Phases of Organizational Change
Question:
Discuss about the Change In Organizational Structure Of Pilkington.
Pilkington is a world-renowned glass manufacturer. It produces high-end products of glass with supreme quality and is famous for that reason. Use of glass has increased with themodernization of architecture. Buildings are covered with glass panes and all the windows are completely made of high-quality glass of different sizes, shades, and strength. It can be observed that the corporate culture of offices has promoted the use of glass in building construction both on the exterior side of the structure and mainly to decorate the interior. Pilkington is known to be going through a transition phase in its organization. Since it focuses on three domains which are corporate, building and automotive it has a lot of variations in its organization. Change in organizational structure of Pilkington has been in three phases (Solouki, 2017). The first phase was triggered by the change in Australian policy of wage.To implement these changes, second phase of change occurred. The third phase was to completely change the structure of the organization to adopt the changes made in the first and the second phase. In the following business report we will discuss and analyze some questions related to change in organizational structure of Pilkington.
It was observed that during the decade of 1980 Pilkington enjoyed acomplete monopoly over the entire Australia in the business of glass and its products. It was the leading manufacturer and aced all its competitors. But with thepassage of time, Pilkington faced environmental changes and organizational changes both at the same time (Kim &Zhong, 2017). These two factors collectively brought organizational change in the management of Pilkington (B.M. Keers, C. van Fenema&Zijm, 2017). To elaborate these changes, it can be said thatcompetition in international market triggered the need for a change. There was a rise in competition from countries like India, China and Germany got a chance to sell their products due to the reduction in import duties caused by General Agreement on Tariffs and Trade on a global level. Since the manufacturing cost of glass in these countrieswas less Pilkington had huge difficulty in matching the international price levels. Some internal reasons were also there which convinced the management of Pilkington to make changes in its organization (B.M. Keers, C. van Fenema&Zijm, 2017). Pilkington had a major part of its workforce to be in the age bracket of 45 to 50 years which is considered as old in the manufacturing business. These workers were used to traditional methods of expected overtime payment and easy going work methods. These overtime payments computed to be around 70% of the entire payroll in many of its departments. This was an added expense which Pilkington has to bear with not much output derived from it. Then Pilkington management thought this through that this kind of practice should not continue if they have to manufacture “World class Glass”. So these factors collectively demanded an organizational change.
Reasons for Organizational Change
Pilkington desired to change the entire organizational structure by redesigning theformal structure.This change was initiated by the flow of information in the management from lower levels to the upper executive level. The traditional method was that managers used to convey the information to their subordinates (Kim &Zhong, 2017). Being a manufacturing unit, the input from shop floor to the higher management is more valuable and appropriate as they know each and every detail about the current issues which they face during production (Gerbec, 2017). This majorly reduced the conflict of opinion in the organization. There was aradical change in the process of production (Sarkar &Osiyevskyy, 2017). Individual workers were replaced by ateam of employees who will be collectively responsible for the jobs they are assigned. This was done to enhance the participation among workers. The work done in the organization will not be monitored by individuals of the management but by the teams of workers and also by the team members themselves.Change in theinternational structure was doneto maintain the harmony in theworkforce of Pilkington’s organization. Programmed of training for the employees of Pilkington was arranged to make them learn new methods and technologies of manufacturing and make them multi-skilled.Lastly, theintroduction of new work practices to change the environment of the organization (Wadhwani, Galvez-Behar, Mercelis&Guagnini, 2017). Remuneration systemwas introduced to eradicate barriers and restrictions in the organization. The main focus of the Pilkington was to bring change in the international business structure to stay in the competitionin glass manufacturing.These changes made by Pilkington are the main reasons for the success of change in the organization.
The problemin the organization of Pilkington is fundamentally related to the working culture. Another problem is about the structure of the organization. Since Pilkington was practicing the old and trusted hierarchal structure of a manufacturing organization in which the top management took all the big decisions (Wadhwani, Galvez-Behar, Mercelis&Guagnini, 2017). These pronouncements included the performance standards, targets of manufacturing, quality of the products and marketing strategy. These decisions were transferred from the top level of management to the lower ranks of officials who further channeled them towards the floor level workers. There was anonly downward flow of information and the communication was very limited. The lower rank employees who worked on real jobs of manufacturing felt that they are being instructed and theory inputs are of no use. It was not certain that the officials at the top management knew everything about the workings of shop floor and technical details of glass manufacturing. This gave rise to a conflict in the minds of workers and they believed the management to be autocratic. Moreover, manufacturing companies are prone to worker union versus management tussle which always exists at the lower levels of the organization. This type of mentality in the workforce tarnishes the efficiency of work among the employees and a sense of dissatisfaction always exists in their minds (Pádár, Pataki &Sebestyén, 2017). Pilkington had an old aged workforce which was comfortable with the working methods which existed previously and were reluctant to change. This created a huge problem in organizational change and for modifying the structure of Pilkington management.
