Organizational Change Management For Cost-Effective Approaches

Case Background

Describe about the Organizational Change Management for Cost-Effective Approaches.

This report looks at the problems in the departments of the school and cost-effective approaches to providing high-quality learning experiences for the students in the school. The report also looks at the distribution of tasks within the departments and the competence of those appointed with different tasks in the institution. The report will provide ways in improving ways of integrating the three departments to provide a more united front in tackling issues identified. The report also introduces the idea of creating a new undergraduate degree program that combines economics with inputs from the other two departments. This report will provide a budget plan that will eliminate the school deficit and improve the school’s research performance.

The business school was created three years ago as the outcome of a university-wide exercise to restructure the university to improve the overall ranking of the university. Three departments were joined to form the business school namely; Economics, the Accounting and Finance and Management Studies.  The head of the Department of Economics was replaced just four weeks ago. The Economics department has the least number of staff followed by the Accounting and Finance department and finally the Management Studies Department. The Economics department also has the least overall number of students followed by the Accounting and Finance department and then the Management Studies Department which has the highest number of students. The overall annual deficit is $192K most of which is contributed by the Economics Department which has a deficit of $750K. The largest surplus contributor is the Management Studies Department which has a surplus of $636K. The Accounting and Finance department has the highest number of research active staff even with international reputations whereas the Economics department has the least with a staggering 2 being the only ones recognized as research active. The biggest receiver of external research grants in terms of total annual value is the Management Studies Department although the Accounting and Finance department is the one with the largest number of granters.

Problem identification

The report shall begin by identifying the problems in each of the three departments in the school. The first case study shall be the school of Economics. The school is plagued with some problems. The members have an unrealistically high opinion of themselves. The reputation they had was built by distinguished scholars most of whom either retired or moved on. The remaining long-serving members are now old and less productive. A high proportion of the staff has been promoted to senior grades regardless of the fact that only two members of the entire staff have retained an international reputation in their field (Cummings and Worley, 2014).

Analysis

The department did little to prepare for the university’s teaching quality and student support review and contributed to the business school’s poor overall score in the review. They relied on their long-established informal practices for managing teaching and student affairs which did not meet quality assurance requirements. Their poor score killed the other two departments’ morale. The numbers enrolled in the Master’s degree have constantly dropped for the past years from 15 to only 8 in the current session. The department also has the lowest number of students in the undergraduate program. Research-wise, the department also had only 2 out of 7 have a strong record of publishing in top rank international journals.

The second department is the Accounting and Finance department. The contact between the staff in this department and those in other parts of the business school is relatively little. Regarding research and teaching, this department is doing well therefore the problem we will majorly be addressing here is the inter-departmental relationship.

The third department is the Management Studies Department which is the largest of the three departments. It also includes three sub-divisions; marketing, organization behavior and operations management. The staff is generally being demotivated by the feeling their success is being exploited by the rest of the business school to manage the deficit created by the Economics department and to fund new appointments in Accounting and Finance. Regarding research, some of the staff members are motivated and competent but due to the time they have to devote to teaching, they have insufficient time to publish all of their work.

The Kurt Lewin’s change model begins with unfreezing an organization (Ben, Dunphy, and Griffiths, 2014). This involves reducing/stopping the maintenance of the current situation. It involves changing the existing mind set and showing people the need for change. (Mitchell, 2013). This is usually done by presenting a provocative problem to the people to show them how urgent the need for change is. The key to this step of unfreezing is communication (Burnes and Cooke, 2013)

The Economics department staff members need to be shown that at the current annual deficit to income rate, the department will drive the university into a financial situation that could take years to recover from. Furthermore, they need to see that the only way the enrollment number into the Undergraduate, Masters and Doctoral programs will increase is if the members increase their performance in research and gain recognition by other economists. Their current disregard to procedure and the university’s approach to quality assurance is also a trend that can no longer continue. Their current teaching practices have proven ineffective and could be the cause of dwindling numbers in the enrollment numbers in the Master’s department.

Problem identification

The Accounting and Finance department members need to be shown that without their cooperation with staff members from the other departments in the school, the overall performance of the school will remain stagnant.

The Management Studies department staff should be made to realize that if they are the only ones able to manage the deficit generated by the Economics department, they will be burnt out and therefore need to share their skill and expertise among the member staff of the other two departments to be at the same pace. They also need to realize that as long as the other departments are lagging behind, there should be no reason to get excited about their achievements since they will be ranked as an entire business school and not a department. This will help them see the need to work as one unit with a united front.

