Portfolio Management & Change Management: Using System Theory For Effective Change Implementation

System Approach and Change Management

The present report revolves around the portfolio management highlighting the areas of change management in the organizational context. Particularly, to understand how change can be applied, system theory has been evaluated with the example of application. The report also states how managers can intervene in the change management process to lead the organization towards goals and avoid failure in middle.  In order to understand change management process, a particular change plan has been developed involving Fizz event management operational scenario. The middle management plays a great role in managing the change; thereby, to understand the role of middle manager in the process, the report includes a practical scenario.

Organizational change can occupy a centre-stage of academic as well as managerial scene (Rice 2013). Organizational capability to deal with change is becoming increasingly important in an environment where competition and globalization of markets are strongly intensifying. The internal and external organizational environment remains as the compromised set of relationship that exist between the agents and other factors that could go beyond the organizational control. System approach is an integrative model, which usually harmonizes series of ideas as well as had characterized management thought. However, Morgeson, Mitchell and Liu (2015) arguably mentioned that the increasing complexity of organizational environment makes system concept inadequate in dealing with the complexities in the environment. When digging into the detail of system theory, it has been found that the system approach is known as an integrative framework consisting the ideas of scientific management, behavioral science and management science approaches.

In other words, Cameron and Green (2015) mentioned that system theory considers organization as a complex system, which further holds the boundaries enabling the scope for input and output. This means that organization system usually exists within a wider external environment that exert pressure on its boundaries and environment with which the organization must communicate. The theory also states that a change in any particular part of the system could create the scope for change throughout the system. This means if one single area of the system is changed, the other parts of must change to adapt to new system or changed system. On the other side, Sharma and Good (2013) mentioned that organizational system can be defined with the help of its boundaries as well as internal structure and it is usually considered stable. For example, the furniture company IKEA orders the same 1000 pieces of glass from a supplier in every month and them the supplier increases the price; hence, the change could affect the entire system.

The Complexities of Organizational Environment

This is because IKEA has to adjust the cost of supplies throughout its all network.  More specifically, hence, either IKEA has to develop a product that requires less number of glasses or it has to fulfill the need by locating another supplier. Thereby, according to this theory, it is worth mentioning that change in one part can create changes in many other parts of the organization. Agreeing to this context, Ahearne, Lam and Kraus (2014) mentioned that poor coordination between the organization and its external environment in closed system can inhibit organization’s capacity to grab adequate amount of energy from its environment for success. Nonetheless, Hornstein 2(015) mentioned that in spite of its relevance, system theory does not usually signify when and how the coordination with the organization should occur.

In addition, theory does not state what should be done when the conflicts exist between organization’s environment, work environment and the structure of the organization. For example, Nokia collaborated with Microsoft to regain its market share and deliver a high quality cell phone. Hence, the decision of change –Product development with the hand of Microsoft is a smart one because Microsoft is a large and popular brand. Both the brand coordinated its functions and structure. Product development initiative was Nokia’s main theme of change and to implement this, the firm had to change other structure such as employing new people, extending R&D department with Microsoft (Zamir,  Sahar and Zafar 2014). However, but the timing for developing the coordination was not appropriate. 

The above analysis helps to state that system theory is effective to create coordination between organizational environment, structure and function but this framework only does not signify the timing required for change. Thus, there have been some scenarios where the organizations failed to implement the change due to lack of coordination between the external and internal organization environment. Thus, to deal with such challenging environment, when applying system theory, the first thing that manager needs to do is, collect information about both external and internal organizational environment. This would specifically help to identify the areas that need change and the timing of change. The managers could incorporate the idea of complexity theory to stand the measure of heterogeneity among the variables such as customers, departments, suppliers and technology.

This means that the supervisors or the managers of the organizations should have a consistent follow-up about these elements to avoid delay or failure in the change management process. If above example of IKEA is considered in this case, then, it can be ascertained that managers of IKEA needs to conduct a market analysis to identify the current availability of suppliers, raw materials, market price for raw materials and internal inventory available to them. Hence, the managers can also conduct a strength and capability analysis, which would further help the organization to determine the resource required for change (Too and Weaver 2014).  This market analysis should be conducted especially to learn the current state of external environment of the organization. When the managers know or have information about these elements, it becomes easy for them to coordinate or align the elements such as structure, functions and environment.

