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Management of change.

Change is difficult to bring about, yet it is crucial for the progress and sometimes for survival of an organization. Before the last presidential elections in United States, the key manifesto of President Bill Clinton during his campaigning was to bring about a change in the socio-economic structure of the American society.

Regardless of how far Clinton may have been successful in fulfilling his manifesto, the fact remains that the process of change is complex, and particularly in a Company involves significant human interaction. Before embarking upon the journey for change, even in a small organization, it demands detailed planning followed by well guided implementation steps.

The importance of affecting change and carrying it through successfully may be underscored by the fact that the progressive Pakistani companies send their senior managers on two to three day training courses especially focussed on managing change. However, I regret to mention that even major changes affecting the livelihood and future of a large workforce in our local organizations are made on ad hoc basis and in an unplanned and unstructured manner. We are well aware of the results of overnight nationalization of industrial and commercial units that took place in the 1970's. This process unfortunately is being reversed in 1990's, in a similar manner, directly and negatively impacting the constituency of employees of those organizations which were nationalized or are currently being privatized.

In the case of nationalization employees exhibited undue euphoria on this change. Thinking they had been exploited by the private employers in the past, and now as the new owners of these enterprises, were being liberated. By the time the folly of this attitude was realized, the die had already been cast for the majority of these organizations. Twenty years later, the same enterprises, are being privatized with similar haste and without due planning. Their new owners appear not to wish to retain the services of existing employees as they consider them non productive, lethargic, malingerers, quarrelsome, agitative and worse. They prefer to make them one-time handsome golden handshake payments, say good-bye and then get on with the task of hiring a new workforce of their choice which will hopefully come up to their expectations. I feel this may not be the most appropriate way of handling people directly affected by measures of privatization.

Monetary Compensation

Monetary compensation to separating employees may appear attractive now, but the value erodes quickly due to inflation and draw downs exhaust the corpus of funds due to large families that are supported by the employees. This adds to the state's level of unemployment and the rate of unemployment gets further exacerbated. I therefore, hold the view that apart from the surplus manpower in a given unit/plant, the required number of employees should be retained for continuity in the enterprise after its privatization. In order to properly prepare them for the change, that is to come with private ownership, the employees should be educated and trained well in advance to adjust to the new task-oriented environment that is being fostered. It should be the responsibility of the Privatization Commission to ensure that employees of a state-owned enterprise being denationalized are trained and motivated and be looked upon as valuable assets instead of a discarded and unwanted burden on the organization. The new owners willing to accept these employees without any bias or prejudice will signal a smooth transition towards a more productive and positively changed scenario. We should remember that the key to success of any enterprise has to be its people, who after all is the most critical asset and needs to be handled with care, and understanding for motivation to better productivity.

The Challenge of Change

I have briefly discussed below the difficulties encountered in the process of change and how they are overcome:

The need to change arises when the present condition is not satisfactory and a better future is aspired for. Once the present situation has been charted and the ideal scenario determined, the leaders of the organization need to identify the people, forces and systems likely to be conducive in helping the desired process of change. In the privatization process, influential forces that might be at play could be the Government, Privatization Commission and even the buyers of the enterprise.

Restraining forces could be in the shape of employees, labour unions and some of the stake holders. In order to achieve the desired change, the gap between the two has to be bridged and narrowed. Working without motivation in a static environment creates inertia and complacency amongst people. The employees of state-owned enterprises are inured to working in a relaxed, non-competitive and secure environment with little or no accountability. The compensation they derive for work is invariably more than their output. Their reluctance therefore is obvious. They are not in the right mind set to work in a competitive environment where the compensation can be more rewarding but their contribution to the organization has to be commensurately higher. Preparing the employees to be open and capable of change is a difficult task. But change becomes imperative not only for the job security of employees but also to ensure the long term health and viability of an organization. The process of educating the employees and the labour unions must start at least a year before the actual transition from state-owned unit to privately managed enterprise. The employees need to:-

* understand what's happening to them and how it can be better for them.

* work things through unemotionally and cognitively.

* be a party in shaping their own destinies.

If employees are to be convinced and taken along, the feeling of dissatisfaction with the status quo has to be identified in them and then they have to be made to understand that the benefits of change clearly outweigh the lack of potential for progress with the present conditions of employment. Thereafter, employees should be specifically trained in skills so that they are able to take up their challenging assignments with energy and vigour. Their new employer should look upon them as a thrusting and integrated part of the system and not as a spent force.

The leaders of the change process must take care of the critical factors which have been alluded to here for managing change in any organization. One can perceive and visualize the extent of responsibility which rests on the Privatization Commission for the successful handling of change that is implicit in the privatization process. In this process of change the employees interest has to be kept paramount and is the key variable in the success to managing change.

Parvez Rahim Corporate Industrial Relations Manager, ICI
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Title Annotation:Pakistan
Author:Rahim, Parvez
Publication:Economic Review
Date:May 1, 1994
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