Operational efficiency and sustainability are some of the most essential aspects that profit and non-profit oriented firms should consider in their strategic management practices (Pryor, Taneja, Humphreys & Singleton, 2008). The importance of operational efficiency arises from the need to enhance firms’ long-term existence through effective production, sourcing, distribution, and nurturing a strong relationship with different internal and external stakeholders.
Conversely, sustainability is aimed at increasing the chances of an organization enduring and surviving the prevailing environmental situations. However, achieving operational efficiency and sustainability is a challenging undertaking. Gechev (2005) asserts that sustainability is comprised of diverse dimensions, which include economic, environmental, institutional, and social sustainability. Failure to take into account these dimensions may negatively affect an organization’s quest for long-term success and survival.
In its quest to attain business excellence, a major oil and gas company that has attained global market presence restructured its top management. The firm’s restructuring effort was triggered by the need to optimize financial performance by stimulating sales revenue, level of profitability, and the firm’s stock prices. Despite its success in stimulating financial performance, the firm’s management team has largely ignored other dimensions of sustainability such as social and environmental sustainability in its change management process. The firm pressurizes its employees to be productive in order to achieve its financial goals.
Thus, the stress level amongst the firm’s workforce has increased remarkably due to the firm’s failure to consider their needs. This aspect shows that the firm has not been successful in implementing organizational change. Furthermore, the firm’s decision to ignore environmental and social dimensions of sustainability has affected the firm’s pursuit of sustainable development. This paper illustrates the steps that the firm should take into account in order to enable the organization to deal with the issue.
Steps were taken to address the problem
Action learning and action research
Laughland and Bansal (2011) accentuate that the need to implement change by the organization has been increased by diverse internal and external forces. Some of the major forces stimulating organizational change include intense competition, demand for higher earnings by shareholders, and changing employees’ needs. These forces make change management complex and challenging, thus limiting the attainment of sustainability. Laughland and Bansal (2011) assert that firms “that invest in sustainability are no worse off financially than those that do not” (Par. 1). Moreover, their employees, shareholders, and customers are highly committed to the firm. However, most organizations do not have adequate competence to motivate their workforce to participate in sustainability initiatives.
The problem faced by the oil and gas company in implementing change is a major hurdle in achieving sustainability. This problem will be solved by employing the concepts of action learning and action research. Sankara and Passfield (2001) affirm, “Action learning and action research involve active learning, searching, problem solving, and systematic inquiry into a particular issue” (p. 2). Alternatively, action learning can be defined as the process of learning from actual experience or action. Subsequently, action learning leads to the development of a learning organization due to the moment-to-moment actions undertaken by the practitioner or the research.
Sankara and Passfield (2001) support the hold that action “learning and action research refer to something that happened in the past, which has affected our present insight, learning, and knowledge bases and it enables and compels us to plan our future action accordingly” (p. 2). Action learning and action research are fundamental methodologies in creating organizational change coupled with improving organizational leadership, innovation, organizational, personal, and professional learning.
Action research will be based on a collaborative approach, which means that it will emphasize the significance of people’s involvement and application of knowledge associated with the issues affecting the organization. However, nurturing collaborative relationships amongst various organizational stakeholders is an exigent task that requires to be nurtured over time and through careful facilitation.
Action learning sets discussions
In addition to action learning and action research, the problem faced by the oil and gas company will be evaluated by employing action learning set discussion. McGill and Beaty (2001) define an action learning set as “a group of people sharing similar problem” (p. 348). The group has a duty to actively deal with the problem faced, for example, by raising their opinions and ideas on how to deal with the problem (Frankland, 2007). Therefore, the parties in the discussion group undertake an extensive assessment of the topic under discussion (Pedler & Abbott, 2013).
In the organizational setting, the discussion groups have an obligation to compel the top management to seek specialized assistance if the problem is beyond their capacity to deal with. Therefore, it is imperative for the organization to institute open communication. In this situation, the action set discussion will be work-based, which means that it will be a collaborative effort amongst change management and sustainable development expert, the firm’s top management, and the lower-level employees.
One of the areas that the action learning-set discussion will focus on includes examining the relationship between sustainability and change together with how it can enable the firm to achieve economic, social, institutional, and environmental sustainability. This goal will be achieved by assessing how the organization can attain sustainability by employing various models such as the McKinsey 7S model, the traditional change model, and the GROW model.