Coordination and Change

In addition to above mentioned strategy, the managers can apply the principles of open system theory developed by Nadler and Tushman, where the managers will have information about all systems such as function, structure, markets and organizational strengths (Kuipers et al. 2014). The managers need to make sure that they assessing each of the elements independently. The managers also need to be aware of the fact that one single move –change in one particular area could affect the interaction between other areas of the organization and create a more complex situation to handle. Therefore, as discussed above, market analysis must provide information about each element separately. So, when the change occurs in one single part, the managers can arrange the differences in other parts accordingly. For example, if the market analysis indicates that IKEA has a consistent availability of suppliers, then, the firm can switch to other suppliers for purchasing the required pieces of glasses without changing the entire cost structure, which could be a reason for failure in change. 

The case study indicates that the organization Fizz needs to develop its performance to strengthen its financial performance. The new structure involving teams with different roles and responsibilities. Thus, to implement the responsibility appropriately and achieve team target, following change management has been developed to Fizz Management.

As put forward by Hornstein (2015) organizational change management could involve the identification of groups and people who will require to change as the outcome of the project. Change management could then involve generating a customized plan for ensuring impacted individuals receives leadership support, coaching and training. Thus, in the case of Fizz, each member in team 1 starting from Gemma to James need to be communicated about why the new plan of change is implemented. The group members must know why the structural change been applied; why are the desired outcome of the newly developed plan. Before, getting the members into action, the managers should interact with the group members and share the plan. Hence, asking employees or commanding them to do things as told, might not work, as the case study indicate that groups members are suspicious about the change. The following model helps to understand how the change should be applied to the present context of team 1 under new structure.

Creating urgency: The manager of team 1 needs to identify the potential threats, which might appear in the future. For example, putting excessive pressure on employees to meet the target can cause increased employee turnover. The managers should establish a healthy discussion with the members whenever a new issue appears during the process (Pollack and Pollack 2015). This means the employees should know the reasons of any issue or challenge.

Application of System Theory in Change Management

The manager needs to develop a unity among the members –Gemma, Paul, Dan, Sophie and James to work together as a team. When working together as a team, the find manger finds it easy to identify the weaknesses and fill the gap by sharing responsibilities among the members.

Forming vision and strategy: The manager of team 1 needs to develop the core values of their plan such as serving people (customers) by giving them a more enhanced customer service or form an achievable vision.

Communicating vision: Through a managerial communication, the manager needs communicate vision of change and the vision should be aligned with training, performance review (Hornstein 2015). The manager needs to make sure each member in the group know the vision of change.

Removing obstacles: In this step, the manager needs to ensure operational processes as well as the structure are in place and it is aligned with the overall organizational vision. For example, Fizz’s vision is to serve people by building a loyal client relationship and providing clients with high quality event service. Similarly, the vision of team 1, should be about developing enriching relationship with the clients.

Creating short-term wins- Under a newly developed structure at Fizz, to motivate employees in performing their responsibilities, short-term goals should be developed. For example, members should be given a short-term target of approaching above 60 clients in 21 days, where at least 50 clients should take the event service from Fizz. Achievement of this goal should be treated as a short-term win. The manager should reward each among the five members in team 1.

Consolidating gains: The manager should focus on achieving continuous improvement by analyzing the success stories (Gorran Farkas 2013). For example, on every weekend, the manager needs to tell the stories of previous success to the members. Overall performance of the team can be improved by specializing the individual excellence of a member recorded in the previous achievement.

Anchoring change in the corporate culture: Hence, the manager should play the role of discussing success stories on every appeared opportunity. This practice motivates employees for event. 

According to the case study provided, the scenario of the team members in team indicates that each individual is having a unique quality, which can be applied to achieve the desired performance of the team (Love et al. 2014).  Following are some of the steps to make team 1 an ready for achieving the goals.

Middle Management and Its Role

The manager needs to build an effective relationship with the team members so that the members can trust on leaders’ judgment. Even the members will work effectively when the leader is not around. Thus, to build an effective leadership, the manager could apply the following leadership style- transformational leadership

Transformational leadership: In this particular leadership style, the manager and group members follow a process where both the manager and members raise each other to a great level of morality and motivation. The manager has to develop a model of fairness and integrity. This means, the manager should not be partial towards any particular member of the team; he/she should give an equal priority (Tourish2013). For example, if the manager talks too much with Gemma in the workplace, other members could be offended. So, even in general, if the manager wants to spend time with member, he/she should do the same with others too. The manager should create clear goals and high expectation but this should not be stressful to the employees. During the work process, there could be many situations where members may feel stressed; hence, the manager should play the role of motivating the members. The manager needs to provide adequate support to its employees and encourage them for their every achievement.  In addition to this, manager should give example about how employee in workplace looks beyond their self-interest. As a leader, the manager needs to inspire its members to reach the impossible point.

