We currently live in an organisational world. Organisations are a vital part of our society and serve several important needs and demands. How an organisation is managed in relation to actions of management and the decisions made have an impact on all concerned including other organisations, the community environment as well as individuals. Organisations can be formal or informal. Formal organisations are planned and structured. They have policies, rules and regulations, concerned with co-ordination and their structure consists of objectives, tasks and goals.
Informal organisations are less formal in terms of structure. They are more loosely and flexibly structured than formal groups, They have additional channels for communication, are motivational and their informal activities can have economic consequences. Goals set by organisations can give an indication of an organisation’s character and are the basis for the policies and practices implemented and utilised. Goals should be carefully drawn up, understandable, subject to alignment and contain a time element.
Specific goals within an organisation add clarity and are generally group specific. Operational goals relate to the operation of the organisation i. e. how they run themselves and operate. The management processes and the choice of structure are set within operational goals. Structure within an organisation is imperative as it can affect productivity and performance, morale and satisfaction, and poor structure makes good performance impossible. Goals also serve as a basis for an evaluation of change. “Good organisation structure does not by itself produce good performance.
But a poor organisation structure makes good performance impossible, no matter how good the individual managers may be”. (Drucker in Mullins (2005) p597) NEED FOR ORGANISATIONAL CHANGE Change to some spells fear and apprehension of the unknown. Organisational change within a company is necessary and can be activated by the need to respond to new opportunities, new challenges and/or to respond to government legislation. External forces for change can be influenced by new technologies, competition, politics, legislation, tax structures, anticipation of future opportunities and market forces.
Organisational change within the Private Sector is necessary due to pressures from various environments. Some pressures for change can be due to changing patterns of work and the nature of the workforce, customer expectations and conflict within. Organisations must be able to change and adapt, if not they may be ripe for takeover, subject to supervision, become stagnant or in terms of a Housing Association for example, receive no Social Housing Grant. In order to adapt and promote change it is imperative to clearly define 1) the nature of any of the proposed changes and 2) the origin of the need to change.
The Decent Home Standard is a target which the government set in July 2000 to “ensure that all social housing meets set standards of decency by 2010, by reducing the number of households in social housing that does not meet these standards by a third between 2001 and 2004, with most of the improvement taking place in the most deprived local authority areas” (http://www. bankofgoodpractice. org/contentmanagement/documents/pdfhtmlfiles/FD7DF6AA-20ED-3428-8A3B720FC2698940. htm)l.
Political and economic pressures to change upon Housing Organisations have resulted in many areas of change; examples are Efficiency Gains and Decent Homes Standard. Within the Public Sector environment, Housing Providers have had extensive pressures put upon them since 1988 by the Government. The requirement to bring homes up to a decent standard was following the government identifying social housing properties were in very poor conditions and that an estimated i?? 19 billion was required to bring the properties up to a ‘Decent Standard’.
The prospect of providers borrowing money to bring their declining properties up to standard was not an option as borrowing on this scale would have vastly implicating effects upon public sector borrowing requirements and could also affect interest rates and lead to tax rises. One further example is due to the declining Social Housing Grant thus leading housing providers to draw upon private finance. In this environment, larger Housing Associations have found themselves to be in a better position due to a strong asset base and therefore are in a better position to raise finance.
Housing providers are under pressure to deliver value for money in management and development. There have also been pressures to develop and maintain existing stock. All housing providers registered with the Housing Corporation (including small associations such as co-ownership societies, co-ownership equity sharing societies and co-operatives) are required to comply with the regulatory code. A key component of the ODPM publication Sustainable Communities: Building for the future, February 2003 sets out the government programme for delivering sustainable communities for all by ensuring that all social tenants have a decent home.
This plan forms part of a wider strategy for neighbourhood renewal and sustainable communities. Tenants are at the heart of plans at all stages in the process, starting with the drawing up of options for investment. In order to achieve the targets, authorities need to: 1) Assess the level and type of disrepair within their stock, compared to the decent homes standard, and how much it will cost to bring homes up to standard 2) Use of analysis of the local housing market, particularly relating to demand and supply for council housing to decide whether and where stock should be demolished
3) Assess the options available to them for raising the necessary investment, to determine which are viable and which is the preferred option 4) Work to improve their repairs, maintenance and improvement services to ensure they are achieving the best value for money. (http://www. opdm. govuk/index. asp? id=1153924) For local authorities to raise sufficient investment for undertaking improvements to their housing stock the options available to them were: Setting up Arms Length Management Organisations (ALMO’s) Whole stock transfer to one or more new or existing RSL, attracting private finance from lenders.
Partial stock transfer to one or more new or existing RSL – attractive private finance from lenders Attracting income through the Private Finance Initiative * Maintaining stock and responsibility for management, and financing repairs through the Major Repairs Allowance (Repairs, Maintenance and Improvements). A Community Housing Task Force via ODPM provided advice to local authorities on the option appraisal process when considering their options. The resulting creation of LSVT’s, ALMO’s and Housing Companies created lucrative opportunities for Housing Providers and thus led to organisational changes to be implemented.
By embracing the concept of change and demonstrating willingness to do so, Housing Providers become attractive to other organisations and The effectiveness and organisational performance is dependent upon the successful management of the risks, challenges and opportunities presented in the external environment. A popular technique for analysing the general environment is a PESTEL method of analysis: Political future Legislation Government ownership of industry and attitude to monopolies and competition Relations between government and the organisation Political parties and alignments at local, national and European trading-block level.
