Change and Innovation as Portrayed by Regional Sludge Treatment Centre (RSTC) - Essay Example

Change and Innovation – the case of Regional Sludge Treatment Centre (RSTC Introduction One of the most challenging tasks for firms that operate within the modern market has been the alignment of the organizational policies and targets with the market’s trends. In most cases, it is necessary that a firm’s strategies are carefully reviewed in order to ensure that the targets set by the management team will be achieved (or else that the policies adapted by the firm will be viable in the long term). Current paper examines the knowledge management policies applied on a specific firm, the Regional Sludge Treatment Centre. The specific firm has been established after the implementation of the 1991 EU directive – which is related with the reject of sea as a disposal area. It has to be noticed that the establishment of the above firm was initially considered as absolutely necessary taken into consideration the needs of the particular British region (greater Northeast area). When the specific plant was put in action, a series of problems appeared particularly regarding the methods used for the appropriate process of the all waste material directed towards the particular plant for process and disposal to the environment. At a first level, it seems that the strategies developed by the firm have been appropriately designed and applied; however, still there are certain issues to be reviewed, like the effectiveness of the firm’s structure – in accordance with the targets set by the firm’s managers. The choice of the knowledge management systems used by the firm’s managers could be also criticized as being only partially develop – many of its aspects are still not appropriately highlighted and they cannot be used for the development of the firm’s strategic plan. The use of Robbin’s model for the evaluation of the appropriateness of organizational culture in the case of the specific firm has been found to be a potential solution regarding the identification of the problems related with the daily operational activities of the particular firm. 2. Literature Review – knowledge available in modern organization The identification and the administration of knowledge within the business environment can be appropriately planned only if the characteristics and the needs of each particular firm are taken into consideration. In this context, the prior exploration of the business – and the market – environment is necessary in order to develop appropriate plans of action regarding the retrieval, the process and the distribution of knowledge within any modern organization. At a first level, it is necessary to identify the type of knowledge required for a specific firm. Towards this direction, it was noticed by Anand et al. (2003, 15) that ‘the knowledge possessed by an organization and its members can be classified as explicit or tacit; explicit knowledge can be codified and communicated without much difficulty while tacit knowledge--such as the manner of operating sensitive equipment or interpersonal skills--is not so easily articulated’. In accordance with the above, the methods adopted by a particular organization for the retrieval and the administration of knowledge will vary in accordance with the type of business activities, the firm’s strength to respond to the needs (in terms of finance) of its various projects as well as the position of its competitors. In many cases, changes will be possibly required in order for specific corporate targets to be achieved. It should also be noticed that the retrieval of knowledge is only the primary part of the relevant effort. The above view was supported by Bendler et al. (2001, 8) who claimed that ‘knowledge has become the pre-eminent production factor, and it needs as much careful, conscious management as its traditional counterparts’. In accordance with the above, modern organizations should develop the necessary strategies regarding the retrieval and the process of knowledge. This issue was extensively examined by Steyn (2004, 615) who supported that ‘knowledge management enables organisations to improve efficiency and effectiveness mainly by decoding tacit knowledge into explicit information’; In any case it should be noticed that ‘knowledge is not detached from the people, processes, or infrastructure of an organization and its network’ (Chatzkel, 2003, 3). In fact, knowledge management is based on people (employees) of each specific organization; only if appropriately policies for the handling of knowledge by the firm’s employees the effectiveness of a firm’s knowledge management can be ensured. On the other hand, the aspects of knowledge can be different across organizations – even referring to employees of a specific organization. Regarding the specific issue it was noticed by Buckley et al. (2004, 371) that ‘our view of knowledge is that it is the converse of uncertainty; uncertainty inhibits the ability of firms to create value by limiting the scope and effectiveness of the activities they undertake’. In accordance with the above, it is quite possible that the knowledge management system adapted by a particular organization should be carefully reviewed in terms of its appropriateness for the specific organization; alternative plans of action