Develop relationship between group members: Communication is certainly a significant step for team improvement. The manager needs to ensure that when the team starts cooperating, the leader needs to monitor the way the employees work together as well as implement steps to enhance interaction with each other. As mentioned by Kark and Shamir (2013), communication helps to build trust and cooperation in the team. If a proper communication is established, when the conflicts arrives, the manager can easily resolve them. For example, a disagreement occurs between two members in the team, the manager needs to listen to both sides of the argument and take actions as a mediator.

Foster teamwork: When the manager develops relation with the members, it is the responsibility of the manager to help them work together and effectively. The leader should encourage the team members to share and exchange information among themselves.

The strength of the case study is, organization is looking forward to make a positive difference in its operation, which would help to maximize the growth and productivity with respect to finance and strategic position. However, the case can be negatively affected, as the financial budget and the job responsibilities of the teams under newly developed structure is largely extensive. This might not be a smooth and simple plan for manager to achieve.

Practical Example of Change Management

Even though the case provides a clear scenario, requiring change but the change plan requires more initiatives. In order to implement the above-mentioned plan, the senior management team has to be involved in the process. To make the change effective, and to avoid resistance, the senior management team has to extend their involvement by communicating with the members of each team on a very frequent basis. The budget is limited and job responsibilities are extending; thereby, managers are required to motivate employees by showing more involvement to achieve the goals.

According to Clarke, Hope-Hailey and Kelliher (2007) the role or performance of middle managers are usually unseen but they play a very significant and emotion work as the part of their role, especially in the change context. It is often observed that due to communication gap between employees and upper-level or senior managers, it is difficult for senior managers to understand the issues of employees in the below or lower level.  However, the involvement of middle manager with employees is excessively higher compared to the involvement of upper level of managers (Langley et al. 2013).  Therefore, as part of senior management team, an employee could discuss the issues or challenges he/she faces in the workplace with the middle managers. Hence, the middle managers communicate the issues further with the upper-level upper level managers. Based on the identification, the senior managers of the team will take actions to resolve the issues. When the actions are implemented, the middle managers should take feedback from the employee about the actions applied or whether the issue is resolve properly. Likewise, the feedback should be further sent to the senior managers of the team.

Thus, it can be implemented that middle managers play the significant role in identifying issues. For example, if Paul in Team 1 faces an issue that he is not receiving appropriate client contacts in the allocated client base provided by Fizz. Middle managers here tend to supervise the work of members in the group; thereby, Paul could discuss the issue occurred due to system error with the middle manager. Now, the middle manager looks into Paul’s system and looks into the issue and if it is not solved by middle manager, he/she will further escalate the issue to the senior manager of the team. Here, senior manager will develop the solution and implement them accordingly. Few days after the implementation, the middle manager will take feedback from Paul whether he is receiving appropriate client contacts.

Market Analysis and Identification of Areas for Change

As put forward by Clarke, Hope-Hailey and Kelliher (2007) emotional reactions to change are found to be a general reactions to the real as well as perceived interruption that help to accompany the change in the organization. Thereby, the managers should know that understanding and identifying the mixed emotions that group members in the organization could experience help members to feel active, motivated as well as committed to achieve their organizational goals.

This assessment module revolves around the implementation of change management, especially focusing on how change can be applied to organizational context.  The report revolves around the change in the management from the organizational perspective. Different theories and models of change management have been evaluated and their applications have been provided with examples. The module helps to understand how the limitations in the change management theories and models can be treated by modifying the core principles of the theories. For example, the system theory discussed in the report contains certain limitations, which as discussed in the report, can be tackled by paying attention to both internal and external environment of the organization. The module helps to me understand how change can effectively be implemented in an unorganized and scattered workforce –such as the scenario of Fizz event management helps to learn how a manager of a team can apply change such as building new team by integrating employees with different skills and professional background. Kortter’s eight-step model of change helps to understand how change can be applied to gain the ultimate outcome without any delay or failure in the middle.

