Managing change in the business environment
Ronaldo C. Cabuang
Sr. Staff Engineer, Manila Electric Company
Ortigas Ave, Pasig City, Philippines, 0300
Email: rccabuang@usa.net
Daniel A. Pangan
Superintendent, Manila Electric Company
Ortigas Ave, Pasig City, Philippines, 0300
Email: dapangan@meralco.com.ph
Nature of Change
Why Change?
"Life used to be so simple"; this is specifically true with Manila Electric Company
(MERALCO). Although there are about 139 electrical distributors in the Philippines,
MERALCO enjoys its status as a virtual monopoly on electrical distribution in the Philippines.
Consider the following facts: in 1998 MERALCO maintained its position as the second biggest
firm in the Philippines in terms of gross revenues. It accounted for 23.1 billion kilowatt-hours or
62 percent of the total energy of the entire country. Although its franchise area is equivalent to
only three percent of the Philippines' total land area, it produces 49 percent of gross domestic
product (GDP).
So why change when things are going right for you? We all know that everyone of us is facing
the facts of life about change. We know that it is everywhere, it is constantly present and its pace
is accelerating. It is all around us in the seasons, social environment and biological process. The
very first breath we took depends on the ability to adapt from one to another that is dramatically
different.
Forces for Change
Organizations are also encountering a wide variety of dramatic changes. Some are faced with
regulation from the government, others experienced deregulation on their turf, some find their
market share dwindling down while others find themselves head-to-head with global
competition. In fact many organizations have experienced mergers or hostile takeovers,
producing nerve wracking psychological and economic effects on employees.
Take the case of the telecommunications industry in the Philippines some years ago. Before,
customers are literally begging the Telephone Company for connections. With the recent
deregulation of the telecommunications industry, customers can now choose from the many
companies, which they think suit their best needs. Now comes the imminent deregulation of the
electrical industry, truly we can say that MERALCO could not afford to be complacent in doing
business. It has foreseen that there is a need to implement major changes in order to stay
competitive. Not only did it implement changes on processes that are considered inefficient but
also made a bold move to change everything. This includes the redefining of the corporate
culture of the company. With these recent developments we can say that in order to survive it is
not a question of whether to change or not, but when and how to implement the necessary
changes effectively.
Resistance to Change
Change affects everyone. In so doing, it is natural to wish that the current changes never
happened, but we cannot wish them away so what normally follows is resistance to change.
Resistance in itself is neither good nor bad. It is a natural reaction to change, but the success of
any change efforts hinges on how well this resistance is managed and transformed into support.
It is very important to characterize the forms of resistance before attempting to manage it. The
three forms of resistance are:
- Logical Resistance - also called as the rational resistance. This resistance arises from the
need for time and effort to adjust to change being implemented. Also, included here is
resistance due to the perceived technical incorrectness of the system.
- Psychological Resistance - this is based on sentiments, emotions and attitudes. This arises
from the classical fear of the unknown. Also, this type of resistance arises when employees
feel that their security or self-esteem is threatened. Although management feels that this type
of resistance is irrational and would have no justification, they should deal with this and
manage it properly.
- Sociological Resistance - also called resistance due to group interests. This resistance arises
due to the social values of people involved where they perceived that their group interests are
threatened. This type of resistance should also be considered since group values are powerful
forces. Resistance encountered with this type causes a lot of nuisance during implementation.
AM/FM/GIS Project
Implementation
As MERALCO saw the need to institute changes, it envisioned different corporate programs that
would improve the efficiency and quality of service. One of these projects is the implementation
of an AM/FM/GIS system. As early as 1992 the company had embarked on an AM/FM/GIS
project in a pilot area system implementation, it didn't materialize because of time and cost
constraints. But in 1995 our mapping team decided to automate the primary maps using an
incremental approach. Gradual transfer from a manual procedure to an automated one proved to
be very beneficial. Using this approach we have prioritized which key areas should be automated
first thus, lessening the complexity of its implementation. This lessened the impact on
operational matters, particularly on our internal customers who rely on our manual maps. We
were able to migrate into an automated system without much disruption on our day-to-day
activities.
In 1996, with the help of a business consultant, the company started to initiate different
information systems. One of them was the scheduled implementation of the AM/FM/GIS project
in late 1997. During the initial stages of the project it used the data from the automated primary
mapping system as a springboard in the implementation process. After the data was completely
transferred, middle management then decided to implement a cutover procedure whereby
stopping the use of the automated primary mapping system and completely migrating to the new
AM/FM system. At this stage is where we have experienced resistance from users.
Resistance Encountered
Change is present in our daily activities that we hardly notice it, not even the resistance that
accompanies it. Personnel are willing to accept that change is constant and an everyday event.
While change is continual, it is hardly welcomed. When change becomes rapid and enormous,
the resistance becomes more noticeable and harder to manage. In this case there are broad
reasons on why employees resist the changes being implemented. For one, they may not be
comfortable with the changes being implemented. Like in the case of the draftsmen, almost 50%
of them have been with the company for more than ten years. They were used in doing updates
on manual maps, that they are reluctant to exchange the comfort of familiarity with uncertainty.
They may not be comfortable with the change itself, especially at the time when we have just
recently implemented the automation of primary maps. Employees feel that it is just now that
they have adjusted themselves with a major change and here comes another change being
implemented. Others may feel that the decision for this change is technically incorrect and this is
especially true for the end-users of the system.
Another major reasons why we have encountered resistance came from the method by which the
change was introduced. Majority resisted because they feel that they were not been properly
involved in the change process. Some are annoyed in situations where they are ill informed while
others simply resist an authoritarian approach.
During the implementation of our project, personnel did not agree on both the nature of change
and the methods used during the implementation, thus it proved doubly hard for us to manage
employees resistance to change. As the saying goes "The way that people feel about a change
determines how they will respond to it".
