Analysis of Organizational Change

Executive Summary 

Diversity in the workplace is an aspect that reflects the commitment of a company to tolerance and equity. Crescent Petroleum is faced with the challenge of ensuring that there is such diversity in the company. This calls for deliberate and concerted efforts that direct the company towards diversity.  The company’s operations in UAE need reorganization to absorb more locals and ensure that there is conformity with the legal requirements. 

To ensure that the same has been achieved, the company need to embrace communication as well as holistic decision-making processes. The company need to display and exercise caution in the process to ensure that it does not fail in the process. To ensure success, the company need to approach the change process as a project which should be allocated the necessary resources.

Table of Contents

Executive Summary 1

Introduction 3

Background to the Situation of the Change 4

Literature review 5

Change Management and Project Management 5

Can Change Management be Improved? 6

How Effective has Change Management been? 7

Diagnosis of the Change 8

Availability of better opportunities in the public sector 8

Compliance with government regulations 9

Employees 9

Investors 10

Implementing the Change 10

Conflict in Change Management 11

Ethical Issues during Organisational Change 11

Conclusions and Recommendations 12

References 14

Introduction

Leaders and managers both, have the responsibilities of carving organizational change in accordance to the urgency of the same. The discussion of leadership and change has attracted the attention of scholars and change management experts in a bid to provide solutions to the aggravating problems orchestrated by the process of change. To properly address the problem, a clear understanding of the source of the problem needs to be identified and analyzed. In this paper, the source touches on government, employees, investors, and opportunities stemming from the public sector. 

Crescent Petroleum is a private oil company operating majorly in the Middle East and North Africa (MENA) regions. In the UAE especially, there has been a show of disinterest among the locals (Emiratis) to get jobs with private establishments and instead preferring to work with the government. This status has worried the government and as such, the government has been adamant that private companies must have local people as part of its workforce composition. To make good its threat, the government imposed quotas and tougher laws governing foreigners seeking work in UAE. This proposition by the government has forced Crescent Petroleum to instigate an organizational change where it wants to have locals blended into all levels of the workforce. This has presented a problem. Locals, are not ready to work at some levels which are deemed lowly. There is need to look at how they can be incorporated into these jobs. 

This paper has thus conducted an analysis of the problem and has come up with recommendations of how the organizational change can be instituted in the smoothest way possible.  

Background to the Situation of the Change

The Arab business world has its own set of rules, especially if the rules touch on internal operations. On this case, there exists a huge problem when it comes to employees. In a typical organization, there are two groups of employees; locals and non-locals (expatriates). Expatriates can either fit the white color jobs or the blue color jobs. The organizational change problem that the CEO of Crescent Petroleum wants advice on how he can persuade locals to partake blue color jobs as well as accept to integrate with other employees who are expatriates in nature and are working as blue color employees. According to Rees and Althakkhri (2008 p.124-125), locals have an appetite for jobs in the public sector rather than the private sector. This is despite efforts by the government to encourage locals to join the private sector. The private sector on the other hand is in no mood to employ locals and is in the opinion of employing expatriates. The argument for the preference of expatriates is that the they are more disciplined thus easy to manage, they are inexpensive, and they don’t mind manual and technical jobs which are numerous (Rees and Althakkhri, 2008, p.125). According to the CEO, locals, in black and white, avoid social integration in a set up assuming a multinational workforce in a bid to maintain a high social status, the same view has been observed by Rees et al. (2007). Another peculiar thing that the CEO and Rees and Althakkhri (2008 p.125) observe is that locals have a higher rating for social and cultural features which drive them away from manual and technical assignments. The refusal by locals to integrate with expatriates has a negative social implication on the expatriates as they see the jobs they do as a punishment since everybody else doesn’t want to be associates with, something that the CEO denies. 

Literature review

This section will look at change management with regards to what has been analyzed and put on paper by scholars before. The paper has been organized in such a way that evaluates the importance of change management and how it can be used constructively. The second part looks at how change management can be improved using communication while the third part looks at how effective change management has been over time. 