Moreover, the change plan developed for Fizz event management helps to understand the role of a middle manager in the change implemented process. This particular piece of work helps me to understand how an employee being part of the team can help the middle manager in implementing the change process.  The overall discussion on change management helps to understand that change is certain to take place; thereby, it is responsibility of the managers, supervisors or senior management to develop the mindset of its workforce in way that employees remain ware of the fact that change can take place at any time. When change occurs in one particular area of the organization it can affect the entire organizational structure if the organization does not have proper planning for the desired change. For example, the system theory discussed in the report helps to understand that theory is effective for applying change in the organization but the theory does not talk about how the coordination between the internal and external organizational environment can be developed. 

Open System Theory and its Principles

Reference and Bibliography 

Ahearne, M., Lam, S.K. and Kraus, F., 2014. Performance impact of middle managers’ adaptive strategy implementation: The role of social capital. Strategic Management Journal, 35(1), pp.68-87.

Cameron, E. and Green, M., 2015. Making sense of change management: A complete guide to the models, tools and techniques of organizational change. Kogan Page Publishers.

Clarke, C., Hope-Hailey, V. and Kelliher, C., 2007. Being real or really being someone else?: Change, managers and emotion work. European Management Journal, 25(2), pp.92-103.

Gorran Farkas, M., 2013. Building and sustaining a culture of assessment: best practices for change leadership. Reference services review, 41(1), pp.13-31.

Hornstein, H.A., 2015. The integration of project management and organizational change management is now a necessity. International Journal of Project Management, 33(2), pp.291-298.

Hornstein, H.A., 2015. The integration of project management and organizational change management is now a necessity. International Journal of Project Management, 33(2), pp.291-298.

Hornstein, H.A., 2015. The integration of project management and organizational change management is now a necessity. International Journal of Project Management, 33(2), pp.291-298.

Kark, R. and Shamir, B., 2013. The dual effect of transformational leadership: Priming relational and collective selves and further effects on followers. In Transformational and Charismatic Leadership: The Road Ahead 10th Anniversary Edition (pp. 77-101). Emerald Group Publishing Limited.

Kuipers, B.S., Higgs, M., Kickert, W., Tummers, L., Grandia, J. and Van der Voet, J., 2014. The management of change in public organizations: A literature review. Public administration, 92(1), pp.1-20.

Langley, A.N.N., Smallman, C., Tsoukas, H. and Van de Ven, A.H., 2013. Process studies of change in organization and management: Unveiling temporality, activity, and flow. Academy of Management Journal, 56(1), pp.1-13.

Love, P.E., Matthews, J., Simpson, I., Hill, A. and Olatunji, O.A., 2014. A benefits realization management building information modeling framework for asset owners. Automation in construction, 37, pp.1-10.

Morgeson, F.P., Mitchell, T.R. and Liu, D., 2015. Event system theory: An event-oriented approach to the organizational sciences. Academy of Management Review, 40(4), pp.515-537.

Pollack, J. and Pollack, R., 2015. Using Kotter’s eight stage process to manage an organisational change program: Presentation and practice. Systemic Practice and Action Research, 28(1), pp.51-66.

Rice, A.L. ed., 2013. The enterprise and its environment: A system theory of management organization (Vol. 10). Routledge.

Rice, A.L. ed., 2013. The enterprise and its environment: A system theory of management organization (Vol. 10). Routledge.

Sharma, G. and Good, D., 2013. The work of middle managers: Sensemaking and sensegiving for creating positive social change. The Journal of Applied Behavioral Science, 49(1), pp.95-122.

Steigenberger, N., 2015. Emotions in sensemaking: a change management perspective. Journal of Organizational Change Management, 28(3), pp.432-451.

Teulier, R. and Rouleau, L., 2013. Middle managers’ sensemaking and interorganizational change initiation: Translation spaces and editing practices. Journal of Change Management, 13(3), pp.308-337.

Too, E.G. and Weaver, P., 2014. The management of project management: A conceptual framework for project governance. International Journal of Project Management, 32(8), pp.1382-1394.

Tourish, D., 2013. The dark side of transformational leadership: A critical perspective. Development and Learning in Organizations, 28(1).

Y?lmaz, D. and K?l?ço?lu, G., 2013. Resistance to change and ways of reducing resistance in educational organizations. European journal of research on education, 1(1), pp.14-21.

Zamir, Z., Sahar, A. and Zafar, F., 2014. Strategic alliances; A comparative analysis of successful alliances in large and medium scale enterprises around the world. Educational Research International, 3(1), pp.25-39.

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