Addressing Change Resistance And Conflict Management In Innovative Clothing Design (ICD)

Change Resistance in ICD

Based on the analysis of the given case, it can be understood that the organization in question, Innovative Clothing Design (ICD), is experiencing a resistance towards change. Change resistance implies the emotional anxiety and distress which individuals experience in response to a transformation or change in the workplace (Schulz-Knappe et al., 2019). This is observed in the case of the Production Manager (PM) who is reluctant of the recruitment of the Sales and Marketing Manager (SMM) due to the latter’s knowledge and tendency to push for change in the organization in the form of investing in new technology, online marketing and catering to high end customers. There exist a number of reasons why employees within an organization may be resistant to change. These include: absence of confidence or a sense of mistrust towards the change, feelings of emotional distress and anxiety towards the change, the need to follow erratic or unrealistic timelines to achieve the change or the lack of adequate communication from leaders and managers regarding the change (Cinite & Duxbury, 2018). In the case of the organization ICD, it can be observed that the PM is resistant to change due to a lack of confidence towards new technology in comparison to the existing traditional production methods which they follow. The PM also seems to not be confident and is anxious towards the change suggested by the SMM since they are associated with high cost and a high level of risk. The following framework by Kubler and Ross provides an interesting insight into the various stages of change resistance which ICD is encountering or may be encountering in the future (Tarnoff et al., 2021; Rosenbaum et al., 2018; Castillo et al., 2018):

1. Shock Phase: In this phase, individuals usually feel overwhelmed at the thought of the change and thus may not demonstrate an adequate response to the same. In such instances, managers or employers may feel that the employers have accepted the change. This is observed in the employees of the ICD who are too repressed to express anything about the change and thus, is perceived by the PM as being opposed to change.
2. Negative Phase: This is characterized by a phase of denial towards the change. This is observed in the case of the PM who feels reluctant and refuses to believe in the need to engage in change.
3. Phase of Wrath: This is characterized by a sense of frustration and anger towards the change. While this phase has not been demonstrated in ICD yet, it can be observed in the case of the Pm who constantly partakes in conflict with the SMM due to the change.
4. Phase of Negotiation: This is when individuals have not yet accepted the change and thus find ways to avoid it. This is likely to be seen in the form of absenteeism and avoidance in employees if change is implemented in the ICD.
5. Phase of Depression: This is characterized by a stage when employees have not fully accepted the change but rather feel depressed about it.
6. Phase of Test: This is when resistance appears to be resolved in response to the change. If change is implemented in ICD, this can occur in the form of employees and the managers collaborating with each other to overcome change resistance by setting small goals.
7. Phase of Acceptance: This is when employees and managers work together to identify possible strategies by which can adapt to the change for long term in the workplace.

The next problem or issue which ICD is experiencing, as identified from the analysis of the case is the mismanagement and lack of resolution of conflict between the PM and the SMM. Conflict is common in the workplace and occurs mostly due to a lack of understanding and harmony between the opinions held by one or more parties in the organization. In this case, it observed that the Managing Director (MD) has to constantly arbitrate in the conflict between the PM and the SMM (Seward et al., 2019). Even though the SMM has raised valuable insights into the strategies needed for changing, the MD is unable to arrive at a solution due to lack of funds and high risks involved. The MD’s stance on this conflict is similar to that of a compromising style where both parties are satisfied by being given only a partial solution without any concrete advice on collaborating or collectively resolving any problems (Hann, Nash & Heery, 2019).

Based on the case analysis, it can be stated that ICD is experiencing problems in terms of a lack of innovation and inadequate sales leading to financial losses. Such problems are common in the context of small scale businesses which target a niche marketing sector and have a limited workforce. This is observed in the case of ICD where not only is the workforce very limited but the organization overall targets a very small group of consumers for their products – such as clothing of council catering for schools and other local public institutions (Mukherjee, 2018). Additionally, small scale businesses also fail to raise adequate revenue due to the absence of an entrepreneurial mind-set. In terms of business psychology, an entrepreneurial mind-set is a set of processes, beliefs, perspectives and worldviews which influences entrepreneurial behavioural. Small scale organizations like that of ICD also fail to strategically function and generate revenue due to the absence of an adequate strategic leader who would empower and guide staff in the achievement of strategic organizational objectives respectively (Daspit et al., 2021). In the case of ICD it is evident that not only are they catering to a small and limited target group with no innovation, but they are also devoid of any entrepreneur or strategic leader who can empower and guide the staff.

Reasons for Change Resistance

The following are the possible recommendations which ICD can implement to overcome each of their problems, using context and theories of leadership, motivation and business psychology.

