted in a successful change implementation.
Your case study must be a minimum of two full pages (not counting the title and reference pages). You must include an introduction, and you must use your eTextbook and a minimum of one scholarly source that is academic in nature from the CSU Online Library to support your essay.
Adhere to APA Style when constructing this assignment, including in-text citations and references for all sources that are used. Please note that no abstract is needed.
Instructions In this assignment, you will reflect on leadership approaches and change management models. Read Case 4.1 in the eTextbook, and respond to the five prompts below (i.e., do not respond to
CASE 4.1 MYBANK: A CASE STUDY OF ORGANIZATIONAL CHANGE Cameron Allan and Patrick Dawson Our illustrative case examines an attempt to implement a new managerial approach to the practice of Human Resource Management (HRM) that required a reorganization of work in the development of collaborative employee relations. The case demonstrates how the commitment of middle management to strategy implementation cannot be taken for granted and can significantly influence the successful management of change, particularly in cases where differing vested interests between management levels and functions do not align with strategic objectives. The case study of a medium-sized bank (referred to as Mybank) identifies and analyzes the range of choices that were open to managers in developing implementation strategies, and how these were modified over time. In particular, attention is given to a change in management strategy from bottom-up implementation to a top-down approach. The bottom-up approach to change During the 1990s, one of the senior executives of Mybank became convinced of the benefits of a quality improvement programme for reducing costs in forming quality improvement teams to identify and rectify inefficient work systems through the elimination of waste and rework. The attraction of such an initiative also stemmed from its potential to achieve cost reduction in-house, using existing staff to improve quality and customer service as well as offering the organization an ongoing methodology for continuous improvement. In embarking on change, the implementation strategy adopted was as follows. An outside consultant was used to introduce the philosophy and tools of the change programme to senior and middle managers in a series of workshops. Once familiar with the concepts and principles, these managers were then expected to encourage their staff to form quality improvement teams to solve specific work problems identified by either the general staff or managers. The involvement of general staff was seen as a crucial issue: operational staff were seen to be intimately acquainted with their own work processes and thus ideally placed to recognize existing inefficiencies and to make recommendations to rectify them. To assist in the implementation process, a quality support group of two people was established to provide training and facilitation for general staff involved in quality improvement projects. In time, it was hoped, the philosophy and methodology of continuous improvement would become an integral part of everybody’s job. This model relied on a bottom-up approach based on operative staff involvement with support from management. As one manager expressed it: ‘Management’s role was to support it and to encourage it rather than be involved in it.’ As it turned out, this initiative was only fully implemented and operationalized in a limited number of areas (mainly in departments with routinized administrative tasks). Participation in quality improvement teams was voluntary and comprised 5–10 intra-department general staff and a quality coordinator from the quality support department. The role of the quality coordinator was to act as a facilitator, mediator and trainer for the team. Once a problem had been identified, the team would consult with any persons or departments that either used the output to the work system or supplied input into the system. The team would then identify possible inefficiencies, analyze why these may occur and then make recommendations to management as to how the system could be improved. Interestingly, the views of general staff about the new initiative were polarized: they either hated it or loved it. Those that hated it either didn’t want to be involved, didn’t understand it, or were simply happy just to get on with their own work. As a supervisor put it: ‘They don’t want to get involved. They just want to do their 40 hours.’ Employees who embraced the initiative were particularly excited about being given the opportunity to contribute to the construction of their own work organization. As one staff member recalled: ‘I have never worked in an organization [until this one] that wanted to hear the input of … those down the bottom.’ Other staff expressed initial trepidation but once involved became active supporters: ‘It was absolutely terrific, it improved our system there, 100 per cent, 150 per cent. It’s great!’ In part, the enthusiasm of some employees can be explained by the material improvement in their working lives: I was working overtime, at times, back until 7.30, 8.00 o’clock at night and he [the manager] told me I had to take three days off all my work, forget about it totally and go into this room and do this thing. Oh, my God, I’m going to be here till doomsday, trying to fix this thing up. It took three days, and it was great. It made such a difference that we stopped doing overtime. It was amazing. Helped us out tremendously. Indeed, so successful were some projects that operations or procedures that had taken weeks were reduced to a matter of days. However, even among the most ardent supporters, enthusiasm soon waned. This was due to two factors. First, employees were still expected to complete all their other tasks, in addition to the work required by the change projects. Consequently, improvement meetings that lasted one or two hours could result in quantitative work overload. Even managers who were supportive recognized this problem, as one stated: ‘The resistance you get is, “Hey! When do I have to do this by, I am flat strapped now!”‘ The second factor that caused disillusionment among employees was that management rarely accepted their recommendations for improvements. This was seen to be particularly frustrating given the time, effort and enthusiasm many staff had put into projects. As one employee explained: I was leading a project … looking at our relationship with builders and under-construction loans in general. We saw it through to completion; we had some recommendations that we thought were good ones. Some of them were put in place but the major ones weren’t. Upper levels of senior management in the bank decided that it wasn’t the way to go, and we weren’t going to do that. That was really running into a brick wall. The non-linear process of change The failure for the change initiative to be adopted in many areas of the organization was due to a number of reasons. The most important was the reluctance of senior and middle managers to actively support the change. They were sceptical about the initiative and felt that it was better suited to the manufacturing sector rather than financial service operations (one more ‘open-minded’ manager did concede that the initiative could have some use in administrative areas of the organization). As one manager expressed: ‘We are more administrative than a lot of other areas and therefore responded to it a little bit better than other parts of the branch.’ Many managers were of the opinion that their departments were already overworked and simply could not afford to allow their staff to take time off to become involved in this change initiative. For some, the acceptance of change implied, implicitly at least, that managers recognized that their departments were currently inefficient and improvements were possible. Interestingly, one of the most common reasons expressed for the lack of adoption was the lack of commitment from top management. As one person put it: They [management] agree that they understand the concept, that they felt it is necessary and they see the advantages, but when it comes to the role-modelling or leading or doing, they back away at a million miles an hour. Maybe they have got too much real work to do, maybe they don’t really understand anyway … I don’t believe that we have still passed the first step. That is, have a common understanding at the top and a total commitment. The Managing Director also played a part in influencing the process of change. He had a relaxed management style and assumed that departments would become involved in quality improvement projects on their own accord. Participation was not mandatory. Although this ‘friendly’ and open management style imbued the organization with a strong culture of family values based on respect for the individual, many people also interpreted it as a lack of support from the Managing Director for the initiative. By 2001, the twin effects of limited senior-management support and middle-management resistance meant that the initiative had ground to a halt. The top-down approach to change In 2003, senior management decided to once again review the company’s cost structure. Mybank had committed themselves to building a new corporate headquarters and the prospect of this major financial outlay plus the firm’s continuing high level of operating expenses stimulated the firm to seek cost savings. The firm brought in a large accounting firm to examine the company’s operations and to make recommendations on how best to reduce costs and improve performance. In an almost identical fashion to events previously, the firm elected to use an employee involvement initiative to achieve the potential cost savings identified by the consultant group. However, on this occasion, the bank adopted a top-down rather than a bottom-up approach to the implementation of change. A consultant was brought in from America to help the organization with their implementation strategy. The consultant recommended that senior managers play a major role in the change initiative. Their role was to identify organizational problems and the likely causes; specify how improvements in performance were to be measured and what the acceptable level of performance would be; nominate individuals to analyze and rectify the problems; and specify timeframes. This implementation strategy was expected to motivate middle managers through highlighting the commitment of senior management. In practice, however, this top-down approach also had its difficulties. The General Manager of Retail Banking illustrates an example of some of these problems in using a top-down approach to amalgamate two of his lending sections. The bank had two personal lending sections: a housing loans section, and a consumer loans section for credit cards, overdrafts and personal loans. Within the established banks, there would normally only be one lending section, which would process both types of loans. The disadvantages of having two separate sections were that many personal clients would often have both types of loans. Thus, having their records spread across two separate sections led to duplication and created administrative problems for the management of clients’ accounts. In addition to the integration of two departments, the General Manager also elected to introduce a new management layer that had experience with both forms of lending. Traditionally, staff in the housing loans section knew little or nothing about personal lending and vice versa. Consequently, managers experienced in both forms of lending were recruited and located between supervisory staffs and the Departmental Manager, with the title of Regional Lending Managers. However, rather than physically combine the two areas in one location and develop training systems to allow the multi-skilling of staff over time, the task of integration was seen to provide the bank with an ideal opportunity to critically examine the whole structure of work systems in order to eliminate unproductive tasks and perhaps reduce staff levels. As such, the integration of the two departments became a major change project. Four newly appointed Regional Lending Managers were given the task by the General Manager of amalgamating the departments to ensure that the new process became operational within a six-month timeframe. This group discussed and formulated an implementation strategy through consultation with employees in both departments to establish the timing and range of functions and tasks performed. Each task was then scrutinized to determine whether it was ‘value adding’, ‘rework’ or ‘non-valuing’. Where possible, tasks that were classified as ‘rework’ or ‘non-value adding’ were eliminated. The remaining work tasks were then flow-charted and bunches of related tasks lumped together to form new jobs. Staff were then allocated to these new jobs. The redesigned process reduced staff numbers by eight. The bank had a policy of not retrenching people, and those personally eliminated from the new system either found alternative positions within the bank or they were kept on as ‘floating’ staff until they were able to find positions elsewhere. Although the project was given total support from the General Manager, the new Regional Lending Managers experienced a lot of middle-management resistance. For example, some of the Departmental Managers immediately superior to the Regional Lending Managers strongly resisted their proposed redesign of work organization. These managers were intimately acquainted with the old processes and felt that the new design was at best unrealistic and at worst unworkable. This middle-managerial resistance slowed down the progress of the change and acted as a major barrier to securing outcomes within the six-month timeframe. In the case of two managers, their obstruction was so harmful to the project that they were relieved of their posts. The effect on staff morale was quite devastating. Both managers were liked and respected by their staff. One, in particular, had spent almost his entire working life with the organization and the way he was treated was highly disturbing for other staff. As one employee put it: You know, even us, we’re sort of thinking: ‘Well, I’ve been with the bank for 15 years … and look what they did to Garry. They weren’t very kind to him. How are they going to be with me?’ Staff morale had also deteriorated because of the way in which general staff and supervisors were consulted about the design of the new system. As one change agent pointed out: We simply could not have involved everyone in the reorganization of retail lending. No one could think of a way to do that because everyone would have a different idea of the way it should be. It would have got too big. So we decided to use a small team. This top-down approach to change offended many of the general staff, especially those who had previously been actively involved in the earlier ‘bottom-up’ change projects. Once again, the implementation of change did not prove successful, only this time the strategy adopted by senior management had failed in its intentions to mobilize middle management commitment and local staff enthusiasm. In the words of one general staff member who had been a very active participator in the bottom-up approach: Whereas before people used to be involved and we were having hassles trying to convince the people that were up there [management] to get involved. Now it seems to be them, up there, just telling, like a Hitler-type of situation, telling these people down here: ‘This is what you are to do!’