In response to the scenario provided, the scenario represents one of the more extreme examples of organizational change. However, there are three months to prepare for the change which provides for some level of planning and facilitation for the change. This analysis will create a guide for attempting to meet the objectives of employee retention throughout the transition. There will undoubtedly be a great deal of employee resistance to change that manifests as soon as the news of change breaks. The leader will have to have all of the available information prepared including the changes impact on each individual's position, job requirements, and compensation among other factors. The leader will have to have an intimate knowledge of the new organization and its culture. The leader will also need to serve as a source of inspiration and provide a vision for the individuals as well as the collective organization as well as consider many tactical objectives that they will have to navigate.
The planning phase will be one of the most vital in the organizational change. The leader needs to fully understand the change to the organization and the individuals that constitute it before they can craft any kind of leadership strategy. The leader also needs to understand the new organization, its structure, and its culture so that they can understand and get a feel for what an ideal outcome might look like. During periods of organizational change, leadership is needed to provide the needed guidance to overcome the employee's natural resistance to change. However, the leader must have an effective plan and to be able to communicate this plan in the form of a vision.
Beyond the details of the employees' contractual agreements in the merger, which will be of vital interest to the current employees, there is also a need to understand the organizational culture of the new entity so the employees know what to expect in regards to the new environment. There will undoubtedly be some changes in the culture with the merger that will require some coping by the organization. Culture is a broad term that represents a concept of shared beliefs and values that can be found in an organizational setting.
Although organizational culture can be relatively abstract there are models that can help make this information more tangible. For example, Weisbord's Six Box Model is used in organizational diagnosis to structure the investigation and data collection into six categories; structure, relationship, rewards, leadership and a helpful mechanism (Paine, 2008). Each of these categories identified from an internal perspective such as employees or management or they and be determined from an external source such as customers, clients, or vendors. Once the source of dissatisfaction is determined and identified it is possible to take corrective action. However, this model does not take a holistic approach to determining items such as a gap analysis. However, these catagories provide an interesting way to rate and understand an organization that could be useful before the merger. It would give the existing organization a feel for the new organization before the transfer was made.
Figure 1 - Six Box Model (Everyone A Leader, 2009)
Leadership is the ability to influence a group toward the achievement of a vision or set of goals. The organizational object is already set. However the vision will be up to leadership to supply. A brief literature review was conducted to determine some of the leadership styles that have been identified to be effective in periods of organizational change. The transformational leadership model is one of the models that have proven to be effective; especially in periods of organizational change. The transformational leader is known for the ability to set a vision and inspire employees to work towards organizational objectives.
One definition of transformational leadership was proposed as the leader's ability to inspire organizational members to move beyond their immediate self-interests (Bass, 1985). A transformational leader can be exemplified by their capacity to create inspirational visions among their team members which affects them in such a way that they aspire to meet their full potential suggested (Judge & Bono, 2000). One way a transformation leader can create this type of motivation is by setting challenging expectations that will stimulate employees and led them to try to achieve higher performances (Bass, 1999). There are many ways to motivate employees, however the transformational leader will do so by other methods rather than just by compensation alone.
Bass later defined transformational leadership as a leader's ability to motivate followers beyond their direct self-interests (Bass, 1985). Bass (1985) suggested four main components of transformational leadership. The first type is idealized influence which refers to a leader's skills to uphold an idealized perception from their subordinates. The leader must be perceived as having a strong sense of dedication and a strong sense of purpose and perseverance. If the leader does not convey a strong sense of purpose then their vision will likely be unreceptive or not motivational. This concept can be exemplified by the adage "you should lead by example."
Second, inspirational motivation refers to a leader's ability to articulate an inspiring organizational vision which displays enthusiasm, optimism, and commitment to goals. This generally requires a measure of interpersonal skills and an ability to speak well in groups. It represents more of the delivery method while intellection stimulation represents more of the content of what's being said. Intellectual stimulation is a factor that refers to a leader's ability to encourage followers to actively question assumptions and look for creative solutions to various organizational problems. The fourth component is individualized attention which regards the leader's ability to give personalized devotion to team members. This will likely be one of the most important aspects of leadership throughout this organizational change as employees will likely be anxious about the changes and individualized attention will be necessary to address their individual questions. These four perspectives should be kept in mind before, during, and after the merger.
There are two main tactical considerations that should be considered during the transition. The first is the managing the knowledge transfer. The employees will have a various sets of knowledge that may or may not be transferable to the new organization. Knowledge transfer in organizations is the process through which one unit (e.g., group, department, or division) is affected by the experience of another which can also serve as a way in which this transfer can be measure through changes in knowledge or changes in performance though both approaches face many challenges (Argote & Ingram, 2000). When the two organizations merge, it is necessary to ensure that the individual employees are placed into positions in which they can be most effective. This perspective is valuable from various perspectives as the employees will likely be more satisfied if their skills are relevant as well as operate more effectively which will translate in a more efficient organization in general.
Knowledge can be stored within an organization in a variety of ways either formally or informally. However knowledge can also be present in networks formed by combining members, tools, and tasks. The recent trend in the field of strategic management has been to emphasize the role of organizational knowledge as a basis of the competitive advantage of particular organizations (Argote & Ingram, 2000). If the post-merger organization is to be effective in its new organizational objectives it is important to consider the role of managing knowledge throughout the transition. The perspective of managing knowledge could make the transition smoother for all stakeholders involved. If the knowledge management issue is not addressed then there is also the potential for employees and the organizations to lose knowledge about items of value to the organization.
Another tactical consideration will be the necessary training that will be likely needed for employees as they learn new positions, new systems, and operational procedures. For example, after the knowledge perspective is considered, there could be analysis that compared the knowledge base with the required knowledge base in the new organization. The difference in the skill requirements would represent something of a gap analysis that could represent the foundation of a new skill training program. For example, if the old organization used Oracle as a platform but the new organization used SAP then a training program could be designed to facilitate the employees when they transition to the new organization. The same requirements could be present for operational processes and culture as well and these should be considered as well. These are organizational change factors could represent the critical success factors that could make or break the merger's success.
The scenario represents one of the more extreme examples of organizational change. However, there are three months to prepare for the change which provides for some level of planning and facilitation for the change. Beyond the details of the employees' contractual agreements in the merger, which will be of vital interest to the current employees, there is also a need to…