As mentioned previously, one of the most concerning problems experienced by ICD in the moment is the prevalence of change resistance towards the operational and innovation changes suggested by the SMM. While there are many theories and models providing recommendations on overcoming change resistance, one of the most comprehensive and frequently used change model is that of Kotter’s 8 Step Change Model (Laig & Abocejo, 2021). The model was developed first by John Kotter – an internationally known change expert and professor at Harvard Business School – during 1995 in the book ‘Leading Change’. It is however worthwhile to know that this change model relies greatly on a top down approach and thus, managers must ensure that opinions of employees are also considered when establishing a change vision (Galli, 2019). The following are eight steps based on this theoretical model, which ICD can apply to overcome resistance towards change (Galli, 2018; Harrison et al., 2021; Weiss & Li, 2020; Orr, 2021):

1. Creating Urgency: This is characterized by motivating employees on the importance of the change by instilling in them a sense of urgency regarding it. In this stage, it is recommended that the MD and other managers of ICD educate employees on the potential consequences if new strategies of innovation are not implemented – as well as the potential ways by which they can overcome.
2. Forming Powerful Coalitions: This comprises of convincing employees that change is important by recruiting leaders who can empower them towards change. For ICD, it is recommended that the MD higher the SMM or other senior employees who are passionate about the change and can lead people to achieve the goals required to achieve it.
3. Creation of a Change Vision: This stage is characterized by developing a vision and strategy of the change which employees can grasp and follow. It is recommended that the MD collaborate with other leaders such as the SMM to develop a vision, goals and strategy for the change against which employees can be guided.
4. Communication of the Vision: This comprises of constantly communicating and integrating the change in daily operations as a means of generating long term commitment towards it. In the ICD, it is recommended that the SMM and MD constantly communicate this vision using training and group meetings to cement a sense of change in the mind-set of employees.
5. Removal of Obstacles: This comprises of removing any barriers which are disrupting change implementation. For the ICD, it is recommended that the MD and SMM consult with the PM and other employees who are resistant to the change and educate them on its importance. Additionally, a loan can be taken or certain operations can be outsourced to collect funds for the change.
6. Creating Short Term Wins: This includes developing short term goals which are achievable and can instil a sense of motivation in employees. In ICD, this can be done by setting a short term goal of creating social media accounts and innovative advertisements which employees can prepare for business promotion.
7. Building on the Change: In this change, long term change must be achieved by constant evaluation. In the ICD, it can be done by the MD dividing the change process into phases and evaluating the achievements and losses of each phase of change for future improvement.
8. Anchoring Changes in a Corporate Culture: This is when the change is finally established in organizational culture. In the ICD, the MD can sustain such changes by constantly discussing on how far employees have progressed on the change vision and also by rewarding employees who have demonstrated exceptional compliance to the change.

It is observed that there lie a constant conflict between the PM and the SMM regarding the need to implement change and innovation in the organization. The Thomas-Kilmann Conflict Mode Instrument (TKI) provides an interesting insight into the five types of conflict management which are used by organizations and also their pros and cons (Vasilopoulos et al., 2018). It was introduced by Ralph H. Kilmann and Kenneth W. Thomas in 1974 and comprises of the following styles (Vasilopoulos et al., 2018; Kolesnichenko et al., 2019):

1. Competing Style: This is characterized by one party being constantly uncooperative and assertive towards the needs of the other party. This is seen in the PM who refuses to acknowledge the change strategies suggested by the SMM. This style must be avoided since it impairs workplace relationships as seen in ICD.
2. Avoiding Style: This is when one party remains completely uncooperative and merely allows the other to receive their needs as a means of avoiding the situation. This must be avoided by ICD since it does not resolve actual business conflict.
3. Accommodating Style: This is when one party sacrifices their needs for the other. This style must also be avoided by ICD since it often indicates weakness and a risk of being taken advantage of.
4. Competing Style: The MD’s stance on this conflict is similar to that of a compromising style where both parties are satisfied by being given only a partial solution without any concrete advice on collaborating or collectively resolving any problems.
5. Collaborating Style: This is the style which the MD must encourage the PM and SMM to adopt. It involves both parties being assertive for their needs but choosing to work together as a means of identifying a solution which can best suit the organization.