Change and crisis management
Contemporary organizations are operating in risky, turbulent, and uncertain business environments (Lockwood, 2005). Thus, organizational leaders have an uphill task in guiding their organizations towards achieving business excellence, which highlights the need for adopting effective management practices. Change and crisis management are some of the management areas that organizational leaders should focus on in their operations (Lockwood, 2005).
Change management involves a method of management that emphasizes the significance of adapting an organization to the changing environment (IGI Global, 2014). Conversely, failure to adapt to the prevailing environmental change is one of the major causes of the crisis in organizations (IGI Global, 2014). IGI Global (2014) further emphasizes that crises are “the result of failures in change management, which means that they start with leadership in change management” (p. 807).
Currently, companies are pressurized by diverse forces to restructure their organizations in order to gain higher efficiency. However, scholars and experts caution organizational leaders against the quick implementation of change. Cummings and Worley (2009) assert that a lack of effective change implementation can lead to negative results. Previous studies conducted have cited a number of reasons that explain why organizations fail in their change implementation processes (Pryor et al., 2008).
Some of these reasons include allowing complacency, lack of communicating vision, failure to implement short-term wins, lack of establishing an effective guiding coalition, and failure to implement change in the organizational culture (Pieterse, Caniels & Homan, 2012). Ramanathan (2009) postulates that successful management of change depends on the organizational leaders’ commitment to a number of issues, which include employee motivation, leadership, employee training and development, and effective communication. Additionally, the degree to which organizational leaders understand the employees’ opinions towards change is paramount in successful change management (Ramanathan, 2009).
Change management approaches
Different approaches have been developed in an effort to explain change management. However, the most common approaches include the planned and emergent approaches.
The planned approach suggests that change is a rational and intentional organizational process (Cummings & Worley, 2009). Most organizations adopt the planned approach in their change management processes. Furthermore, change is considered a top-down issue, which refers to the systematic process of planning, organizing, and executing the change plan in order to attain the desired state. Ramanathan (2009) is of the view that planned “changes in organizations are triggered by the failure of people to create continuously adaptive organizations” (p.30). Therefore, planned change takes into account an organization’s behavioural aspects such as its people, organizational culture, and processes. Moreover, the planned change approach argues that change is instigated internally in organizations’ quest to respond to environmental pressures.
Lewin’s three-step model is one of the strategies used in implementing change under the planned change approach. The model is comprised of three main stages, which include unfreezing the organization, changing the organization, and refreezing the organization to the new configuration (Cummings & Worley, 2009). The unfreezing stage focuses on changing the employees’ behaviours, which increases the level of understanding of the importance of implementing change.
Furthermore, the unfreezing stage aims at motivating employees in order to increase their commitment to change. The second phase entails developing a clear definition of the current and the desired stage. Furthermore, the stage also involves the identification of how the change will be implemented. The unfreezing stage entails sustaining the change (Ramanathan, 2009). Despite its significance in change management, the model is limited as it assumes that organizations operate in a stable environment.
Lewin’s three-step model is closely related to the four stages of managerial interpretation of change according to a study conducted by Isabella in 1990. These stages include anticipation, confirmation, culmination, and aftermath (Sharma, 2007). The confirmation phase involves gathering rumours and concrete information regarding a particular organizational frame of reference. The confirmation stage involves examining and comparing the frame of reference to past actions. Sharma (2007) contends that the “culmination stage involves comparing conditions before and after a phase of symbolic meaning” (p. 57). Furthermore, this stage also involves reconstructing and amending the issues identified. The aftermath stage entails reviewing the change outcome.
Emergent change approach
The emergent approach perceives change as an evolving and continuous element. This approach emphasizes the significance of organizations scanning the environment in order to identify how to adjust their operations to the environmental changes. Unlike planned change, the emergent change approach adopts a bottom-up approach, which makes it an open-ended process. Moreover, the emergent approach perceives change as an emergent process (Ramanathan, 2009).
Crises in organizations can no longer be considered as unusual and improbable events. On the contrary, the diversity and occurrence of crises in organizations have increased significantly over the past few decades. Lockwood (2005) emphasizes that crisis management has become one of the core strategic management issues due to the numerous crises that organizations face. Moreover, the significance of crisis management has led to the development of multiple perspectives of organizational crisis.
