An Investigation into the Impact of Organisational Change Strategy on Employee Morale and Performance at Company X
IntroductionOrganisational change usually occurs in response to internal or external factors that can affect the organisation's sustainability such as new market entrants, disruptive technology, competing products, or declining profitability that prompts a review of the organisation's strategic goals and plans. While the organisation undergoes change, the individual employee is ultimately forced to change as they participate in various change initiatives. The uncertainty that can be created by the change can have a detrimental impact on employee morale. Organisational change usually results in a clash between the commercial aspect and its people aspect, thus change will not be successful if managers disregard the people elements of change (Brown, 2011:167) This study analyses the various organisational change strategies that are typically used by change agents to effect change and investigates which change strategy has been adopted by the non profit manufacturing organisation under review.Background to the StudyThe company which was established in 1994 is a manufacturer of plasma derived pharmaceutical products. The organisation is the largest fractionation company in Africa and the sole supplier of some of the plasma derived pharmaceutical products sold in South Africa. The growth in market demand for plasma derived products and the consequential need to increase production capacity to meet this demand resulted in an increase in the workforce from 198 to 250 in the last five years. As a pharmaceutical manufacturer the company is required to comply with current Good Manufacturing Practice (cGMP) which is the accepted industry standard for pharmaceutical companies (World Health Organisation, 2014:79) Improving the level of compliance has necessitated in the installation of new sophisticated plant and equipment, recruitment of highly skilled employees, and more focused technical training programmes. In spite of these initiatives, the organisation has experienced disruptions in its supply chain which has impacted on product availability. The pressure on employees to meet high product demand had negative consequences such as production losses. Inadequate management oversight compounded these problems resulting in decreasing employee morale. The other challenges faced by the organisation that prompted the organisational change strategy included the difficulty in maintaining routine manufacturing operations while simultaneously planning for an expansion project. The leadership was faced with the challenge of rectifying current operational problems while developing plans to address future growth requirements. The organisation embarked on a restructuring program initiated by the Chief Executive Officer (CEO) by rearranging several departments such as moving the Planning and Logistics department from the Manufacturing division to the Finance division to increase efficiencies while enhancing management oversight.The new structure has been partially implemented with changes in scope of control for some of the affected Senior Managers. The remaining structural changes will be implemented when the new managerial posts created to separate manufacturing operations and supply chain management have been filled. In addition, the organisation implemented a new performance management system to drive the behavioural changes to support the change strategy. An external consultant was engaged to implement the performance management system for managers and supervisors. The performance management system will be rolled out to the remainder of the employees after a period of one year. Managers and Supervisors have been faced with dealing with the organisational changes and the implementation of the performance management simultaneously which could lead to stress. The organisational changes created uncertainty and mistrust. Thus management engaged the performance management consultant to conduct a change management survey and facilitate change management workshops.