should be available in any case. For this reason, it was noticed by Wright (2001, 15) that all firms that seek ‘to develop truly sustainable competitive advantage in the knowledge economy, they need to capture, catalog, transfer, and institutionalize knowledge that precludes peoples daily actions’. Another issue that should be highlighted is the fact that knowledge is not an ‘autonomous’ organizational element. Other factors that contribute to the development of the firm around the world should be also taken into consideration when having to design and apply a specific organizational strategy (social and cultural characteristics of the targeted market and review of all organizational plans should be reviewed in order to decide on their progress and their, possibly, cancellation). The level at which internal and external communication has been developed is crucial regarding the effectiveness of the organizational policies. In fact, it has been suggested by Moore (1995, 143) that ‘what is strategic in the communication is not that it is designed to be manipulative, but instead that it is designed to advance particular policies or organizational strategies by making them comprehensible’. Communication – internal and external – is just one part of the organizational context. There is a series of issues that should be carefully reviewed by a firm’s managers when deciding on the type and the structure of a particular organizational plan. Kesler (2000) has referred to four specific elements of organizational activity that they are crucial for the development of the firm within its market. These elements are: ‘1. Finance, 2. Process, 3. Offering and 4. Delivery’ (Kesler, 2000, 26). All these elements should be considered by the firm’s managers when designing and applying the various business plans; however, in most cases the above requirement is not met; for this reason it has been proved in the literature that ‘75 percent of all change initiatives fail’ (Bunker et al., 2005, 12). The reasons for the development of the above phenomenon have not been identified yet. It seems that firms’ managers do not have the necessary competencies in order to. Moreover, the study of Bunker et al. (2005, 12) showed that ‘much of that failure stems from not understanding how to manage the structural side of change and the human dynamic of transition’. On the other hand, Katzenbach (1996, 149) noticed that ‘change efforts are often conceived as waves of initiatives that sweep through an organization from the top down, or the bottom up, or both, and flow across functions’. In other words, change initiatives – as most of the organizational plans – are not accepted by employees at least for a specific period. The specific issue was also highlighted by Huy (2002, 31) who supported that ‘fundamental change in personnel, strategy, organizational identity, or established work roles and interests often triggers intense emotions’. For this reason, it is necessary that firms’ managers make the necessary preparations before attempt any change within the organizational environment (preparation in this case could include the organizational audit, the identification of the position and the advantages of the competitors and the choice of the most cost-effective plans – identification of plans that are appropriate for the achievement of the various organizational targets but within a budget that will be set in advance by the firm’s managers. In the literature the issue of resistance developed within modern organizations in relation with attempted changes has been extensively examined. The results revealed through most of the relevant studies reveal that change is not welcomed by employees in most organizations internationally; however, whenever the attempted changes have the consent of the employees – i.e. when they progress through the employees’ active participation, then their implementation is very likely to be successful. The specific issue was examined by Eoyang et al. (2001, 5) who supported that ‘many organization change initiatives start at the top and deal strongly with any resistance from system agents that blocks progress; common ways of responding to resistance include downsizing, restructuring, and re-engineering’. Other methods for dealing with resistance developed within modern organizations regarding specific plans of change are also available to modern organizations. The choice of the method employed at each particular case belongs to the firm’s managers who will also identify the risks and the advantages related with the implementation of each relevant project. Moreover, even if the policies applied on various organizational activities are appropriate regarding the targets set by the firm’s managers, in practice many of these policies have to be rejected as inappropriate if being evaluated regarding the resources required for their realization. It is for this reason that Greve (1998, 59) noticed that change initiatives could be characterized as ‘an outcome jointly determined by motivation to change, opportunity to change, and capability to change’. For this reason, before the implementation of any plan of change within a particular organization it is necessary that the entire organizational context is carefully reviewed taking into account the fact that the conditions in the