There exist a number of theorists who have postulated the qualities of a strategic leader and having an entrepreneurial mind-set which can be useful for ICD. For instance, according to management consultant Peter Drucker and economist Frank Knight, one of the many qualities of an entrepreneur is risk taking. It is characterized by the ability of an entrepreneur to implement change and take risks at the cost of theory profession and financial security (Ramadani et al., 2020). This form of risk taking is seen in the SMM who is willing to exercise change despite the risks involve. It is thus recommended that ICD recruit a leader who can direct the organization with such risk taking behaviour. Another characteristic of an entrepreneur is transformational leadership which was first introduced by James MacGregor Burns in 1978 (Kuratko et al., 2021). It is characterized by how leaders constantly motivate employees and inspire them to continuously innovate and improve the quality of their performance. In terms of business psychology, such leaders also demonstrate the personality trait of extraversion – meaning that they constantly communicate and enquire employees’ ideas towards change and innovation. Thus, ICD needs a leader who is not only innovative but also, willing to empower employees to raise concerns about their ideas of strategic change (Kooskora, 2021).

A SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis is strategic management tool which can assist organizations to understand how their internal resources and operations compare with the external environment (Benzaghta et al., 2021). The following SWOT analysis of ICD provide an extensive overview regarding psychological aspects of emotional distress, employment issues such as lack of career opportunities for employees and the absence of innovation in an uncertain market, can result in the mismanagement and strategic downfall of ICD (Table 1).

Kubler and Ross’ Framework for Change Resistance

Table 1: SWOT Analysis of ICD (Source: Created by the Author)

Based on the theoretical models explored, the following interventions have been proposed for ICD to overcome their existing problems:

1. It is first important that the organization overcomes conflict with regards to change management. This can be done in the form of the MD negotiating with the PM and SMM where both can peacefully share their understanding on the current situation and work towards a solution which will be beneficial for the both of them and also the long term viability of the company. If the MD is unable to adopt a collaborative style of conflict resolution, then a negotiator or third party consultant can be hired who will provide the PM and SMM an understand regarding the strengths, limitations and consequences of their diverse views (Harrington, 2018).
2. Employees are likely to demonstrate a sense of resistance towards the change – as observed in their tendency to remain silent. This must be addressed to prevent barriers of innovation in the future. Using Kotter’s eight step change model, this can be overcome by educating employees on the importance of change, the vision or strategy which they can follow and short term goals of change which can be empowered to achieve (Erciyes, 2018).
3. The Covid-19 pandemic has resulted in consumer’s preferring retail services with a high turnover and which operate online. ICD will need to expand upon their business by providing online platforms from where customers can buy and access greater their products. Online platforms will also expand the company’s reach to a larger customer pool resulting in greater sales and revenue (Almeida et al., 2020).
4. The Covid-19 pandemic has also greatly changed customer needs and demographics. Customers of various ages and cultures – especially those in the high income group – are willing to invest in traditional embroidery. Expanding their customer group instead of only local council run catering operations would pave the way for better revenue and reach for ICD (Almeida et al., 2020).
5. Employees are likely to demonstrate a sense of resistance to change especially because there are no career development opportunities and growth for them to pursue outside the industry. To address the same, it is important that ICD not only provide internal training opportunities but also employee referrals to placements and certificate courses which can expand upon their skills and enhance motivation in the organization (Schweiger et al., 2018).
6. ICD is in lack of a leader with a risk taking, entrepreneurial mind-set who can motivate employees towards change and innovation. While the SMM demonstrates some forms of such mind-set, the lack of experience and skill can impair the quality of performance in the organization. ICD can either recruit a change agent or leader or even train the SMM to further enhance skills and competencies in directing change in the organization (Pidduck et al., 2021).
7. The lack of adequate financial resources is a major barrier towards change. To address the same, ICD can obtain a loan or apply for grants to external agencies such as non-profit organizations and the government who provide support for small scale organizations. Additionally, the organization can also outsource some of their non-profitable operations to third party stakeholders as a means of controlling costs (Morozko et al., 2018).

Based on the proposed interventions, the following are the recommended actions which ICD must undertake:

1. Immediately resolve conflict between the PM and SMM using a collaborative style of negotiation and agree on a strategy for change.
2. Develop and implement a strategic plan for change and innovation in the organization within the next 1 to 3 weeks based on employee consultation.
3. Acquire business loans for investing in digital and online technology for improved production and advertisement processes within the next 6 to 12 months.
4. Expand product portfolio and customer demographic based on market surveys within the next 6 to 12 months.
5. Implement training and recruitment strategies to assist employees in overcoming resistance and hire change leaders who can drive change and innovation in the organization within the next 6 to 12 months.

This paper provides an extensive discussion on ICD – an organization which prepares and provides clothing for catering establishments run by the local council. Due to their small sized workforce and absence of innovation, the organization is experiencing financial losses. Interventions such as change management, leadership and training can pave the way for innovation and sustainability of the business amidst a growing competitive market due to Covid-19. 

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