Public Service Electric and Gas - Essay Example

?Case Study Table of Contents Case Study Table of Contents 2 Introduction 3 Reason for Change 3 Organisational Design Issue 4 Cultural Factors 6 Impact of Various Stakeholders in the Change Process 7 Strategies for Transforming Culture 8 Implication of Management and Leadership Style on Change 12 Impact of Contrasting Personality 14 Challenges Faced By PSE&G 16 Recommendations for Success of PSE&G 17 Conclusion 18 References 20 Bibliography 22 Introduction The essay will represent organisational change in one of the public companies of New Jersey named Public Service Electric and Gas (PSE&G). Organisational change is the implementation of new thoughts and activities by a company. Organisational change is important in the sense that it can increase the efficiency of employees by achieving the goals. There are numerous challenges for change in organisation culture. To make the change successful, there is need to focus on developing association with stakeholders and unions. Organisations need to commence appropriate change program for successful change (Sengupta & Bhattacharya, 2006). The essay will describe the change in safety culture of PSE&G. PSE&G had faced several challenges in order to administer changes in safety culture. It was a long changing process which resulted in success. Reason for Change The change in safety measures of PSE&G had started in the year 1999 by virtue of cultural change. The reason for the change is to ensure safety of employees of PSE&G. It has almost 6500 employees and 32 factories. PSE&G had encountered recordable accident rates and loss of working days because of safety. In the year 2005, according to the Occupational Safety and Health Administration (OSHA), the loss of working days had become 0.33 by the year 2007 (Simon & Cistaro, 2009). The following table shows the employees injury rate of PSE&G from 2001–2007: Source: (Simon & Cistaro, 2009). Organisational Design Issue The major design problem an organisation often confronts is the selection of horizontal differentiation and vertical differentiation which let organisation to manage the actions of employees for accomplishing the objectives. The following are major design issues that can be faced by an organisation: Source: (Jones & Mathew, 2008). Vertical Differentiation: Vertical differentiation is the method of forming the hierarchy of power and develops reporting connection to connect organisational job with organizational units. It helps to manage the actions and enhance the capability to develop a value of any organization through establishing the allocation of power (Jones & Mathew, 2008) Horizontal Differentiation: Horizontal differentiation helps an individual to be specialised and be more dynamic. However, this type of delineation hinders the communication between divisions or units and averts people to learn from one another. As a consequence of horizontal differentiation, people of different units create a propensity to see one’s job strictly from the perception of the time structure, objective and interpersonal course of other’s unit. When different jobs are viewed differently, communication becomes unsuccessful and coordination fails between units (Jones & Mathew, 2008) In cultural change, PSE&G had faced problem of matching the ‘Standardization and Mutual Adjustment’ issue. In every organisation there are certain regulations, SOPs (Standard Operating Procedures), traditional values and standards which specify how an employee can carry out the organisational task. In PSE&G, the employees were engaged in performing job according to their own rule and they tended to take risks. Besides, there were also communication issues which had occurred from vertical differentiation. Thus, there was need for better interaction between management and the union to resolve the differentiation problem in cultural change process (Jones & Mathew, 2008) Cultural Factors The apt organisational culture can result in better employee performance. Organisational culture is vital for accomplishing competitive advantage and thus, in achieving commercial achievement. In PSE&G, the cultural change had faced various problems because of dissimilar subcultures. Every subculture has its own requirements and thus it was difficult to apply safety programs in the whole company. The cultural change was designed according to long-term plans. The program for change was continued for 9 years by transforming the culture from community to community and from ethnic group to ethnic group that can match each individual subculture (Simon & Cistaro, 2009). Change in any organisation can be of two kinds; the one is ‘Incremental change’ and the other one is ‘Transformational change’. In case of incremental change, a company transforms the culture by existing standard and organisational custom. As this kind of change is based on existing standard, the changes become inadequate and it can cause strategic drift and the drift may go on as long as the company changes the degree demanded by changes in the surroundings. Incremental Change Transformational Change Proactive Tuning Planned Transformation Reactive Adaptation Forced Transformation Source: (Hunt & Simms, 2005). In case of change in PSE&G, it was transformational change as the change program was planned and this kind of change cannot be managed within existing organisational standards or