Change Management and Project Management 

Change management is a critical subject that makes managers curious about how they can handle the challenge with accurate and enhanced results. Hornstein (2015, p.291), evaluated how change management and project management can be integrated and made a success. Project outcomes have been the primary preoccupation of a majority of managers as enumerated by Hornstein (2015, p.291), and thus the notable refusal or assumption of change management. It has been a primary concern for research to identify how project success can be achieved without caring how the same can be used as a tool for change; strategic change thus remains to be a notorious business problem with which focus on processes and results cannot solve (Hornstein, 2015, p.291). 

To incorporate change management, it has been suggested that projects be viewed as organizational change initiatives. Change is a constant factor that haunts a firm forever and as such, the need to have structures that identify areas that will attract change as well as identify structures that will manage the changes required to achieve organizational objectives is paramount. Despite the glaring differences between project management and change management, both are dependent as well as complementary in the making of projects successes. Project success is no longer a one faced aspect but multidimensional extending its reach to change management. Change management is therefore integral to project execution right from initiation to monitoring and evaluation (Hornstein, 2015, p.295). A hands-on approach has been suggested as more practical rather than an issue of delegation especially by managers as recommended by Griffith and Kings (2007, p. 18). Griffith and Kings (2007, p.18), faults common understanding of change management is a function of the human resource and adds that it is a four-step process; HR planning, acquisition of team members, development of such members and finally team management. 

Can Change Management be Improved?

Matos and Esposito (2014, p.324-341), has furthered the discussion of how change management can be improved. The role of communication and its influence on influencing resistance to change. Communication is not just a tool for achieving change management but also a technique. Communication has been cited as capable of reducing resistance to change at the individual level by making it possible to re-elaborate meanings (Matos and Esposito, 2014, p.328). This is achievable since where communication is allowed to be a dialogic interaction. Communication is an intricate and complex procedure especially when tied to change management due to the need to create sense-making and sense giving simultaneously thus making the communication to flow in the intended direction (Matos and Esposito, 2014, p.328). Resistance to change does not just have a negative connotation tied to it. Resistance to change has been linked to more enhanced probability for successful delivery of change management as described by Ford and Ford (2009, p.103). During resistance, managers need to rise and take control of the direction of communication and dialogues and as such, overcome resistance through the bringing of both protagonists to the same level of understanding (Matos and Esposito, 2014, p.328). 

Resistance to change is an attitude that breeds a behavior. There are different types of resistance to change and as such, various types of attitudes. Trust on both sides of communication is necessary to ensure that change management can be enhanced. To achieve success, with communication, protagonists need to cultivate trust which should be followed by constructive communication which should successfully influence positively the concept of change acceptance Ford and Ford (2009, 105). With trust, there will be authentic participation which is based on trust. Matos and Esposito (2014, p.332), come to the confession that the link between resistance and change has received minimal research work and recommend that future work should focus on extending the contexts already studied. 

How Effective has Change Management been?

Does change management always work? Ashkenas (2013) and Worley and Mohrman (2014), have an answer to the question, though not in the affirmative. It has been established that 70% of change management efforts are futile despite the concept being in existence for more than 50 years (Ashkenas, 2013, p. 1 and Worley and Mohrman, 2014 p. 214). The understanding that change management is not a so easy concept to implement is overwhelming. The main reasons that are given by Worley and Mohrman, (2014, p. 215), include the application of traditional change models which are highly dependent on the bureaucratic leadership models, and strictly controlled communications. Environmental changes have become more stealth and disruptions are often showing up even during moments of calm pointing to the need for a continuous change management need which should be banked on the ability to infuse new capabilities that are a response to the sophisticated environments. Focus on the future is critical.   

