Merrill Lynch - Time for Change - Case Study Example

Merrill Lynch - Time for change As we all know that change is necessary, an organisational change is when the organization is restructured, and it is bigger than just modifying a program. It is restructuring of the company. Change, according to the Institute of Industrial Engineers, is a muscle that develops to abundantly enjoy the dynamics of the life set before us. When change takes place, it is awkward at first but after an adjustment period it becomes okay. This adjustment period varies with every individual. According to Tech-FAQ, change management is a set of processes that is employed to ensure that significant changes are implemented in an orderly, controlled and systematic fashion to effect organisational change. The goal of change management is to make sure that change is not being resisted by employees and is being properly incorporated. To make the process of change smoother, a structured and systematic approach should be used. One thing we should always remember is that even though it can be necessary, we should not bring about a change just for the sake of changing. Normally these changes are done to stay competitive, to upgrade the company. The necessity of change does not take place from within the firm; it is usually because of outside drivers or forces. There are many models which help in change management. One of these is the AKDAR model; Awareness, Desire, Knowledge, Ability and Reinforcement. According to Tech-FAQ, this model says: "Awareness is sharing the knowledge of why the change is taking place. Desire is having the motivation to participate in the change process. This desire must exist for the employees and the organisation as a whole. Knowledge of how to change must be known, not just that there is a need to change. Ability is making the change happen by changing behaviours and implementing new skills. Reinforcement is when individuals and organisations are reinforced to sustain the changes; making them the new behaviour otherwise they will go back to their old behaviour". Literature Review The force field analysis, developed by Kurt Lewin was developed initially for social situations. It talks about forces which can help you achieve your goals or factors which will hinder the process of getting towards your goals. According to 12-Manage, Lewin's view of this analysis is that "issue is held in balance by the interaction of two opposing sets of forces - those seeking to promote change (driving forces) and those attempting to maintain the status quo (restraining forces)". The driving forces should be more than the restraining forces; this would shift the equilibrium and a change will occur. The force field analysis is a method which helps in identifying the most important target groups for a campaign, identify competitors, it helps in identifying how to influence these target groups and helps in investigation the balance of power regarding an issue. The driving forces are written on the left while the restraining forces are written on the right. The force field analysis consists of a series of steps according to Valuebasedmanagment.net, 1. Analyse the current situation 2. Know the desired situation 3. Identify where the current situation will go if no action is taken 4. List all the driving forces toward the desired situation 5. List all the restraining forces toward the desired situation 6. Question all of the forces: are they valid Can they be changed Which are the critical ones 7. Give a score to each of the forces using a numerical scale e.g. 1=extremely weak and 10=extremely strong 8. Chart the forces by listing (to strength scale) the driving forces on the left and restraining forces on the right. 9. Determine whether change is viable and progress can occur 10. Analyse how the change can be affected by lowering the strength of the restraining forces or by increasing the strength of driving forces. 11. Always keep in mind that lowering or increasing these forces may create new forces or cause changes in the existing ones. A diagram of the force field analysis will help explain the model better. The stronger the force is; the longer the arrow, the less the strength of the force; the smaller the arrow. Requirement of Changes In Merrill Lynch's case, the organisation needs to change because in 2004 there is a lot of discrimination against women. Although this may not seem very obvious by looking at the firm as they do have many female employees, all these employees have support positions and none of the occupy the top positions of authority and leadership. These women are paid almost 43 per cent less. The organisation has changed since then; it has been named the best place to work for mothers. It has adopted a family friendly culture, but the consequences of the discriminatory acts are still being carried by the company. People still fear that such cases might come up in the future. A change needs to take place to change the perception of the employees and the general people. "People in their fifties and sixties will soon be seen in age discrimination cases, as many are forced to retire early," said Aldridge Parker and employment lawyer in pick your Suit by Walsh. When people think of Merrill Lynch, they should not think