market (as well as within the organization) can change at any time creating new terms regarding the success of any attempted change. It should also be noticed that the content of the relevant plans for change cannot be identical among the various firms that operate within a specific market – even if they operate within the same industry. Moreover, the sector of organizational activities influenced by the specific plans cannot be precisely identified; it is very likely that different organizational sectors are targeted by each specific plan of change; the needs of the organization and the trends of the market are the main criteria for the relevant choice (plan of change applied on a specific organization). Towards this direction, it is noticed by Poole (1998, 45) that ‘when change is needed in an organization it is likely the culture or identity of the organization will be targeted for change; the transformed organization, whether it be minor (first-order change) or major (second-order change), will not be the same as its predecessor’. In other words, one of the most important consequences of plans of organizational change is that their effects on the various aspects of the organizational activities are likely to be permanent and extensive. By the attempted change, a new organizational environment is created; new organizational plans are then very likely to be implemented in accordance with the firm’s culture and characteristics and the market trends. It should be noticed that the implementation of plans of change within modern organizations is a challenging task usually requiring an extensive net of reforms within the organizational body. Modern literature on organizational culture and change offers to the firms’ managers a series of theoretical models that can effectively support the relevant organizational initiatives. We could refer primarily to the models suggested by Fennell et al. (1993, 90): ‘a) the strategic choice model (which is the one based in the changes happened to particular variables like the board composition and structure), b) the population dynamics (which is influenced by the population level changes) and c) the change in technical and institutional environments (which are mainly refer to the regulatory change related with the operation of modern organizations). Another model is the Robbin’s model through which a firm’s structure can be examined and evaluated using 10 principles (which are analyzed in the section that follows). The above model will be used in this paper in order to examine the organizational culture of Regional Sludge Treatment Centre, a disposal facility unit in the northeast region of UK. The identification of the potential weaknesses of the firm’s organizational culture – using this model – will help towards the development of an appropriate plan of change – if considered as necessary – regarding the various activities of the specific firm. 3. Application of Theory/model/concept - Robbin’s characteristics of organizational culture As already noticed above, Robbin’s model regarding organizational culture is based on 10 principles which could be presented through the following diagram: a) Individual Initiative/ The degree of responsibility, freedom and independence individuals have b) Risk Tolerance/ The degree to which employees are encouraged to be aggressive, innovative and risk taking c) Direction/ The degree to which the organisation creates clear objectives and performance expectations d) Integration/ The degree to which units within the organisation are encouraged to operate in a co-ordinated manner e) Management Contact/ The degree to which managers provide clear communication assistance and support to subordinates f) Control/ The degree of rules and regulations, direct supervision etc used to oversee and control employee behavior g) Identity/ The degree to which members identify with the organisation as a whole rather than their particular work group of professional expertise h) Reward System/ The degree to which reward allocations (salary rises, promotions, etc) are based on employee performance criteria i) Conflict Tolerance/ The degree to which employees are openly encouraged to air conflict and criticism openly j) Communication Patterns/ The degree to which communications are restricted to the formal line hierarchy of command’ Figure 1 – Robbin’s principles on organizational culture (see Lecture notes) The effectiveness of the above principles in the case of the specific organization can lead to the following comments: a) the freedom of individuals participating in the specific project in order to state their own views in the realization of the project does not seem to be significant; the specific plant was created because of the implementation of a specific EU directive; it was not an initiative of an individual; in this context any differentiation attempted should be in the above context (terms and conditions included in the 1991 EU directive); b) the above views could be also applied regarding the risk tolerance towards the employees of the specific plant; the level of tolerance accepted by the firm is rather low – a high tolerance could be resulted to differentiations from the initial target – application of the principles of the 1991 EU directive; c) the directions of the specific organization are clear: the firm should ‘find ways to render the end product inert so that alternative means of disposal could be used’ (see case study, p. 229); d) the integration among the firm’s various departments could be considered as high; however, the effectiveness of the various organizational projects is ensured through the appropriate changes in the firm’s policies; in this context it is noticed that NWL shifted its resources from project delivery to project operations as it faced the reality of having to embed its new acquisition into its operations’ (case study, pg. 233). f) the control over the various organizational activities is continuous; in fact it is made clear that mistakes are not permitted as they could affect the firm’s performance for quite a long; it is noticed that ‘the knowledge management system used by the organization can ensure that ‘mistakes are not made’ (see case study, p. 229-230)’ g) the firm’s employees consider that their firm is an integrate business unit with clear targets and sufficient resources in order to achieve them; the specific issue could be assumed through the fact that ‘the knowledge-creating activity that characterized the early feasibility phase … was replaced by a focus on taking what had been specified and delivering it (on time and to cost); in other words, the firm’s targets were periodically reviewed in order to ensure that they respond to the needs of the project at each particular phase; no misunderstanding regarding the targets or the identify of the firm could be made; h) the reward system existed for the firm’s employees cannot be particularly identified; no specific scheme of rewarded seems to have been implemented in the specific firm; only a short reference to specific incentives (see case study, p. 233) is made; i) although employees participate actively in the firm’s project there is no particular encouragement for the firm’s employees to improve their performance; the achievement of the specific target is a priority for the specific organization; j) in the same context, no particular communication patterns seems to have been established in the specific organization; strict rules are set regarding the achievement of the targets set by the organization’s management team (as described above). 4. Conclusions The presentation of all the above issues proves that the knowledge management systems implemented by the particular organization have been carefully chosen in order to ensure the achievement of the organizational aims. No particular differentiations from the ‘line’ implemented by the firm’s managers are accepted. The firm’s employees are given incentives in order to participate actively in the realization of the firm’s projects; however no specific plans have been implemented regarding the improvement of the employees’ productivity. In the context of the knowledge administration, the systems implemented by the firm’s managers are quite effective but no clear line exists regarding the sharing of knowledge among the organization. The application of the Robbin’s principles proves that the major weaknesses of the specific organization are the following ones: a) lack of clear plans for the improvement of organizational performance’ b) lack of specific plans for the promotion of cooperation and communication within the organization and c) lack of appropriate incentives for the firm’s employees in order to support any change attempted. References Anand, V., Clark, M., Bruhn-Zellmer, M. (2003). Team Knowledge Structures: Matching Task to Information Environment. Journal of Managerial Issues, 15(1): 15-23 Bendler, A., Elzenheimer, J., Hauschild, S., Heckert, U., Kluge, J., Kronig, J., Licht, T., Stein, W., Stoffels, A. (2001). Knowledge Unplugged: The Mckinsey & Company Global Survey on Knowledge Management. New York: Palgrave Buckley, P., Carter, M. (2004). A Formal Analysis of Knowledge Combination in Multinational Enterprises. Journal of International Business Studies, 35(5): 371-375 Chatzkel, J. (2003). Knowledge Capital: How Knowledge-Based Enterprises Really Get Built. New York: Oxford University Press Eoyang, G., Olson, E. (2001). Facilitating Organization Change: Lessons from Complexity Science. San Francisco: Jossey-Bass Fennell, M.L., Alexander, J.A. (1993) ‘Perspectives on organizational change in the US medical care sector’, Annual Review of Sociology, 19: 89-112 Huy, O. (2002). Emotional Balancing of Organizational Continuity and Radical Change: The Contribution of Middle Managers. Administrative Science Quarterly, 47(1): 31-66 Ivory, C., Alderman, N., Thwaites, A., McLoughlin, I., Vaughan, R. (2007) Working around the barriers to creating and sharing knowledge in capital goods projects: the client’s perspective. British Journal of Management, 18: 224-240 Katzenbach, J. (1996). Real Change. The McKinsey Quarterly, 1: 148-153 Kesler, G. (2000). Four Steps to Building an HR Agenda for Growth: HR Strategy Revisited. Human Resource Planning, 23(3): 24-38 Moore, M. (1995). ‘Creating Public Value: Strategic Management in Government’. Harvard University Press. Cambridge, MA Poole, P. (1998). Words and Deeds of Organizational Change. Journal of Managerial Issues, 10(1): 45-47 Appendix (Robbins’ Characteristics of Organisational Culture). 2- what types of knowledge inform Learning Organisation? Harvard Style Read More