Given the statistics above, it is clear that the information we possess about change management is potentially wrong. As observed earlier, it remains disturbing that change management has been left as a sole function of the Human Resource department. Managers are keen to delegate the functions to the HR rather than accepting accountability as managers (Ashkenas, 2013, p. 1), who goes further to describe three critical questions that a potentially successful change management manager should ask during the beginning. First, are resources for managing change ready? Resources, in this case, include framework, and tools. Second, to what level are plans for change infused to the overall plans? Third and final, who takes the blame and credit for successful or unsuccessful implementation of change management. 

From the literature review above, it has been established that change management is not an easy task that managers can fumble with and come-up with a solution. Change management is a hard problem that has attracted hordes of viewers. Change is inevitable. This review has offered. The concept of bringing change management and project management together has been addressed as well as how to work on resistance aimed at undertakings by the company can be worked on. 

Diagnosis of the Change

The following factors might be contributing to organizational change problem. 

Availability of better opportunities in the public sector

In UAE, there is a high preference for jobs in the public sector by the locals. With the current economic growth and an economy largely dominated by the public sector, it follows that the government generates more jobs, which apparently pay more that the private sector. As indicated by Rees and Althakkhri (2008 p.125), it is difficult for expatriates to penetrate the public sector making locals have great opportunities. The public sector is also attractive since locals don’t have to worry about being integrated with non-locals in their work. 

Compliance with government regulations

The government is a force that cannot be assumed in business operations. The government has enacted laws that make it difficult for companies to bring in expatriates. Two prominent implications of the such laws is the imposition of quotas and high work permit fees (Rees and Althakkhri, 2008 p.125) Such laws impose quotas on private companies and as such, private companies must be innovative enough to attract local talent on the wake of quotas which reduce the scope of the company in getting employees. Quotas leave companies with little or no option but absorbing locals. The other thing that the government has done to discourage expatriates is imposing high fees for working permits. As such, expatriates working in low caliber jobs find it hard to comply with such laws.  

Employees 

The employees can carry a fair share of the blame for the perpetuation of the problem. It is them who have created classes among themselves and that class that they consider lowly is frowned upon. A corrective measure is mostly likely bound to drag employees out of their comfort zones. It can be confidently said that a change process is bound to create a “people issue.” The process of change will create the need for tolerance and understanding. People will get restless for the simple reason of not knowing how they will be affected. Morale and results are hence put at risk of both the expatriate community and that of locals who are likely to end up in the blue color job group. To counter the adverse effects of the human side in change management, all people should be fully integrated into every step of the process starting from design, implementation, evaluation and above all, decision making (Hornstein, 2015). 

Investors

If there is poor workmanship in an organization, there is a likelihood that there will be poor output which consequently reduces the earnings by the investors. It is therefore imperative that the workforce be motivated enough rather than have a poorly constituted workforce which will deliver poor results. Investors are also concerned when the company and the management get into logger heads with the government over non-observance of rules and regulations since their investments stand the risk of being rendered redundant simply by poor workforce composition.

Implementing the Change

The change process in this case is a difficult undertaking that requires campaigning to the locals that their input is needed by the company and at the same time, ensuring the expatriates that their interests are taken care of. Maintaining that balance is not an easy task. One probable outcome is that the locals might ask for higher salaries that the non-locals which might spark a conflict with the owners since the move is likely to eat into their profits. If implemented in that format, there is a likelihood that the non-locals might site discrimination and attract the authorities. To implement the change, the management of the organization need to come to terms that there is a conflict that can only be solved by getting everybody into the bus. Communication and holistic decision making is necessary in ensuring that the interests of everyone are listened to and considered before making a decision. It is important for the management to be aware that during the implementation of such a change, there will be conflicts and ethical issues that will need to be addressed. Such conflicts and ethical issues are discussed here below. 

Conflict in Change Management

Employees (locals) might clash with the management over the issue of pay, opportunities, and working conditions. The picture that might be painted is that of local employees wanting the highest pay with the least amount of work. Management, on the other hand, wants to maximize returns to investors by reducing costs associated with employees. As such, issues like strikes and litigation of the company by workers unions might be clashing zones. Employee resistance is the major cause of conflict, and it requires a sincere and sober mind to address. 

