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International HRM Day 5 – Managing Change & Knowledge Wednesday 22nd February 2017 Paul Hunter Email: [email protected] Day 4 Recap  Critical need for global staffing – creation of strategic value, however can be a complex and problematic process.  MNC staffing policies – ethnocentric, polycentric and geocentric.  Expatriates and their role as knowledge agents – management of relationships, psychological contract issues. Experiences associated with being an expatriate.  Role of flexpatriate – shorter assignments, up to 3 months, short notice travel. Managing Change & Knowledge IHRM Considerations “Management and change are synonymous; it is impossible to undertake a journey, for in many respects that is what change is, without first addressing the purpose of the trip, the route you wish to travel and with whom. Managing change is about handling the complexities of travel. It is about evaluating, planning and implementing operational, tactical and strategic journeys” (Paton et al, 2008)  Change: There Will Always Be Change…. - is not new - will not go away - is a challenge - can be managed - should be a way of life - should be welcomed (Paton, 2008)  Within most organisations, change is inevitable, particularly for those organisations who want to compete in a dynamic global business environment.  Change can occur internally within organisations re structures, processes or practice reviews or they are governed externally i.e. by regulator or technological changes. (Beech & MacIntosh, 20 12) Change Failure  Organisational change is increasingly the norm, yet the high levels of failure indicate that effective management of these changes is an issue.  Do HR and organisations anticipate and understand the concepts of change? • A poll by Prosci in 2012, showed that 80% of organisations experienced confusion about the concepts of change and change management. • In 1996, John Kotter published ‘Leading Change’. His research revealed that only 30 percent of change programs succeed. (M cKinsey, 2009) Key Drivers of Change  Consider your MSc learning to date, what are the key drivers of change within an organisation today?  Characteristics which are key for IHRM: Organisational Perspectives Management Perspectives Globalisation People Technology Skills & Performance Competition Resources Government & Legal Design & Operation Working patterns Rate of change Cultural & Lifestyle Typical Internal/Strategic Change Initiatives Leadership changes Merger or Acquisition Organisation structure changes Strategic changes Technology changes Cultural changes Global expansion Preconditions for Change  Organisations need to ensure that they understand the reasons behind the change: • Why are we undertaking this change, what do we plan to achieve/get out if it? • What will happen if we don’t? • What current problems will it and won’t it solve? • What potential new problems could it create? • Why is now the right time for this change? • What are the risks involved?  inhibiting factor Group Exercise In your teams discuss scenarios in which you, personally, have experienced change. For example, during your time in Scotland, have you felt the pressure to “change”, or “adapt” your values, attitudes and/or behaviours? Why? Have you found the experience p ositive? Challenging? Stressful? Upsetting? Why? How have you responded to this change? PERSONAL DEVELOPMENT AND SELF -IMPRO VEMENT MAY INVOLVE CHANGE THAT REQUIRES A REASSESSMENT AND RECONFIGURATION OF PRE -EXISTING VALUES AND BELIEFS, WHICH CAN BE STRESSFUL. AS POTENTIAL HR PROFESSIONALS YOU MUST REALISE THAT CHANGE INITIATIVES MUST BE DESIGNED AND IMPLEMENTED SENSITIVELY, CONSTRUCTIVELY AND COLLABORATIVELY. People’s Resistance To Change  HR need to be aware of ‘people’s resist ance to change’. Some typical reasons for this: • Self interest (human needs?) i.e. unwillingness to let go; • Concern over skills and training; • Lack of confidence/lack of understanding & knowledge. • Awareness from Hofstede’s ‘Power Distance’ and ‘Uncertain Avoidance’ theories. • John Kotter discusses how to deal with resistance to change. Do you agree with his views? The Change Curve TIME Completion Change Point Denial Application Blames self/others Development Confusion Acceptance Immobilisation The Change Curve Change Point Description Immobilisation People need time to get used to the new situation, support and understanding this is a natural response Denial People need patience, clear directions and allowance to explore their own approach to things Frustration Tolerance, encouragement to think Acceptance Acceptance, reassurance that it is ok to do things their way Development Support and encouragement that they can succeed Application Encouragement to take responsibility Completion People are now competent – good management practice Reaction Behaviour Shock, Disengagement (withdrawn)  Taking the path of least resistance  Believe the change won’t happen or at least won’t affect them Denial, Disorientation (confusion)  Have lost sight of where they fit in  Know what they are but don't know what the organisation has become High Emotions: Anger/Disenchantment  Outwardly display anger which maybe masked feelings  Blocked and energy goes into preserving the block Sadness/Anxiety  Exposed and vulnerable  Feel something they identify with has been taken away  Put in the time but not the energy  Keep a low profile  Don't ask questions  Refuse to be drawn into conversation about the change  Asks lots of questions  Unsure  Focus on details  Do not prioritise  Don't understand the goals or direction  Communicate the negative  Enlist support against the change  Refuse to talk about it  Blaming others  Sulking  Reminiscing and dwelling on the past  Go back to how things were  “its not fair” or “it won’t work” HR – The Change Advisor  Normally the remit of the HR Director, particularly in the case of a large organisation change.  Has the ability to influence all key stakeholders within an organisation.  Will work with internal stakeholders (particularly the change agent), through the process of designing and implementing change, challenging and guiding them to get it right.  