Change Management sample

In this concern, one key issue confronted by most organizations, especially multinational organizations is to apply change in an organization that could be done with the help of different approaches like top-down and bottom-up approaches to change as discussed here in this paper with an analysis of real-world case studies of multinational organizations.

Change in Business Environment

As per the statement given “Change is only a constant factor in the otherwise volatile world of business”, it is apparent that everything in this volatile world of business is changing and in turn has evolved to change as a steady factor for businesses. The key drivers of change are three major developments of the world. The first one is technological developments that have made it inexpensive for firms to prepare information and distribute it (Cameron & Green, 2009). A second development that affected business is globalization. With globalization, the world has evolved as a giant marketplace. Now, companies like General Motors not only need to think about how Ford and Chrysler are doing, but also about Toyota, Volkswagen, and BMW’s performance at the global level (Daft & Marcic, 2010).
 
The third significant change that occurred throughout the world regarding the business environment is the concentration of power in specific market investors. Due to this relationship between the company and its investors is also changing. Global competition and the demand of customer from companies to become more responsive and efficient is also driving significant change that in turn affects businesses to make changes in their business strategies and approaches, structures, cultures, etc (Marwah, 2011).

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Change Management

With ever-increasing changes in the business environment due to the different developments, now most of the businesses are confronting issues related to change management (Daft & Marcic, 2010). Till now, firms operating on conventional business practices are facing the need to change their overall approach and become more efficient by offering high-quality products and different professional services. This could be done with the help of change management that could be done by applying two key approaches to change management that are top-down and bottom-up approach to change management (Paton et al., 2008).

Top-Down Approach to Change Management:

A top-down approach to change management focuses on the need to implement change, as an initiative that comes from the company’s top. It concentrates on making use of decision-making that is centralized at the company’s higher level. In this lower-level employees are excluded from the change process, whereas they are directly affected by this. Top-down changes pertain to making changes quickly and deal with the issues only if it is essential (Butler et al., 2008). Some key elements of this approach used by organizations are leadership development, training, social responsibility initiatives, equal employment and zero tolerance policies, recruitment and retention programs, connecting diversity to business aims, and culture-change efforts (Cameron & Green, 2009).

One other leading multinational firm that once made use of a top-down approach is Ernst & Young, which is one of the leading professional service firms throughout the world. The company made use of a top-down approach to manage its 400 security consultants all over the world but was not able to do so due to the underlying limitations of this approach. The company used it to manage all its security consultants with an aim of creating a collaborative culture but was unable due to the involvement of lower-level employees.
 
In this approach, all change decisions were taken at the top and then communicated to lower-level employees. Everyone was not involved in company change efforts and most of the time message delivered was changed by the time it reached at lower levels. Several times, the issues were misunderstood due to the lack of effective involvement of all employees (McLean, 2005). In regard to the limitation of this approach, the company started confronting issues and was not able to implement planned changes so finally; it decided to switch to a bottom-up approach.Subsequent to the discussion of real-world case studies, it becomes evident that the use of top-down approach is not appropriate for contemporary change management projects. Its failure in different firms like New York Times, Tribune co., Ernst & Young, etc. is all because in this change management approach, change relies on one-way, intellectual, and conventional approaches (Jacobs, 1997). In a top-down approach, decision-making is limited at the top level of the company, and there is a lack of information, recommendations, and ideas from the lower-level employees who usually come in contact with customers and know their needs in a much more effective manner (Green, 2007).

Another key limitation of this approach is ineffective employee motivation and performance which is all due to the lack of involvement of lower-level employees. Without effective motivation, it is not possible to implement change throughout an organization. In a top-down approach, there is very little task delegation, due to which lower-level workforce is not able to give their feedback as well as may also feel incompetent (Butler et al., 2008). This approach also directs firms toward misunderstanding due to a lack of effective communication and adequate information exchange between all levels of hierarchy (Sharma, 2006).