schedules. PSE&G was compelled to implement the change for the sake of safety of employees. Impact of Various Stakeholders in the Change Process Cultural change without involving the stakeholders is meaningless. The stakeholders must be influenced by a persuasive vision rather than forced in a coercive technique. An organisation should make them realise the overwhelming reason behind the planned changes that it is going to create. The more stakeholders are associated towards the vision of organisation, the more it will be simple for the organisation to change. Cultural change means shifting the method of performing any task to new method. The employees require seeing and performing tasks from several perceptions. Every culture has its own positive and negative aspects. An organisation should retain trust of stakeholders to ensure that they are not in danger. It is beneficial to provide training about the characteristics of new culture. Only planning the change program and recording the necessary actions for accomplishing change are not enough, an organisation needs to be very imaginative to perform things in different manners and needs to be trained from people outside the organisation (Cameron & Green, 2004). In the cultural change of PSE&G, all senior managers, employees and unions had participated jointly. The front line supervisor and senior manager had represented as a leader in the change program. Strategies for Transforming Culture There are two major strategies for making change in any organisation; the one is ‘Top-down’ strategy and the other one is ‘Bottom–up’ strategy. The ‘Top-down’ strategy is also known as planned transformation and usually begins from the top level and ‘Bottom–up’ strategy is incremental where transformation begins from bottom and spreads through the whole organisation. In both approaches, it is important that employees deliver the required performance for successful change (Thornhill & Et. Al., 2000). Top–down Approach: In the Top-down approach, the transformation is commenced by senior executives. Senior executives depend mainly on human capital to administer the cultural change. Various human resource development programs are applied in this method to develop the performance of employees. This method generally concentrates on the procedure of change rather than recognising the problem of organisation and subsequent requirement of change. There are certain arguments about planned transformation that it often fails because of lack of synchronisation, lack of commitment and insufficient competency. There are three disadvantages of ‘Top-down’ approach. First is the communication of plan. To certain extent, this approach is self-sufficient and usually expressed by highly bureaucratic way such as team meeting or training program Secondly, the change process towards new culture is often thought as duty of new leader which might be challenging Thirdly, if the changes adopted by senior management are dissonant with employees feeling of actuality about new culture, the change can become suspicious near employees Thus, in certain cases, the human resource involvement is improper for supervising culture change, but they can be useful if changes are applied in an integrative way (Thornhill & Et. Al., 2000). Bottom–up Approach: Unlike planned method of change in top-down approach, ‘Bottom–up approach’ is quite successful. In this method, the senior executives focus on organisation’s problems. It is the duty of senior management to identify the way and establish an atmosphere of change. Bottom-up Approach Source: (Thornhill & Et. Al., 2000). In the change process of PSE&G, both, the ‘top-down approach’ and the ‘bottom-up approach’ had been followed. The new system includes 19 constituents which signify major characteristics of safety culture. The new culture was functioned in two levels, one is Local Safety Council (LSC) which comprises of employees and managers and another one is Line of Business Council (LOB) which comprises of upper management. The Chairperson in every aspect is drawn from bottom level i.e. employees and front managers. The new culture highlighted the pledge of full involvement of employees in the safety procedure. The approach of change had occurred on the basis of developing a strong safety culture where every level of organization can be engaged. The senior executives and union had signed the safety commitment declaration for real obligation. There was need to develop vision with regard to existing culture and present as well as future requirement for change (Simon & Cistaro, 2009). In the two locations of the organisation, the plan for change process had displayed to demonstrate about the change procedure. One program had been commenced in ‘New Brunswick Gas’ where connection between union and management is strong and other program had initiated in ‘Central Electric Division’ where accident and disagreement is frequent. Before initiating the change program, there were numerous cultural issues in the ‘Central Electric Division’. In order to initiate joint involvement of each party, workshop had been established to recognise the fundamental assumption that caused the cultural issues. The workshop had generated positive result, thus eight additional sessions had been arranged in the year 2000. The change process in successful locations had established an outline that acted as a model and applied in other