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Change is ubiquitous. This is established from the fact that how vastly different the world we live in today is compared to just a few decades ago. Whether it is in response to a major event, a discovery that shapes an organization’s core function or simply the introduction of new technology, change is inevitable. Firms either fail to grow or climb the ladder of success because of their ability to lead and manage change. Bringing a change is significantly difficult and there is no uniform approach. However, there are many examples of some of the notable and well-known companies that have been able to absorb and successfully implement changes in their organization. The purpose of the literature review is to understand the role of leadership during organizational change process. Analysis will be done by synthesizing the relevant literature on the subject from different resources. The review will be concluded with a summarization of key findings of research.
To identify relevant studies the following electronic databases have been searched: Emerald Full Text, EBSCO, Business Sage Journals, ResearchGate, Science Direct, Taylor and Francis, Wiley Online Library and Springer Link. A systematic search was also conducted on Google Scholar with usage of specific keywords such as ‘Role of leadership in Change Management’, ‘Need for Change Management in Organization’ ‘Organization Change’ ‘Understanding and Leading the Change’ ‘Why Change Management Fails’. Searching the terms gave an automatic response on Change Management us to conclude that the research was inclusive and headed in the right direction.
Role of Leadership is very critical in achieving effective Change Management
Change is often difficult and not easy to accept by employees. However, the study by Faupel & Süß, (2018), specifically probes into the role of transformational leadership in helping the employees absorb and adapt to change. The study was conducted by a survey on 328 employees who were going through organizational change to complete using structural equation modelling for data analysis (Faupel & Süß, 2018, p.1). The results highlighted that Transformational leadership helps in expanding employee capabilities and makes them perceive the consequences of organization changes as positive and attractive thereby inviting employee behaviour in support of change (; Ajmal et al., (2012); Hao & Yazdanifard, (2015); Faupel & Süß, (2018), p. 4).
Often organizations fail to achieve successful change management
Change although perceived as necessary and implement by most of the organizations does not always lead to successful result. Research highlights that reasons why organization change fails to implement successfully is due to limited understanding of how change has to be implemented and more importantly inability in modifying one’s management style as a result of which even standard theories and change models or varied approaches to change may not bring about a desired outcome (Gilley et al., 2009). The research conducted by Gilley et al., (2009) aimed to highlight the role of leadership and use of specific leadership skills in helping the organization and the employees proceed with the intended change. The research states that if the organization leaders make their role more employee centered and address issues of employee motivation and communication are more likely to lead the change effectively whereas leaders who are not able to utilize these skills contribute towards examples of failed organization change management (Gilley et al., 2009).
Cultural Change as a form of Internal Organizational Change
One of the many types of change an organization may go through is the cultural change. Bringing about a cultural change is considered to be most challenging for leaders of the organization because an organization’s culture is a complex web of goals, processes, communications practices and assumptions that are formed and rooted firmly over a good period of time. As such, uprooting of such though processes and goals initiates resistance from employees. Leadership and organizational culture are closely linked in the process of change (Belias & Koustelios, 2014). Infact it has been observed that most of the times the employees resist to change because the leaders are unable to grasp exactly what motivates their employees. According to the study, a corporate leader who encourages its employees to be continuously involved in the decision-making process and favours learning and innovation helps in building a culture which is adaptive and flexible.
The role of leadership in facilitating cultural change in the organization gets amplified as it is found that employees become highly motivated and productive when the change comes in person through the top management. Such employees feel free to express their acceptance or reservations on the pretext that their suggestions hold value with the top management, therefore resist less to the intended changes proposed by the management. Change that is executed by coercive power or for calculated gain in certain roles is not likely to be followed. They believe that the fact that individuals resist change is partly as a result of the leader's failure to grasp what motivates followers to change their behaviour.
Linkage between leadership and employee behaviour for producing effective change management
A study by Chou, (2015) is also directed in the same direction which probes into the linkage between role of transformational leadership and behavioural support lent by employees in bringing the organizational change which faces relatively lesser resistance. The study was intended to analyse two goals which were identify and assess the factors through which transformational leaders influence their workforce and explore the interim role of ‘self-efficacy’ and commitment on part of employees to analyse the role of their behavioural support towards organizational change. The study was conducted by means of empirical research which concluded that transformational leadership helps in reducing job-related stress of employees and identifies that self-efficacy is essential in making organization change smooth and resistance-free. The employees who had higher self-efficacy displayed easier adoption to change and showed positive behavioural support against those who had less self-efficacy. The study also validates to other stated researches in the literature that conform that transformational leadership is the essence of implementation of an organization change.