The investors might propose to management things related to employee management that are not practical, and the management might refute and get into the clashing zone with investors. Mujtaba and McCartney (2009), have noted that working on conflicts often calls for an assumption of softer stands on conflicting sides, accepting that compromises are necessary as well as learning to control pressure occasioned by the change and conflicts. Employees have a right to be well remunerated while at the same time taking orders and instructions from management while management has a right to stand for what they believe is good for the firm and investors.

Ethical Issues during Organisational Change 

The basic understanding that employees are human beings whose output is subject to many factors the main one being the treatment they receive from their leaders is critical in enforcing ethical behaviour during change. It is therefore fair and prudent for the management of Crescent Petroleum to understand what kind of leadership will motivate all employees as well as get the employees working in harmony. Business leaders need to assume leadership styles that allow employees to be productive. Overriding their rights in pursuit of profits might not go down well. Burners (2009), ethical behaviour that is socially responsible is paramount. He further argues that being in defiance of ethics might lead to the prioritization of profits and self-interest rather than overall responsibility to the employees, investors, and authorities which might create more problems in the future. 

Conclusions and Recommendations

There is an imminent need for Crescent Petroleum to come up with a program that allows people, local or otherwise to work more collaboratively for their betterment and that of the company. A diverse workforce is something that is more admirable and reflective of the commitment of the company to care, ethics, and responsibility. The management is therefore faced with tough choices that leave the company with little or no options but to have the workforce diversified more equitably across all the levels. One of the important considerations for the company is to develop a proper change management plan. The plan must be objective as well as be handled professionally to ensure that there is the least conflict, and maximum positive impact. Some of the recommendations for a smooth incorporation of workers into the workforce. The following are the recommendations of this paper;

1. Ensure that there is effective, efficient, and objective communication to all employees as well as the prospective employees regarding the position of the company on the issue of the diversifying the workforce across all levels. A two-way communication set up should be encouraged to ensure that the management gets the feelings of the workers. This was evident in the literature review.
2. The decision-making process regarding the change should be holistic. Employees at all levels should be considered as well as their views. This is likely to reduce resistance.  
3. Crescent Petroleum should view the change process as a project and treat is as such complete with a project manager and the necessary resources. 
4. Continually review the change process to check for deviations and take corrective action. The literature review established that majority of change processes fail. It is, therefore, important to have the process under close monitoring to ensure success. 
5. The company should take advantage of government initiatives and maximize the advantages outlined in such initiatives. For instance, joining the Emiratization Partners Club (Khaleej Times, 2017 ). 

References

Ashkenas, R., 2013. Change management needs to change. Harvard Business Review, 16.

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.

Griffith, B., King, K., 2007. The partnership between project management and organizational change: integrating change management with change leadership. Perform. Improv. 46 (1), 14 – 20  

Khaleej Times . Private firms in UAE to get fee discounts, other privileges for hiring locals. 2017. <https://www.khaleejtimes.com/news/government/Private-firms-in-UAE-to-get-fee-discounts,-other-privileges-for-hiring-locals-Cancel-Save-Save-%26-Close>.

Matos Marques Simoes, P. and Esposito, M., 2014. Improving change management: How communication nature influences resistance to change. Journal of Management Development, 33(4), pp.324-341.

Rees, C.J. and Althakhri, R., 2008. Organizational change strategies in the Arab region: A review of critical factors. Journal of Business Economics and Management, 9(2), pp.123-132.

Rees, C.J., Mamman, A. and Braik, A.B., 2007. Emiratization as a strategic HRM change initiative: case study evidence from a UAE petroleum company. The International Journal of Human Resource Management, 18(1), pp.33-53.
Worley, C.G. and Mohrman, S.A., 2014. Is change management obsolete? Organizational Dynamics, 43(3), pp.214-224.