locations of PSE&G (Simon & Cistaro, 2009). Training has been provided for transformation of culture. Leaders had been developed at the supervisory level for change process. The cultural change is a long-term procedure where only models are not enough. There is need for strong structure where leader can supervise the change from existing culture to the culture change for future (Simon & Cistaro, 2009). The outcome of first phase of culture change was evaluated and there was remarkable development since the formation and acceptance of new culture in PSE&G. The following graph shows the reduction of loss time rate over the period of implementing new safety culture in PSE&G (Simon & Cistaro, 2009). Source: (Simon & Cistaro, 2009). In the second phase, a ‘Utility–Wide Vision’ had been developed. The new culture in PSE&G had been recognised which includes pride, caring, faith and belief. Six sub teams had been developed where each team concentrates on one essential element of the safety culture which is measurement, communication, faith, guidance, knowledge sharing and recognising the missing aspect. The result is the establishment of genuine and constant safety culture throughout PSE&G (Simon & Cistaro, 2009). Implication of Management and Leadership Style on Change In order to make the change successful, an organisation must choose the right leadership style. Efficient leadership in change management is significant because only an effectual leader can manipulate, stimulate and facilitate other employees to contribute towards the change. As PSE&G was trying to accomplish large change in the organization, it was quite significant to choose the correct leadership style. Leadership style is related with every kind of change in organisation. For example, in case of transformational change there is need for transformational leadership. The following figure shows the leadership style and its relation with kinds of changes. Style of Change Management Source: (Senior & Fleming, 2009). The above diagram shows that management techniques can be useful in all kinds of change in organisation. According to the study by Dunphy and Stace the ‘Directive or Coercive’ leadership style is appropriate in case of transformational change. In case of additional change in organisation, the consultative leadership style is appropriate as these kinds of change are connected with eco-friendly forces for transformation that is quite expectable and of reasonable strength (Senior & Fleming, 2009). In PSE&G, consultative leadership style had been followed as the change was eco-friendly i.e. to guarantee the protection of employees. The change starts with mutual union and management benchmarking team. It highlighted the obligation to full contribution of employees in the change process. The new structure addressed the involvement of all layer in PSE&G. The leadership style had changed from ‘command and control’ to a hybrid style with ordinary control and support from management. As the union was allowed to share the leadership the pledge of the change became more powerful (Simon & Cistaro, 2009). Impact of Contrasting Personality With regard to impact of personality over the culture change in organisation the ‘Five Factor Model’ (FFM) of personality is very useful. The FFM theory is generally tagged as five personalities which are: Source: (Vakola & Et. Al., 2003). Neuroticism is the tendency to understand negative impact of any change such as nervousness, uncertainty and emotional distress. Extraversion is the extent of interpersonal communication and degree of action of a person. ‘Openness to Experience’ is described as the aspect of looking for practical experience and admiration of new experiences. Agreeableness is the superiority of a person’s interpersonal communication ranges from sympathy to rivalry. And finally, Conscientiousness is the degree of perseverance, association and inspiration in goal-oriented performance (Vakola & Et. Al., 2003). The above factors have been recognised across various customs and drastically dissimilar languages which can impact on the change process. The contrasting personality towards organisational change relies on a person’s ‘change schemata’. It is also known as ‘Mental Map’ which symbolises knowledge formation about the aspects of change and association between different change measures. There are vital connection between the ‘schemata’ and response of a person towards change. The most important factor is that those above FFM factors can significantly be affected by the character of any individual (Vakola & Et. Al., 2003). In case of PSE&G, the Neuroticism had vital affect in the change process. Traditionally, the cultural standard of PSE&G was to take risk for completion of any task. The employees were quite reluctant about the change and thus it resulted in loss of many working hours and there was delay in change. The negative perception towards the change process of employees had made the duration culture program quite long i.e. 9 years. PSE&G had to empower the employees and the unions in the change process, for adapting the change and for involvement of employees (Simon & Cistaro, 2009). Challenges Faced By PSE&G The main challenge faced by PSE&G was the participation of employees. PSE&G had lack of safety minded supervisors and professionals. The employee participation in the safety was also quite low. This is the most significant