Causes of Resistance to Change
Several factors have been identified as causes to resistance in change. A research by Stegăroiu & Talmaciu, (2016) looks into the causes from various perspectives. The research highlights three types of people identified in the organization when dealing with change. These are victims of change who oppose and blame the management for change and are not ready to move in lines with the change, neutral in front of change who advance slowly and are not much affected by changes and masters of change who absorb the change to enhance their skills and growth in the organization (Stegăroiu & Talmaciu, 2016, p. 134). The research also identifies causes to resistance in change as cognitive that is arising out of miscommunication or lack of understanding in employees as to why change is being implemented, emotional resistance that is when employees develop emotional attachment to a certain process within the organization and personal resistance that is when the agents of change are not trusted by the employees (Stegăroiu & Talmaciu, 2016, p. 135). In this regard Appelbaum et al., (2015) have also identified factors such as anxiety, extent of change and possible impact on culture assumed by the employees that often result in resistance to change.
Examples of success and failure to adapt to change
According to an article published by Denning, (2018), the leading streaming giant, Netflix Inc is one of the best examples of the company that anticipated and invited technological change early on as a result of which the company was able to take a first mover advantage in the online streaming business. The company, to transform its business took the bold move of restructuring its employee policies (internal factor of change) under the leadership and guidance of their leader Reed Hastings who is also considered as a Transformational Leader and brought about radical changes in their governance. The result was that the company was able to expand its operations across 190 countries and increase its earnings to become the market leader in its segment. On the other hand, the failure to adapt to change costed the leading e-commerce giant, Amazon Inc, lose business from the most promising retail markets, China. According to Ye, (2019), Amazon Inc although providing a large option to the Chinese customers could still not appeal and engage them to make purchases because they failed to understand customer expectations (external factor of change). The Chinese customers did not like the website interface and Amazon Inc inspite of understanding the need to change, did not adapt to it on accounts of providing uniformity of portal across the globe. As a result, the business in China started dropping and the company had to ultimately shut down the business and let go of the mist lucrative market, China (Ye, 2019).
Change is an inevitable part of the organization. Despite understanding the need to change, several organizations fail to implement it successfully. The research highlights the need of leader to understand the factors both internal and external to bring about the change. More specifically, in order for the change to be effective the leaders need to essentially understand the pulse of their organization and determine what exactly motivates and drives their employees and work towards a transformational culture where ideas can be freely expressed so that organization change can be smooth and effective.
Ajmal, S., Farooq, M. Z., Sajid, N., & Awan, S. (2012). Role of Leadership in Change Management Process. Abasyn Journal of Social Sciences, 5(2), 111–124.
Appelbaum, S. H., Degbe, M. C., MacDonald, O., & NGUYEN-QUANG, T.-S. (2015). Organizational outcomes of leadership style and resistance to change (Part Two). Industrial and Commercial Training, 47(3), 135–144. https://www.cin.ufpe.br/~llfj/Emerald/Organizational%20outcomes%20of%20leadership%20style%20and%20resistance%20to%20change%20(Part%20Two).pdf
Belias, D., & Koustelios, A. (2014). (PDF) The impact of leadership and change management strategy on organizational culture. ResearchGate, 10(7), 451–470. https://www.researchgate.net/publication/261570276_The_impact_of_leadership_and_change_management_strategy_on_organizational_culture
Chou, P. (2015). Download Limit Exceeded. Citeseerx.Ist.Psu.Edu, 7(3), 110–122. http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.680.5560&rep=rep1&type=pdf
Denning, S. (2018). The Netflix Pressure-Cooker: A Culture That Drives Performance. Forbes. https://www.forbes.com/sites/stephaniedenning/2018/10/26/the-netflix-pressure-cooker-a-culture-that-drives-performance/#231c9f151ac0
Faupel, S., & Süß, S. (2018). The Effect of Transformational Leadership on Employees During Organizational Change – An Empirical Analysis. Journal of Change Management, 19(3), 1–22. https://doi.org/10.1080/14697017.2018.1447006
Gilley, A., Gilley, J. W., & McMillan, H. S. (2009). Organizational change: Motivation, communication, and leadership effectiveness. Performance Improvement Quarterly, 21(4), 75–94. http://cstl-hcb.semo.edu/hmcmillan/Pubs/Gilley_Gilley_McMillan_2009.pdf
Grinapol, C. (2014). Reed Hastings and Netflix (pp. 81–93). Rosen Publishing.
Hao, M. J., & Yazdanifard, R. (2015). How Effective Leadership can Facilitate Change in Organizations through Improvement and Innovation. Global Journal of Management and Business Research, 15(9), 1–6. https://journalofbusiness.org/index.php/GJMBR/article/view/1737/1639
Sainato, M. (2020). ‘I’m not a robot’: Amazon workers condemn unsafe, grueling conditions at warehouse. The Guardian. https://www.theguardian.com/technology/2020/feb/05/amazon-workers-protest-unsafe-grueling-conditions-warehouse
Stegăroiu, I., & Talmaciu, I. (2016). Causes of resistance to change. What managers should do? International Conference “Risk in Contemporary Economy,” 17, 133–138. http://www.rce.feaa.ugal.ro/images/stories/RCE2016/StegaroiuTalmaciu.pdf
Ye, J. (2019, April 19). Consumers say Amazon failed in China because it didn’t adapt. South China Morning Post. https://www.scmp.com/abacus/tech/article/3029294/consumers-say-amazon-failed-china-because-it-didnt-adapt
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