Socio-cultural future Change in lifestyle Attitudes to work and leisure Green’ issues Health and Education Demographic changes Shifts in values and culture Distribution of income Economic future Inflation Consumer expenditure and disposable income Interest rates Total GDP and GDP per head Technological future Identified new research initiatives New patents and products Level of expenditure on R;D by organisation’s rivals Government and EU investment policy Speed of change and adoption of new technology Developments in nominally unrelated industries that might be applicable
Environmental future ‘Green’ issues that affect the environment Level and type of energy consumed – renewable energy? Rubbish, waste and its disposal Legal future Product safety issues Competition law and government policy Employment and safety law. (Management and Organisational Behaviour, Mullins L J, 2005, page 127) The six rules to Effect Change: Establish the need for change and ensure it is acceptable to all stakeholders Think through the costs and benefits Initiate the change through informal and formal change discussions allowing participation and feedback.
Encourage those affected to voice their concerns Be prepared to change yourself Monitor and reinforce the process. (Pugh “Understanding and Managing Organisational Change” I Maybey & Mayon O White (eds) Managing Change 2nd ed 1993). EXAMPLE: An example of a Local Authority who opted for LSVT is Redcar and Cleveland Borough Council who became Coast and Country Housing in 2001. The under investment by the Conservative Government had resulted in a backlog of repairs to Redcar and Cleveland Council’s properties. Their properties were in urgent need of improvement, refurbishment and repair.
When the Labour Government came into power and the subsequent Decent Home Standard was implemented they had no option than to seek funding privately via ALMO, LSVT or PFI. No fourth option was offered (Council’s were not permitted to borrow money as the Public Sector Borrowing requirement increase often can lead to increases in inflation thus resulting in a demand for higher taxes to cover spending). As Redcar and Cleveland Council did not have the funding to carry out the necessary work to bring their properties up to standard themselves, they had to carry out an options appraisal and ballot tenants.
The result was the LSVT and creation of Coast and Country Housing. The impact was huge and resulted in changes across the board including structure, culture, policies and procedures, service delivery, demographics, location of offices etc. IMPLEMENTING CHANGE How change is implemented is paramount. “Planned Change – Change that involves actions based on a carefully thought-out process that anticipates future difficulties, threats and opportunities” “Reactive Change – Change that occurs when one takes action in response to perceived problems, threats and opportunities”.
(Management, Bartol & Martin, 1994, Page 208) Effective management of change is a core and critical feature of organisational development. A planned implementation of change which some organisation utilise is Lewin’s three phase model is: Unfreezing – recognition of the need for change and reducing the forces that maintain the current form Movement – development of new attitudes or behaviour and implementation of change (new policies etc) Refreezing – stabilising change (are training, structures, new policies and procedures working?).
Check, review and re-examine how changes are being implemented. Mobilising Change: “Change is the drumbeat in any organisation. It is inevitable and so it is important you mobilise effectively to ensure success. Demystify – lack of clarity can create a ‘fog’ around your organisation’s purpose, position and philosophy. You need to ask ‘are we all clear about what sets us apart from the rest’. Think ‘outside in’ – check your alignment to your external environment and scrutinise your capability to meet the demands of all stakeholders.
Is everyone clear what to do in order to meet stakeholders’ future needs? How will you respond to emerging trends and uncertainties? Is your resource deployment plan clear and co-ordinated. Map the system – st Communicate and engage – explain any change that is taking place. Do this in a way that engages stakeholders and is emotionally compelling, to provoke thoughts and action from your audience. Check for consistency of understanding.
Performance not perception – establish a comprehensive set of measures to assess progress. Check that the performance management system gives objective feedback on how well the strategy is working from the perspective of the external stakeholder. Bear in mind that it is only through your proactive leadership and mobilisation of resources that you will deliver the most effective strategy and thus ensure you make a positive impact on those you serve”. (Inside Housing, Paul Oliver, Director, Conduco Consulting, Page 32, 9th December 2005). CONCLUSION
Change within all environments is inevitable, whether it be planned, reactive or to respond to legislative or economic pressures. How change is implemented is vital. There are very few working environments where change management is not important. Effective change implementation is important and consultation with all affected must be respected. Communication is the key element of change. It is essential to bear in mind that different people react differently to change, expectations need to be managed realistically and fear of change has to be addressed.
Change is a process and not a single act. It is important to monitor effectiveness of change within organisations, be prepared to review the process and measure the implementation against the expectations, directions and goals. “Change is a pervasive influence. We are all subject to continual change of one form or another. Change is an inescapable part of both social and organisational life”.Management and Organisational Change, Laurie J Mullins 2005 7th Edition p 909.
REFERENCES Internet Sources http://www. opdm. govuk/index. asp? id=1153924 http://www. housingcorplibrary. org.uk/housingcorp. nsf/AllDocuments/CEF96451D063E09180256FC70038BE1A http://www. bankofgoodpractice. org/contentmanagement/documents/pdfhtmlfiles/FD7DF6AA-20ED-3428-8A3B720FC2698940. html http://www. businessballs. com/organizationalchange. htm (accessed 4. 1. 06) Books Mullins L J, 2005, Management and Organisational Behaviour, FT Prentice Hall Pugh, 1993 2nd Ed, “Understanding and Managing Organisational Change”, I Maybey ; Mayon O White (eds) Managing Change Flynn N, 1990, Public Sector Management, Harvester Wheatsheaf Bartol K M and Martin D C, 1994, Management, McGraw-Hill Inc.