factor that the supervisors or professionals must act as a coach. They should analyse the employees and direct them towards accepting safety culture. In the primary phase, safety culture did not produce necessary results and many employees were getting injured since they did not consider themselves as an element of safety program. Employees are the backbone of any cultural change because they can accept or neglect the safety program and consequently the culture change. PSE&G should understand at the outset that every employee will not understand the change in culture; they would prefer to perform as they have been for many years. Organisation’s action towards them can decide how the change program is viewed by the other employees. The best solution for this problem is providing training. Through training, employees can admit that risky practices can injure someone (Brown, 2010). Recommendations for Success of PSE&G Thus, the problems can be managed more effectively if a similar change has been introduced in other organisation. There was lack of communication problem in PSE&G which had made the change process difficult and time consuming. As this is a multicultural organisation, the sense of understanding is not equal and the employees of PSE&G should know about the safety concerns. At the primary phase, PSE&G was unable to develop a vision for the change, thus it can be more effective if PSE&G trains the supervisors and professionals to act as a coach and provide direction about safety. The major factors for a successful safety culture are the responsiveness, power and responsibility. For every safety culture, the managers must take care of their position as a profession. The safety culture should be stated correctly. The notion of safety culture is top–down approach where management support is evident. Safety culture is created with the vision and objectives of an organisation and a promise of management and means of employees to obtain possession of safety culture. Conclusion For implementing any change a company can face difficulties. Thus, it is important for management to address the issue in relation to the need for change and involve the stakeholders as much as possible to bring the change. Whether change is being planned for positive or harmful motive, the future accomplishment depends on involving the unions to participate in the new method of performing job. It is important to make the stakeholders understand about the way the changes can provide advantage to them. In case of PSE&G, it faces several political and cultural factors in the change process. In the year 1999, the ‘Central Electric Division’ of PSE&G had faced several issues regarding union and management. There was lack of trust and doubts prevailed between the union and the management. The employees at times reported false injury to confuse the management. The employees tended to perform their activities according to their own way which brought difficulties for managers. The main social factors which PSE&G faced were tribe problems. Every region has its own ethnic group and within each ethnic group there was several sub tribes and they perform according to their own regulations by avoiding the safety measures. The employee involvement in safety was less (Simon & Cistaro, 2009). PSE&G was familiar that union involvement is quite necessary to establish the change in safety from the beginning. The synergy and reciprocity entrenched in common faith and admiration among every party (management, union and stakeholder) is the secret to make any large change successful. Regardless of the social and cultural factors, PSE&G had maintained good relationship between organisation and union through mutual attempt on quality and legislative program. References Brown, B. A., 2010. A Successful Safety Culture. The Compass, Volume 9, Number 2. [Online] Available at: http://www.syska.com/cms/docs/articles/Compass_brown_1209.pdf [Accessed July 27, 2011]. Cameron, E. & Green, M., 2004. Making Sense of Change Management: A Complete Guide to the Models, Tools & Techniques of Organizational Change. Kogan Page Publishers. Hunt, M. S. & Simms, H., 2005. Organisational Behaviour and Change Management. Select Knowledge Limited. Jones, G. R. & Mathew, M., 2008. Organizational Theory, Design, And Change. Pearson Education India. Sengupta, N. & Bhattacharya, M. S., 2006.Managing Change In Organizations. PHI Learning Pvt. Ltd. Senior, B., & Fleming, J., 2009. Organizational Change. Pearson Education India. Simon, S. I. & Cistaro, P. A., 2009. Transforming Safety Culture. Safety Management. [Online] Available at: http://www.culturechange.com/PSEGApr2009.pdf [Accessed July 27, 2011]. Thornhill, A. & Et. Al., 2000. Managing Change: A Human Resource Strategy Approach. Pearson Education India. Vakola, M. & Et. Al., 2003. The Role of Emotional Intelligence and Personality Variables on Attitudes Toward Organizational Change. Journal of managerial Psychology, Vol 19 No 2. [Online] Available at: http://www.dmst.aueb.gr/nikolaou/Papers/Personality_EQ_change%20Paper.pdf [Accessed July 27, 2011]. Bibliography Kotter, J. P., 1990. A Force For Change: How Leadership Differs From Management. New York: Free Press. Kotter, J. & Schlesinger, L., 1991. Choosing Strategies for Change. Harvard Business Review. Stogdill, R. M., 1974. Handbook Of Leadership: A Survey Of Theory And Research. New York: Free Press.   Read More