about the discrimination cases. Also, employees who work for the company should know that their company is not involved in such practices; the position of the company in the minds of the employees should be that of prestige (Regan, 1981). The success of a corporation lies more in its intellectual and system capabilities than its physical assets (Klein, 1998). One thing we should note here is that the morale of the employees is not the only thing that is affected by the sexist culture, it also affects the company's profitability and its performance overall. In the past few years Merrill Lynch has been through its share of court cases, it has won a few and lost many. Companies nowadays fear such cases because it leads to bad publicity for the firm and causes recruitment problems. Also employment tribunals put a cap on the amount a person can claim for unfair dismissal and for discrimination especially against gender there is not such limit. This can cause the firm to loose a lot of money. Merrill Lynch's force field analysis for a culture change has many forces. The driving forces are as follows: Changing the culture, would improve the employee morale and help the employees in performing better. The lawsuits that the company has to fight will be reduced which would save the company's finances. It will enable the firm to recruit better employees, who will be more willing to work for the company because the bad reputation will be decreased. It may lead to higher gains in the future for the company and improve the current financial situation. The company's overall performance will be improved as women who work for the firm will not constantly be feared about discriminatory practices against them. New ideas can be brought to the firm, by letting females occupy leadership positions. Females have a collectivistic nature, thus they will take the department as a whole towards better performance and improvement. According to Jon Jacobs, there has been a recent lawsuit by the EECO, based on a quant analyst's complaint that he was fired after being verbally harassed about being an Iranian and a Muslim. This is a reminder of all the cases that the organisation has been through over the past few years and any changes that they had made or awards received have lost their effect. The restraining forces for a corporate culture change are: The fact that discrimination not only exists at Merrill Lynch but across the city. This leads to the CEO into thinking that why should they be the only ones changing. There is a highly individualistic environment in which the any problems are thought of as personal problems. Men and women who want a family life are not preferred for jobs. A thinking that exists is that giving such important positions to women may lead to more mistakes being made and loss of opportunities for the company. There is a general tendency of people to think that men are more suited in leadership positions. If the pay gap between males and females is decreased it could become costly for the company. Most firms tend to settle such cases quietly, this leads to them having options and not getting a bad reputation. The firm then thinks that they might get the employee to not take the case to court which would cost money but save the reputation of the business. Merrill Lynch has had some recent victories in the discrimination cases, the owners and the managers may think that they can keep doing what they are as the recent suits have been won by them. The people's perception will change and their company will be viewed in a new light and perspective. In 2003, the company was rated number one for working mothers and some changes have already been made to make the company more family oriented and supportive of having a family. Now according to the Kurt Lewin model, the restraining factors need to be reduced while the driving factors need to be increased. Currently an equilibrium position exists but these efforts need to be made to achieve the ideal position or state for the company. Cliffsnotes says that there are some reasons why these resisting factors exist in the first place; because employees feel unsecured and uncertain when a change is introduced. The change may cause people to have different perceptions and lack of understanding. A change usually leads to redundancies and employees are always concerned about their jobs. Discussion All of the resisting forces may not be reduced. The company should focus on reducing the resisting forces which are not that strong and then move on to the stronger resistors. Provide training to help reduce the prejudice attitude that is held by the employees. Policies of the company can be altered to fit the new goals. These goals can be set according to performance and not such things such as race, gender and age. The hiring process should be made totally unbiased so that people from different backgrounds can be hired. Employees should be made to socialise with each other and work together as a team. This would reduce stereotypes and opinionated attitudes of the employees. Cost should not be viewed by itself; it should be viewed as a result of the outcome or the performance that will be generated by hiring female workers. The cost can be fatal (Schooley, 2002). Obviously they will