Some of the common perspectives include technological-structural, social-political, and psychological perspectives. The psychological perspective asserts that crises are complex, uncertain, and emotional events, which limit the individuals’ capacity to process information. Moreover, the psychological perspective asserts that crises occur due to the organizational leaders’ irrationality in decision-making (IGI Global, 2014). The social-political perspective postulates that organizational crisis arises from failure in an organization’s collective sense-making or the followers’ failure to believe in the organization’s cultural norms.
During such a situation, an organization is likely to experience a high rate of employee turnover due to the ineffective organizational culture. The technological-structural perspective argues that the “cause of a crisis is closely related to technologies that interact with managerial, structural, and other factors of an organization internally and externally” (Pieterse, Caniels & Homan, 2012, p. 801).
Osilaja (2009) asserts that the objective of crisis management is to improve the efficiency with which organizations avert and intervene in crises. The success or failure of crisis management is dependent on the management teams’ ability to implement a number of key elements, which include business risk control, crisis assessment, invocation and escalation, management and recovery, closure and review, and improvement. According to Lockwood (2005), crisis management planning improves an organization’s capability to deal with unforeseen events that may affect an organization’s operations adversely.
Successful crisis management planning should take into consideration diverse organizational programs such as risk management, business continuity [short-term and long-term sustainability], disaster recovery, emergency response, and effective communication (Lockwood, 2005). However, traditional human resource management practices are inefficient in assisting organizations to deal with crises. Consequently, HR managers in the contemporary environment must have the ability to project possible crises.
Despite the view that it is impossible to predict the future, organizational leaders have an obligation to determine the most critical aspects that might affect their workforce negatively in the future (Lockwood, 2005). One of the areas that have largely been ignored relates to the human side of a crisis. During crises, organizations put more weight on organizational infrastructures, operations, and systems as compared to public relations, which explains why the oil and gas company under investigation in this case failed to achieve sustainability. Lockwood (2005) is of the view that businesses “should pay extra attention to employees, their families, and the community” (p. 3). In order to manage crises successfully, HR managers must work in collaboration with various internal stakeholders such as employees in order to formulate enterprise-wide solutions (Pieterse, Caniels & Homan, 2012).
Critical Action Learning
Intentional organizational change is a common phenomenon amongst organizations. The need to implement change varies across organizations, for example, the need to eliminate operational inefficiency. Kember (2000) asserts that most organizations find themselves in unfamiliar situations in dealing with diverse internal and external issues. Moreover, their problem-solving techniques may be ineffective in dealing with the issues faced (Kember, 2000). This aspect underscores the importance of adopting new approaches and skills in order to deal with the challenges faced effectively.
Action learning is an effective strategy that organizations can adopt in dealing with the problems faced. Action learning is mainly suited when dealing with complex problems or in situations where an organization does not attain the desired outcome after implementing change. Freedman (2006) is of the view that the “problem should be complicated enough to provide learning opportunities, learning opportunities, knowledge building, and the development of specialized skills” (p. 7). Thus, action learning enables organizations to attain organizational development.
The oil and gas producing company faces a challenge in its quest to achieve sustainability by implementing organizational change. The organization has partly achieved financial sustainability but failed in attaining social, institutional, and environmental sustainability. In order to attain overall organizational sustainability, the organization should adopt action learning. The group should be comprised of 4 to 8 members selected based on their expertise or professionalism (Marquardt, 2011).
The professionals can be sourced internally or externally. Furthermore, the organization’s management team should incorporate the element of diversity in developing the action-learning group. Freedman (2006) accentuates that diversity will enable the action learning group to develop diverse perspectives and innovative viewpoints on how to deal with the change management and sustainability problems faced.
The action learning team should formulate a clear question to be used in tapping the team members’ opinions on how to deal with the problem faced. The questions will improve the firm’s reflective inquiry and promote team cohesiveness coupled with team learning and system thinking (Freedman, 2006). The organization’s top management team should assess the options provided and determine their efficacy. All the internal stakeholders should share the learning achieved in order to enhance the chances of implementing change (Freedman, 2006). Additionally, the organization should appoint an action-learning team coach whose responsibilities should entail identifying learning opportunities, hence the likelihood of applying participative problem solving and action learning.
