Organizational Change and Human Resources

Abstract
This paper summarizes three articles. The first two pertain to organizational change and the last one to human resources with respect to the global organization. The first article provides a history of organizational change as a discipline, some statistics that illustrate the challenges associated with organizational change, and some of the best practices for how to make organizational change successful in an organization. The second article is specific to McDonald's, highlighting that company's struggles to effect organizational change. Management's view of what change looks like is not really aligned with the views of the franchisees, and in general this has left the franchisees critical. This is a case study is how not to implement a successful organizational change program. The third article is about the role that human resources plays in the development of the global organization, in particular with respect to training.
Outline
Change Statistics
McDonalds
HR Role in Cultural Intelligence
Change Statistics
The Change Missionaries article appears in Human Capital, and it provides almost an infographic-style overview of strategic change initiatives, using material from several different sources. The article notes that change management came into fashion as a discipline in the 1980s, and it was enterprise that formed the early adopters, seeking to resolve a pain point around making organizational changes happen.
The seminal work in change management was published in 1996 by John Kotter, and this research revealed that only 30% of change programs succeed. By the 2000s, organizational change was formalized as a discipline, and fully accepted in business., but despite this, and increased training, the statistic of roughly one-third of change programs succeeding continued to hold true.
The paper then covers some statistics around change management. One of these is that 14.9% of money spend on change initiatives is lost due to failed efforts. Because of the high failure rate of change initiatives. One of the major issues is that many within the organization are simply not sufficiently motivated to change. As an example, it takes at least 75% of the leadership of the organization to accept that business as usual is no longer acceptable in order for a change initiative to succeed. Leadership buy-in, therefore, has been identified as a key part of change management.
The paper also contains a number of different case studies, mainly from enterprise, highlighting some of their change efforts and views on change efforts. The next section covers the benchmark practices that are indicative of successful change efforts. These include communication, providing clear direction throughout the organization, and creating a mandate for change. Making sure that the employees are ready to embrace new ideas is a key theme, ultimately it is the employees who will have to implement the changes.
One of the issues identified is that simply training managers about organizational change is not enough. Change is not something that can be executed with theory – it is a daily effort. As such, change requires not only training on techniques, but also requires a fair bit of commitment as well. Part of ensuring organizational commitment falls to the communication problem. Organizational change is almost always top-down, and the further down in the management ranks one goes, the less the managers typically get the message of change. This makes it difficult to implement the change through the majority of the workforce, if their manager neither understands the change, why it needs to happen, nor what role he or she might play in executing that change.
The overall statistics regarding organizational change are generally not good. While American companies are the most adaptable in the world according to a wide-ranging study, they still do not perform particularly well with respect to organizational change. This is interesting in the sense that while we are learning a lot more about change, putting that knowledge into practice is not necessarily occurring as quickly nor as easily as one might hope. There is clearly more to learn about the execution of organizational change initiatives.
McDonalds
The second article, about McDonald's, begins with the premise that many people within the organization – franchisees – feel that the brand is on its last legs. The point out that 30% of the operators are insolvent, and that there is little changing at the company to address the changes in the external environment.
The company had instituted a turnaround plan, including things like all-day breakfast and digital ordering kiosks, did not address the core problems that the company is facing. The franchisees argue that the company is moving "from one failed initiative to another", stemming from the reality that the initiatives are not transforming the company in any meaningful way.
The company is facing a crisis, highlighted by the insolvency of so many franchisees and seven consecutive quarters of same store sales declines in the US. The response from the company has come with a number of tactical initiatives. Even when they are received well by the customer base, such as with the all-day breakfast, they create more costly, complex operations for the franchise owners.
The article showcases an approach to change that differs from the orthodox change strategies outlined in the academic literature. Tweaking aspects of the business will not impact on the brand's attraction to consumers, and in large part will not impact on the ability of the company to compete. The fast food space is highly-competitive, and many consumers have left the space altogether. The remaining players are fighting each other for diminished market share. McDonalds franchises are actually still the most profitable, but they are in a state of decline, and the brand is starting to show signs of age.
The issue here is that whatever changes management makes do not seem to have the backing nor commitment of the franchisees, who are the key stakeholders that need to implement the change. Thus, the change efforts are unlikely to succeed, if they are faced with this type of resistance. There is a lack of belief in the ability of management to understand the situation that it faces, and to solve problems creatively.
In essence, the McDonald's article serves an instruction purpose showcasing how not to change, especially when juxtaposed against anecdotes of successful change.
Cultural Intelligence
The third article, about cultural intelligence, Cultural intelligence reflects the drive among businesses to develop a workforce that can deal with people from various cultural backgrounds. This comes through in practical issues, such as understanding different communications styles, to more esoteric, high-concept things relating to one's ethnocentrism and that sort of thing.
The author argues that "those who work on global teams need to go through a cross-cultural teambuilding program in the formative stages of team development" in order to avoid miscommunication. This would include discussions about things like management styles, setting roles and standards and the development of a communication plan. Doing these things is said to result in a better team.
When employees work with specific countries, they need to receive in-depth training on that country. The reason is this – if someone interacts only occasionally with another culture, the people in that culture will understand that the person will not be fluent in their culture. But when someone works regularly with a culture over the course of years, then the expectations for that person change, and they are expected to have a reasonable amount of knowledge, at least enough to be able to close negotiations and maintain strong business relationships with that culture.
There should also be a global leadership curriculum. The idea here is that people who are anticipated and expected to take on leadership roles in an organization need to be trained to do so with the understanding that there will be international responsibilities, either dealing with different cultures or working overseas – a high level of global cultural competence is required of leadership in the modern organization.
The final recommendation contained in this article pertains specifically the training of expats. There is another level altogether when taking into account both living and working in a country. The training should be intense, and fully prepare the expat – and the expat's family – for what they will encounter while on an overseas assignment. There is a whole body of study around expat assignments, and this recommendation covers off the most cursory elements of what an HR organization might do.
All told, these recommendations focus on what contribution HR departments can make to ensuring that an organization is prepared to operate, think and work globally. The underlying assumption of the article that most people have a low level of cultural competence. This would seem pretty funny to anybody from a major cosmopolitan city, and one wonders what the role of recruiting might be, because you can literally get people who come with this sort of background – and let's be honest training programs do not address how to handle things in the real world. When there are challenges, one reverts to longstanding heuristics, and the author does not build this into his recommendations. The article of organizational change literally refutes the idea that you can simply train people and have them execute effectively, and yet that is what this author is recommending.
The articles are a little bit disjointed in the sense that the HR piece does not reflect on the other two, but the organizational change papers do fit together. The first one has a number of anecdotes about successful change programs, and best practices, while the McDonalds piece allows you to think about what ineffective change looks like – in this case tactical changes to address a strategic problem, and the poor communication of why those changes are needed, what they will solve. It really does come down to effective communication, though in the case of McDonalds there is a question of whether the different stakeholders are at all on the same page with respect to their visions for where the company needs to be.
References
Goodman, N. (2011) Cultivating cultural intelligence: The better a training department can capture, retain and disseminate its acquired cultural intelligence throughout the organization, the greater the strategic value it will bring. Training. Vol. 2 (2011) p.38. In possession of the author.

No author (2014) The change missionaries. Human Capital. In possession of the author.

Peterson, H. (2015) McDonald's franchises say the brand is in a deep depression and facing its final days. Business Insider. In possession of the author.