generate outcome for the business which will result in profitability, thus the cost in such a case would be covered. By involving the employees when making new policies, the company and the managers will make the employees feel part of a group and their comments may be useful. Also, their considerations would be kept in mind. Some things that the managers should keep in mind before implementing any sort of change are that the manager should ensure that the existing culture and the perception of the employees is not resistant to change. They should be made to feel comfortable about the whole process and this can only be done by communicating with them and taking their opinions and including them through out the whole process. Another thing that should be considered is that is the timing of the change. The change would not be successful is it took place when the company was doing well and all the employees were happy with their jobs. A change at such a time would cause inconsistency and leave the employees confused and scared. When the company is low on resources, a change should not be implemented. When changing the whole corporate culture, money needs to be spent, whether it is training or its evaluating what needs to be changed. If the company has been going into loss for a couple of years, a change would not be possible and even if the company does decide to change, they will not be able to do it properly. Managers should ensure that the change process goes through all the way and there are no inadequacies. Faulty thinking is also one of the pitfalls which when avoided or treated can lead to a successful change process. Conclusion During a change process, a structured and systematic action plan is best. This helps managers in knowing what to do when. When deciding what needs to be changed, employees should be communicated with and involved in the process by asking their advice. Communicating to them the new policies that the company plans on introducing and what are their views and opinions about them. During the implementation period, training should be provided to the employees. It is usually best to hire experts who can give employees the relevant knowledge that they require. In this case, it would also be helpful if the top management changed their attitudes and set examples and acted as mentors for the lower level employees. If employees see that their bosses are committed, their commitment level also rises. Social gatherings can be arranged, to initiate contact between groups which might not interact on a regular basis. The new behaviour should be reinforced by rewards whether monetary or emotional. If this is not done the employees may go back to their old behaviour which will lead to the whole change process, the effort and the money spent to be useless. This action plan can be implemented to ensure that the organisational change process in Merrill Lynch proves to be successful. References Bernstein, Richard. (2001). Navigate the Noise: Investing in the New Age of Media and Hype. John Wiley and Sons Publications. Force Field Analysis-Lewin, Kurt Value based management. [Online]. http://www.valuebasedmanagement.net/methods_lewin_force_field_analysis.html. Force Field Analysis 12-Manage. The Executive Fast Track. [Online]. http://www.12manage.com/methods_lewin_force_field_analysis.html. Force Field Analysis. Sky Mark. [Online]. http://www.skymark.com/resources/tools/force_field_diagram.asp. Force Field Analysis. University of Cambridge, Institute of Manufacturing. [Online]. http://www.ifm.eng.cam.ac.uk/dstools/represent/forcef.html. Force Field Analysis. Understanding the Pressures For and Against Change: Mind Tools. [Online]. http://www.mindtools.com/pages/article/newTED_06.htm. Jacobs, Jon. (2007). EEOC vs. Merrill Lynch: Perils of Workplace Culture. [Online]. http://news.efinancialcareers.co.uk/NEWS_ITEM/newsItemId-10664. Klein, David A. (1998). The Strategic Management of Intellectual Capital. Butterworth-Heinemann Publication. Kurt Lewin's Force Field Analysis: Decision Making Made Easy. Management for the Rest of US. [Online]. http://www.mftrou.com/Lewins-force-field-analysis.html. Opposition to Organisational Changes. Cliffsnotes. [Online]. http://www.cliffsnotes.com/WileyCDA/CliffsReviewTopic/Opposition-to-Organizational-Changes.topicArticleId-8944,articleId-8889.html. Organisational Change and Development. Chp 12. [Online]. http://jeritt.msu.edu/documents/TallmanWithoutAttachment.pdf. Regan, Donald T. (1981). The Merrill Lynch Story. Newcomen Society in North America. Schooley, Keith. (2002). Merrill Lynch: The Cost Could Be Fatal: My War against Wall Street's Giant. Lakepointe Publishing. 1. Walsh, Conal. (2004). Pick your suit. The Observer. [Online]. http://www.guardian.co.uk/business/2004/jul/18/theobserver.observerbusiness. 2. Walsh, Conal. (2005). Worst of times to be discriminating. The Observer. [Online]. http://www.guardian.co.uk/business/2005/jan/02/theobserver.observerbusiness3. 3. Walsh, Conal. (2005). Secret Merrill documents reveal gender pay gaps at London office. The Observer. [Online]. http://www.guardian.co.uk/business/2005/feb/20/genderissues.theobserver. Appendix A Source: http://www.newsvisual.com/photos/uncategorized/2007/10/04/screenhunter_05_oct_04_1321.gif. Read More