Therefore, action-learning research emphasizes the importance of problem-solving through a participative approach through teamwork and effective communication (Cummings & Worley, 2009). Subsequently, the likelihood of minimizing employee resistance to the desired change is minimized. Cummings and Worley (2009) further argue that action learning is educative as it provides organizations’ management teams with an opportunity to develop a broad understanding of the issue at hand, hence improving the likelihood of formulating the most effective solution.
Sustainability- McKinsey 7S and the GROW models
The oil and gas company can attain optimal performance by focusing on the elements of sustainability and change management. Despite the firm’s effort to attain sustainability, its change management effort is ineffective as it focuses on financial sustainability. The company’s management team should improve its change management efforts by implementing the McKinsey 7S and the GROW models. However, the firm’s success will depend on the management team’s expertise in applying these models. Thus, it is paramount for the firm to utilize the critical action learning team.
Under the 7S model, the firm should understand how the various components of the McKinsey 7s model are applied in the organization. These elements include the hard components [systems, structure, and strategy] and the soft components [shared values, skills, staff, and style] (Lunenburg, 2011). The company’s decision to restructure the top management was motivated by the need to improve its financial performance and hence the firm’s long term competitive advantage and sustainability. However, Wong (2008) emphasizes that the intent of sustainability should not only be to make money for the firm’s shareholders.
However, sustainability should be a system view, and hence firms’ management teams should evaluate how their decisions affect another stakeholder in the organization. Moreover, sustainability should embrace ecological, economic, and social systems as the three components are interconnected. Thus, the firm’s management team should take into account diverse dimensions of sustainability in its strategy formulation process (Wong, 2008).
Some of the areas that the firm’s management team should focus on entail environmental and social sustainability (Wong, 2008). The firm’s core business operations involve dealing with oil and gas. Subsequently, the firm’s operations may affect the environment adversely through environmental pollution, hence increasing its contribution to climate change. The firm should adopt the concept of action learning in determining the most effective way through which consumption of its products do not adversely affect various environmental components such as air, human health, and biodiversity (Wong, 2008). One of the strategic issues that the firm should focus on includes improving its corporate social responsibility strategies.
The firm should also focus on achieving institutional sustainability by improving its organizational structure and system. Currently, the firm has limited its change to the top management, which limits its ability to align the overall organizational structure, processes, and procedures towards the attainment of the intended change. Moreover, the firm has largely ignored the lower levels of management in making decisions on how to implement change. In its quest to attain institutional sustainability, it is essential for firms to focus on developing strategies that will improve employee motivation. This goal can be achieved by focusing on improving the employees’ talents through training and development. This aspect will improve organizational identification amongst employees, and thus their commitment to the various organizational changes.
The GROW Model
In a bid to attain long-term sustainability and competitive advantage through the implementation of organizational change, the oil and gas company should ensure that the change management process is inclusive. Thus, the firm’s management team should understand that the firm’s sustainability depends on the commitment of its employees (Pieterse, Caniels & Homan, 2012). First, the firm should ensure that the employees understand and appreciate the organization’s goal. This aspect will aid in aligning the organization’s goals with that of its workforce.
Secondly, the firm should ensure that the employees understand the organization’s current position, and hence the need for change. This aspect will increase the firm’s understanding of the employees’ perception of the intended organizational change. Subsequently, the firm will be in a position to understand the options that the firm should be taken into consideration in implementing the goal. The final stage entails fostering a high level of involvement and motivation amongst the workforce (Wong, 2008).
In order to foster the employees’ will, the firm should take into account the elements of social sustainability, which include human rights, working conditions, health, and safety issues and labour rights. Furthermore, the firm should also evaluate the most effective way of nurturing a high rate of employee retention in order to improve the firm’s long-term survival.
Change management is one of the fundamental aspects that organizations should take into account in their quest to achieve sustainability. However, organizations’ change management efforts should adopt a wide perspective by incorporating economic, institutional, social, and environmental aspects. Action learning and action research are some of the most effective techniques that firms can adopt in their change management efforts. Action learning and action research lead to the development of great insight on how to implement change due to extensive collaboration amongst the various internal organizational stakeholders.
Therefore, firms should also employ action-learning set discussions in their change management process. In a bid to succeed in achieving organizational sustainability, organizational leaders should use different models such as the GROW and the McKinsey 7S models. Applying these models will improve the chances of attaining economic, social, institutional, and environmental sustainability, hence the firm’s competitiveness.
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