Lines of communication between staff members and organizational heads need to remain open and honest to create a sense of trust and security in all those involved with the proposed change (Shirey, 2013). Round table discussions need to be held in individual departments and also between the major stakeholders and departmental heads to tease out the restraining forces that have to be overcome (Jones, 2010). The restraining forces in this case might be the older staff members who might insist on the maintenance of the old methods due to the safety it provides. Another restraining force would be the lack of trust among members of different departments (Manchester et al., 2013)

Transitioning

In this stage, new behaviors and attitudes are developed through organizational structure and process changes (Bamberg, 2013). There may be a period in which a lot of confusion will emerge. The process can be long and it takes time for people to feel comfortable and start taking actions that support the change (Thomas, Sargent and Hardy, 2011). First of all, the Economics department needs to reduce the amount of salary that is paid to the staff considering that its staff is the most highly paid (see below figures), but the lowest performing.

1030/10=103 $K (Per staff member in Economics department)

1176/14=84 $K (Per staff member in the Accounting and Finance department)                                 

1344/16=84 $K (Per staff member in the Management Studies Department)

This means that the Economics department staff are paid 22.6% more than the staff in the other two departments (see below figures).

Problem Analysis and Justification

103-84=19

(19/84)*100% =22.6%

The salaries should be rationalized and standardized so that they are paid equally as the rest of the staff. Those promoted to senior grades will be compensated by other methods for example having their research funded by some of the money from the grants. This therefore means that the total salary bill for the Economics department will decrease to 840 $K and the new total costs will be 1040 $K (See figures below).

84 * 10 = 840 $K

840 + 200 = 1040 $K

The remaining six long-serving members should be allowed to retire and let younger and more proactive members join the team. The new team will be at an even better position to take up the university’s approach to quality assurance. There should be a University based award introduced to appreciate the research done by the staff that receives top international ranking and recognition (Fallik, 2013). This will in turn motivate the members of the Economics staff to increase their aggressiveness towards research. These changes should see the number of enrollment in the Undergraduate program increase from 82 to around 150 next year. The number of enrollment in the Master’s program is also set to increase to around 12 whereas the Doctoral is set to increase to about 5. The total enrollment number will be at 167 which is 85% more than the previous. This will then increase the total departmental income by 85% too (see figures below).

82+8=90

150+12+5=167

(167-90)/90 * 100% = 85%

This will therefore increase the total departmental income minus research grants to 888 $K which will effectively change the surplus-deficit to 152 $K which is a decrease of the surplus-deficit by 79.7 %.

185/100 * 480=888

1040 – 888 =152 $K

750 – 152 = 598

(598/750)/750 * 100 = 79.7%

An inter-departmental meeting should be held on a weekly basis to keep the staff members at par with the vision. In this meeting, a report should be given by each of the departments on the progress towards the mission. Here, the staff is meant to motivate each other and learn from each other. The Management Studies department being the most successful should share tips on how to stay focused and assist in the implementation of the plans (Palmer, Dunford and Akin, 2009).

Cost effective methods of providing high-quality learning experiences such as e-learning should be introduced. An example of this would be to provide certain journals on e-learning cites accessible to all students rather than make printouts and thousands of copies which are only necessary for a  short period.

Solutions

The roles of admissions, examining, timetabling and other aspects of teaching administration should be equally assigned to the support staff. These roles shall be handed over from the members of the staff and a training period of one week dedicated to passing over the roles to the support staff (Ruona and Choi, 2010).

Lastly, it would be a good idea to create a new degree program that combines economics with inputs from the other two departments. A market analysis will have to be done to know the demand and requirements for the sustenance of such a program (Crawford and Nahmias, 2011). Also, research should be done on the credibility or accreditation possibility of such a course by the relevant government bodies that deal with the legality of such matters.

Once the structures and strategies seem okay, efforts turn into locking them in (Oreg, Vakola, and Armenakis). This can be achieved by creating a reward system to motivate the members to stick to the new values and plans (Sherer and Spillane, 2011). Regular review meetings are to be held with the new staff support and the department heads and major stakeholders including those who hold posts crucial to the long-term implementation of the changes (Graetz and Smith, 2010). The training of certain groups such as the support staff and the Economics and the Accounting and Finance by Management Studies on the areas they excelled in should be maintained and the mentors to oversee that the necessary skills have been acquired (Griffin and Moorhead, 2011).

Conclusion

Clearly, there is a lot of effort and work required to change the current situation of the school and not only clear the annual deficit but generate enough income to create a profit margin for development. However, with the strategies and projections discussed in this report, the school should experience a net growth of around 80% in the next few years and clear all outstanding balances. It is however imperative that the determination and morale to effect the change be constant throughout the process.

Rationalize salaries with keen interest in the Economics department.

Hold inter-departmental meetings.

Employ younger and more proactive members to the Economics department.

Encourage publishing of research by staff to increase recognition as a University and encourage larger enrollment numbers.

References

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