Business case analysis and implementation

Business Case

In the 21st century, organizational change has gone from something that happened only once in a while -- for example as the result of a crisis -- to something that happens constantly. The pace of change in the technological and economic environments is much more rapid than it has been in the past. This impacts the organizational change process in a number of ways. The organization must be ready for change at any time. Those in charge of organizations must be prepared to exercise their leadership skills constantly, not just when the external environment demands. Change in the 21st century is a state of mind, not a set of tools and techniques (Entrepreneur, 1998).

The reactions to change from employees can vary significantly. Fear of injustice in the change process correlates highly to change resistance, for example (Shapiro & Kirkman, 1999). Resistance to change, therefore, is inevitable. With communication, some individuals can support the change process. However, the focus of a change program needs to be on overcoming resistance among employees who are not easily turned onto the change through the communication of basic information (Reh, 2009). Resistance can range from a reduction in morale, an increase in turnover, to outright hostility towards the change and the change agent.

There is a high degree of ethical intensity in the changes made by Walsh and Mangel. The magnitude of the consequences is high. The workers are losing their jobs, which supply them with their livelihood. In addition, these workers are unlikely to find other jobs that make as much money in future. The mortgage industry is in a slump, further constraining their ability to recover financially. These factors increase the probability that the most negative of consequences will be realized.

The temporal immediacy of the change is intense as well. The workers are going from having easy, high-paying jobs to immediate termination. The change is highly proximate, having a direct effect on almost all of the employees. The effects of the change are highly concentrated as well. While some changes proposed are diffused throughout the organization, the termination of the sales staff is a concentrated change effort.

However, the decision was made in the best interests of the organization, which is more ethically sound than other self-serving rationales.

Walsh and Mangel appeared to operate from the rational decision-making model. They first identified a number of problems, including the overpaid sales staff and the shifts in the industry's operations. From there, they set out objectives for their change program and evaluated the alternatives. They came to a reasonable conclusion, guided by the principle of doing what is best for the organization. The conclusion was not something that was savory to them, but they realized that they needed to select that alternative nonetheless.

The rational decision-making model has a logical flow from goal setting to the implementation of the change strategy. That Walsh and Mangel used this model is evident even in the implementation part of the change. They dismissed their commission reps outright, rather than undertake half measures. This was consistent with their vision for their organization going forward. It is that consistency of vision, strategy and implementation that defines the rational decision-making model.

Walsh and Mangel changed because they were forced to. Shifts in their environment were beginning to threaten the ongoing viability of their company. As such, they were compelled to make dramatics changes to the structure and culture of the organization. They took a very rational approach to the issue, and demonstrated consideration for the ethical implications of their actions. They understood that there were going to be some strong negative impacts on co-workers with whom they have developed relationships. However, they had a guiding philosophy to show them that the change needed to be made.

As a consequence, they were able to define their vision for the organization and build that vision into their change program. That they were forced to be as harsh and abrupt as they were with this change was a consequence of the scope of the changes and their ethical intensity. The decision to implement the change was itself born of utilitarian ethics, with the sales people essentially sacrificed for the greater good of the company.

This case illustrates the rational approach to change. It is clear that the change derived from a response to changes in the external environment and was driven by management's need to address these changes in a long-term, sustainable manner. During the failed first round of changes, Walsh and Mangel did not take a rational approach and instead allowed ethical considerations to outweigh other factors in the decision making process. They soon realized, however, that an approach that minimizes ethical dilemmas was also a change that would not deliver the results to the organization that they wanted.