Ensures that issues e.g. organisation redesign/restructure and due process are appropriate and effective through and after change. Change Management is seen by some to be a core skill requirement for HR. HR Benefits of Successful Change Management  If change is successfully implemented there can be many benefits and a reduced impact of risk :  Organisation performance & productivity improvements;  Rise in engagement and morale;  Better team working;  Increased reputation. HR Issues of Unsuccessful Change Management  However if change is not implemented properly, a number of areas might be damaged and therefore increased risk occurs : • Reputation; • Morale; • Resource(s) alignment issues. HR Questions • Do senior management understand the full potential, impact and effect on their long term strategy? • Impact of the needs, skills and culture of the organisation and it’s people? • Which aspects of our culture will help support/hinder the change? • What has our history of change been; do we tend to embrace or resist it, where or when does change tend to get stuck and why? • What are other threats to success - how can we mitigate them? HR Need to Respond to the Emotional Journey  Need to understand what local and international staff might experience and consider: • How are people reacting to the changes/resultant implications for them? Are the reactions different in foreign offices? • What do staff believe they are losing and what do they believe they might gain? • How clear is it to them what will change and when? • How and when will they start the transition to the new role/tasks they might have to do? How can we support them? • Will the change work globally? If not, what other options do we have? HR – Understanding System Implications  HR need to ensure that, dependent on the scale of changes, they understand and review how this effects existing HR policies, systems, processes and structure.  Questions to consider: • Have we got the structure right? • Are our HR processes fit for future purpose? • Will our HR systems deliver what is needed? • When realigned of HR processes and fit occurs, will it achieve the goals of the change? • Above all, do our people understand what they and others have to do in the changed environment? HR – Champions of Change  HR must ensure they have the skill, knowledge and credibility within the organisation to act as “ champions of change ”.  A long term sustainability of a change, through effective design and delivery of learning initiatives, is required.  The key for HR is to build credible relationships throughout the organisation which enable them to anticipate change and be involved from the very beginning.  A ‘Communication Plan’ is vital. HR – Champions of Change  HR must ensure that they are involved at the initial stage of change and do the following: • advise senior management of the current skills within the organisation; • assess the impact of change in one area/department/site on another part of the organisation – develop requirements for training; • are being used to communicate and negotiate change, engaging with various stakeholders, understanding their concerns; • help pe ople cope with change; • develop/implement a change management toolkit. Managing Change & Knowledge Importance of Knowledge Management from an IHRM perspective Importance of Knowledge Management  Effective knowledge management is important both to exploit existing capabilities on a global scale and to explore new ideas that can be developed into new product and service offerings.  Companies easily fall into the trap of not managing knowledge or focusing too much on one aspect of operation at the expense of the other.  Implemented HR practices can enhance knowledge sharing. Includes developing processes for exploiting existing knowledge and exploring new knowledge.  Will help the development of change within organisations. Knowledge Sharing in MNCs  Knowledge sharing in MNCs is facilitated by cross -unit social capital, organisational values of collaboration and sharing, and global mindsets.  MNCs need to establish effective ways of accessing and retaining external knowledge.  Both explicit and tacit knowledge are important to MNCs. Explicit & Tacit Knowledge  Explicit knowledge: • knowledge that individuals and organisations know they have – i.e incorporated in texts and manuals (organisation documentation) , and relatively easy to pass on to others. • most knowledge stored in IT databases and systems is explicit.  Tacit knowledge : • personal, context specific and hard to formalise and communicate. Individuals may even not be conscious of it. • Tacit knowledge often underlies complex skills and is fundamental to the intuitive feel acquired through experience. Tacit Knowledge – Make It Explicit  Invest in making tacit knowledge explicit, (Nonaka, 1994). • Individuals explain tacit concepts that are otherwise difficult to articulate by conveying ‘intui tive images’ that people can understand. • But must know the type of knowledge that is accorded high value and how it will be made accessible. Assessing the Effectiveness of Knowledge Sharing  Knowledge sharing in MNCs is often influenced by: • the ability/understanding and willingness of the source to share knowledge (sender); • the ability and willingness of the receiving unit to absorb knowledge (receiver); • the characteristics of the relationship between the sending and receiving units. • Consideration of personal threats imply impact of knowledge sharing. Stimulating Knowledge Sharing  MNCs can make knowledge sharing effective, efficient and fast by: • disseminating information about superior performance and knowledge; • selecting expatriates/flexpatriates with knowledge sharing in mind; • designing appropriate structural mechanisms; • building a conducive social architecture. HRM Practices to Motivate & Absorb/Share Knowledge  Developing appropriate HR pra ctices i.e. recruiting people with required skills and knowledge who can communicate/coach others.  Investments in training & development of employees can also contribute, as training enhances the quality of human capital needed to achieve the knowledge go als of an organisation.  Performance management systems - feedback and direction for enhancing their competencies to meet the organisation’s knowledge needs. Gaining Access to External Knowledge  Turning new knowledge that has been acquired from outside the corporation into a commercially viable innovation involves capabilities in assimilating and recombining that new knowledge.  The levers that MNCs have at their disposal to enhance cross - border knowledge sharing are also relevant for external knowledge acquisition.  However, firms may use additional approaches to access knowledge from the outside: • scanning or tapping into the lo cal knowledge base; • partnering or merging with other firms; • playing the virtual market. Global Knowledge Management Case Study Review Global Knowledge Management - Case Study Review 1. Evaluate P&G’s approach to managing knowledge and innovation. 2. What are the barriers that a multinational organisation has to overcome to harness the potential of a Connect + Develop model? What are the implications for HR? Day 6 – Thursday 23rd February The Dark Side of International Employment IHRM Assignment Question