Challenges Faced during Organizational Change
Any organization grows by the dint of motivation among its workers. Pilkington has to go through the same process and believe in the same philosophy to implement the change in its organization successfully.Motivation is defined as the inner drive of an employee or the work of an external factor which makes him work more to benefit the organization and reward the worker as well (Sitzmann& Bell, 2017). Motivation is a phenomenon by which any organization taken collectively gives reasons to its employees to work harder and to be more committed towards their work in the organization (Lin, Chen & Su, 2017). In the case of Pilkington, the sense of motivation was missing and that too for bringing about a change in the organizational structure. Pilkington was willing to re-create its organizational structure which was only possible when the employees were willing to change their mentality and approach towards their work. Employees of Pilkington had a slow tendency towards work which procrastinated the entire manufacturing procedure.Due to this sluggish working culture, the system of overtime payment existed (Pádár, Pataki &Sebestyén, 2017). This system affected the revenue of Pilkington badly and a change was utterly needed. Pilkington had to pay them more money to get the same job done which was to be completed within the normal working hours. Many workers who were in a habit of taking overtime payment put pressure on the workers who resisted such a practice. The individual pressure was put to ignore the change management was willing to make as those employees were getting monetary benefits out of it. This proved to be a major hassle in context of motivating other employees to complete their work in time.
As discussed above the workers of Pilkington did not want to bring about any change in the current working structure of the organization. They were very reluctant and tried a lot to maintain the status quo of Pilkington organizational structure. There are reasons to why employees of any organization resist change. The reasons justify their mentality and approach towards work commitment (Lee et al., 2017). These reasons are hindrances in smooth implementation of changes which Pilkington needs to overcome. Identification of reasons forresistance was done to find out some aspects such as:
Things a change comprise of:Re-structuring the organization, consolidation of positions, firing workers, forfeiting the project and putting aholdon ongoing projects.
Impact of change:Change effects the employees but it also modifies the position of stakeholders in the company (Lee, Sharif, Scandura& Kim, 2017). The reshuffling of workers through projects can also happen.
Motivation and Organizational Change
Fear of theunknown:When the change is implemented without giving ample time to the workers to think it through and adopt the changes this type of resistance occurs.
Mistrust: If the lower level workforce does not trust the higher level officials then any changes made by the organization has to face a sense of mistrust (Queen & Hess, 2017). Workers feel that these changes are made to harm them and to benefit the top level of management.
Job Security:When an organization announces changes of downside nature it reflects that workers will be laid off from the company’s payroll. The workers start feeling a threat to their job security and resist to the changes.
Pilkington introduced the changes gradually keeping in mind all the possible reasons for resistance. The management also started employee training programs to upgrade the working skills of its workers so that they get motivated towards their job and try to be more committed towards their work (Queen & Hess, 2017).
Pilkington made changes in its organizational structure in the phases which took a duration of two years. This was the most strategic move to bring changes in its organization keeping all the factors of organizational change in mind (Reimer &Houmanfar, 2017). The first phase started in the month of November 1994 in which Pilkington implemented a new configuration of information flow and process of production. It applied the bottom-up approach where the shop floor workers gave inputs to the top management about the changes necessary at the lower levels (Weick, 2017). The flow of communication was reversed which proved to be beneficial or Pilkington. Another change was in the process of production where teams were formed to perform certain tasks and collective responsibility was given rather than the previous method of individual jobs (Ma & Kay, 2017).
The second phase was implemented in November 1995 which was done to fine-tune the changes made in the first phase. Changing the structure of international business methods was done by Pilkington in the second phase. To maintain its stand in the international business Pilkington started employee training programs to equip workers with new skillset.
Third and the last phase of change came about in December 1996. Pilkington was suffering from loss caused due to strikes. The reason ofstrike was due to the nature of changes Pilkington was going to make in its organization which included the fundamental change in theenvironmentof work and change in remuneration system.
Resistance to Organizational Change
Conclusion
Change in the structure of any organization is a challenging task.It becomes difficult to modify or to completely alter the pre-existing structure of an organization. But to maintain a positive growth rate and to thrive in the changing environment and culture of work on global level changes need to be implemented. Pilkington being a leading glass manufacturer has to undergo some changes in its organizational structure as the previous one was incurring aloss to its revenue. To go through the phase of organizational change and that too successfully Pilkington has to identify its requirements of change first and implement it slowly. There are many hindrances and restrictions which crop up once changes start to implement. Tackling these issues becomes a priority job for the organization as the entire change process depends on it. In the above report, all the details of organizational change specific to Pilkington have been discussed in details. Analysis of factors of change, phases of change, therequirement of motivating the employees and reasons of resistance to change are done.It can be concluded that Pilkington has by far been successful in bringing the change in its organizational structure and maintain its position of leading glass manufacturer.
References
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