"Building A Culture For Sustaining Change" Simulation

"Building a Culture for Sustaining Change" Simulation

Carl V. Gibson

LDR/515

Bruce W. Webb

June 8, 2007

Abstract

To see success in the CrysTel initiative, a new frontier in understanding organizational change is necessary to translate successfully implemented changes into real organizational benefits. This can be accomplished through a systematic analysis of "cross level linkages," connections between departments or business units and the organization as a whole. This paper will present three leadership theories believed to be most effective for CrysTel's change initiative. Each style will be compared to others chosen and some not chosen. Strengths and weaknesses of each style will also be presented as will recommendations for further success.

"Building a Culture for Sustaining Change" Simulation

Achieving organizational change that produces real results is not just a managerial challenge; it is also a cognitive challenge. As Peter Senge stated in an article on leadership "deep organizational change requires a change in people. Redrawing the lines and boxes in your org chart without addressing the way people within the organization interact may be like rearranging the deck chairs on the Titanic" (1996). Leaders find it easier to address tasks rather than the complex dynamics of human interactions. The outcome of which is a focus on the short-term and local not the longer-term and global results from change.

Since managers cannot manage what they give little attention to, a paradox is widespread across all forms of organizational change: changes that successfully improve performance in one part of the firm often fail to translate into gains in firm level performance. This is the challenge in the simulation this paper will address.

A leader can choose from a variety of approaches, each effective in different circumstances. This paper will present three leadership theories believed to be most effective for CrysTel's change initiative. Each style will be compared to those chosen and some not chosen. The recommendation is to use a combination of all three theories to address the environment at CrysTel. Strengths and weaknesses of each style will be presented as will challenges with the recommended approach, and recommendations for further success.

Leadership Theories

Contingency Theory

The Contingency model was coined by Fred Fiedler in 1967. This model states that the leader's effectiveness is based on situational contingencies defined by two aspects--leadership style and situational favorableness (Miller et al., 2004). This model utilizes an instrument to measure an individual's leadership orientation. The scores are ranked and leaders defined as low-LPC or high-LPC leaders. Low-LPC leaders are motivated by task oriented activities and are most effective in extreme situations (favorable or unfavorable). High-LPC leaders are motivated by relationships and are most effective in situations with intermediate favorability. Fiedler's theory is the idea that leaders have natural styles and, consequently, companies need to change the leader's environment to suit that style (Kreitner & Kinicki, 2003).

Situational Leadership Theory

The Situational Leadership model focuses on analyzing the situation and adapting leadership style to match it. It was developed in the 1960's by Hersey and Blanchard and is a theory which emphasizes follower development. In this theory the leader analyzes the situation, considers the development level of the follower, and then adapts a task or relationship oriented style (Hersey and Blanchard's situational leadership, 2007). This theory is recommended to be used along with Fielder's and Senge's theories to best lead CrysTel through the change.

The Learning Organization (Systems Theory)

Peter Senge's theory stresses the importance of recognizing that an organization is composed of circular relationships rather than linear. Senge argues that organization's can no longer utilize a traditional leadership model but must "gain the commitment of employees at all levels and continually expand their capacity to learn" (2007). He argues there are five disciplines of the learning organization: systems thinking, personal mastery, mental models, shared vision and team learning. Mastery is never achieved under this model but successful organizations practice them on an ongoing basis.

Justification

CrysTel's marketing and sales departments were identified as the most problematic. The marketing department showed significant weakness in the areas of: employee and senior management communication, team empowerment, and employee mentoring. The sales department showed weakness in the areas of: leadership, risk taking, and ability to resolve conflicts. These areas were responsible for employee absenteeism and turnover as well as lack of employee motivation. The simulation was a situation with extreme resistance to change. By using certain aspects of the above mentioned theories it is believed that the organization will be able to effectively navigate the change.

Leadership at CrysTel tended to be low-LPC which is the most effective style for the situation under Contingency Theory. Contingency Theory also requires a leader to focus on leader-member relations which was seen in the implementation of a mentoring program, a focus on effective and constant communication, and a feedback program. Success of the project can be further ensured by utilizing skills from this theory through achieving the task while building relationships. The Contingency Model along with Situational Leadership theory presents a good combination of styles to create change within the organization.

Following Hersey and Blanchard's model the initiation of employee satisfaction and climate surveys, management was able to consider the situation prior to deciding on intervention strategies. This model focuses on relationship building which will be helped by the ongoing communication, employee involvement, and training initiatives implemented in the simulation. Combining these skills along with Senge's theory will further strengthen the likelihood of success.

In