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Bottom-Up Approach to Change Management:

The bottom-up change management approach implements change from the bottom to the top of the company. This approach tries to involve all those who would be affected by the process of change. It is done with an aim of avoiding future issues in regard to implemented change by appropriating individuals to get involved initially (Green, 2007). Whenever a firm wants to indulge in innovation, the use of a bottom-up approach is much more effective. Successful innovation is usually participative and depends on different types of ideas by involving all individuals working at different organizational levels.

The use of this approach helps in developing an environment of innovation, which in turn makes it easy for a firm to change successfully. Use of this approach helps an organization in taking advantage of collaborative decision-making, thereby directing it toward assured success (Daft & Marcic, 2010). The key elements of this approach are:

• Focus on the individual: By identifying that change takes place one person at a time and as everyone is different in a firm, a bottom-up approach helps in developing different learning solutions and strategies by encouraging all to indulge in the change process (Butler et al., 2008).
• Accountability at all levels: Usually accountability is seen as the key responsibility of senior management and HR, but the use of a bottom-up approach puts the burden on each employee to understand his/her role in implementing change initiatives.
• Community building: In every large firm’s culture there are different sub-cultures. In this type of environment one-size implementation will not fit. The use of a bottom-up approach helps every distinct community to interpret the top-down message and develop their specific diversity and inclusion strategies coherent with the organization's will and intent (Elearn, 2007).
• Leaders as teachers: With the use of a bottom-up approach, every leader in the organization, from the team leader to the company CEO works as a teacher, both formally and informally. Here, leaders help employees to learn all essential skills and implement change in an effective manner.

Due to the significant advantages of this approach more and more companies are moving towards the use of this approach in comparison to the top-down approach. One of the leading professional service firms that switched from the so-called top-down management style to bottom-up management is Ernst & Young. The use of this approach at the company helped it become the world’s leading professional service firm and implement different types of change in effective manner through different elements of the bottom-up approach.

Other well-known multinational firms of the world that implemented bottom-up approaches to change management are Toyota and IBM. The use of this approach at Toyota and IBM helps them implement different changes in an effective manner by focusing on individuals and dividing accountability at all levels (Green, 2007). This is not the case with the top-down approach. Involving lower-level employees helps both of these firms become more innovative as these employees are much more aware of customers' needs and desires and are better able to suggest innovative ideas related to change (Lister, 2003).

Another key benefit of this approach to Toyota and IBM is involving all people and avoiding future issues and challenges related to employees’ resistance. With this approach, all employees are involved in the beginning so that, they cannot feel discouraged and work with more enthusiasm towards change management goals. Although the use of this approach is effective still, it also has some specific limitations if used alone like it could direct towards a loss of focus in the absence of overall metrics, encourage the contradictory application of the corporate policy, etc (Zlotnick & Hinojosa, 2004).

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Conclusion and Recommendations

With the help of the above discussion, it becomes evident that in the present volatile business environment, change is constant and needs to be managed through effective approaches like top-down and bottom-up approaches. The use of these approaches if done alone would not direct a firm toward successful change implementation so, it is essential to make a combined use of these approaches. In regard to attaining significant improvements in an organization's performance and change management, it is essential to combine these two approaches (Miner, 2007).

The top-down approach creates focus and the terms for performance improvement. This, if integrated with a broad bottom-up performance improvement, would help in allowing individuals to get people from all levels to take a fresh approach to resolve problems and improve performance (Elearn, 2007). The best way to integrate these approaches is to consider a firm as a learning organization, in which people are interconnected as well as supported by leaders (Lister, 2003).

References

• Butler, C.J. et al. (2008) Road Pricing, the Economy and the Environment. Germany: Springer.  
• Cameron, E. & Green, M. (2009) Making Sense of Change Management: A Complete Guide to the Models, Tools and Techniques of Organizational Change. 2nd ed. USA: Kogan Page Publishers.  
• Daft, R.L. & Marcic, D. (2010) Understanding Management. 7th ed. India: Cengage Learning.
• Elearn. (2007) Change Management. UK: Routledge.  
• Green, M. (2007) Change Management Master class: A Step-by-Step Guide to Successful Change Management. USA: Kogan Page Publishers.

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