HANDOUT 1: Organisational Readiness for Change: A Case Study on Change Readiness in a Manufacturing Company in Indonesia Keywords: change readiness, perception toward change efforts, vision for change, mutual trust and respect, change initiatives, management support, acceptance, managing change. There are seven aspects of change readiness according to researches, which include perception toward change efforts, vision for change, mutual trust and respect, change initiatives, management support, acceptance, and how the organization manage the change process. At its core, change readiness involves a transformation of individual cognitions across a set of employees (Amenakis, et al.,1993). It is the people who are the real source of, and the vehicle for, change because they are the ones who will either embrace or resist change (Smith, 2005) Therefore, it is vital to assess individual’s readiness perception prior to any change attempt. The purpose of this article is to clarify specifically the seven aspects of an organization readiness for change and to measure each of these aspects in a manufacturing company in Indonesia. 1. PERCEPTION TOWARD CHANGE EFFORTS Employees’ perception toward change efforts that take place within the company is an important aspect of change readiness. Moreover, employees’ perceptions of the organization’s readiness for change have been identified as one important factor in understanding sources of resistance to large-scale change 2. VISION FOR CHANGE A vision states and clarifies the direction in which an organization needs to move. Without a sensible vision, a transformation effort can easily dissolve into a list of confusion and incompatible project and can take the organization in the wrong direction or nowhere at all 3. MUTUAL TRUST AND RESPECT Individual and organizational readiness and capacity for change needs to be based on a sound foundation of mutual trust and respect. It is important that a sufficient amount of trust is established to allow staff members to openly express dissenting views and compromise democratically. 4. CHANGE INITIATIVE Organizations are continually confronted with the need to implement changes in strategy, structure, process, and culture (Armenakis, et al., 1993). This is because the world has grown increasingly complex, resulting from the greater interdependence among world economies. 5. MANAGEMENT SUPPORT Management support for change efforts is an essential factor in creating change readiness. Armenakis, et al. (1993) revealed that the degree to which organizational policies and practices are supportive of change may also be important in understanding how an employee perceives the organization’s readiness for change (Eby, et al., 2000). 6. ACCEPTANCE Change should be able to improve the organization’s overall performance. However, for many employees, change can create feelings of uneasiness and tension, and as the change begins to take shape, organizational members may feel a sense of uncertainty and confusion (Bernerth, 2004). Because organizational change typically impacts how work is accomplished, an employee’s reaction to the specific type of pending change may also be important 7. MANAGING CHANGE Change would be hindered if there is conflicting programs in organization’s environment. Through program realignment, all programs and initiatives within an organization have to be managed to align with the ongoing change program. Measuring Change Readiness: A Case Study in a Manufacturing Company in Indonesia Method In measuring an organization’s readiness for change, a change readiness survey was conducted at Company X, a manufacturing company in Indonesia. A quantitative research used self-completed but structured questionnaires, where respondents’ names were kept confidential. This confidentiality allowed respondents to freely express their thoughts. Respondents were chosen through a stratified random sampling. Participants There were 153 employees participated in the survey, where male respondents dominated by 88%. Respondents were relatively young; about 40.3% were below 25 years old, 31.3% were 25 to 30 years old, 18.7% were 30 to 35 years old, 8.2% were 35 to 40 years old and 1.5% were 40 to 45 years old. About half of the respondents (51.9%) were high school graduates and one third of them (35.1%) held a bachelor degree. 9.2% of the respondents had diplomas, 2.3% had obtained either Masters or PhD and the rest of the respondents (1.5%) were junior high school graduates. Respondents’ work periods in the company were variable. 23.5% of the respondents have been working for less than a year, 36.4% for 1 to 3 years, 18.9% for 3 to 5 years, 7.6% for 5 to 7 years and 13.6% for more than 7 years. Their working experiences were also variable. Fresh graduates composed 34.8 % of the respondents, 29.5% responded the company as their second employment, 25% as the third employment, and 10.6% responded to have been employed more than 4 times. Aspects of Change Readiness Change readiness measurement was judged on a scale of 1 to 4 which covered 7 aspects. The first aspect was the perceptions toward change efforts, which discussed the employees’ attitudes toward the initiation of changes. The second aspect was the understanding the vision of change to measure how the prospect of change was well communicated and understood by the employees. The next aspect was mutual trust and respect, which assessed the amount of trust and willingness to work together with every member of the organization, including the organization leaders. Change initiatives measured how the organization members initiated the change. Organization would not be ready for change without the management support for change, which was the management’s commitment to be supportive and consistent in establishing changes. Acceptance to change defined how much change was accepted. Managing change assessed parameters that describe how to establish changes. RESULT Observing all seven aspects of change readiness obtains ranks as follows: (starting with the highest score): 1. Acceptance to Change 3.34 2. Change Initiatives 3.26 3. Managing Change 3.24 4. Management Support for Change 3.04 5. Perceptions toward Change Effort 2.84 6. Mutual Trust and Respect 2.82 7. Understanding the Vision for Change 2.46 Overall, Company X readiness index toward changes was 3,00 out of scale 4. Due to the higher index than the threshold (2, 5), it can be concluded that the level of readiness is READY. However, there was a chance where respondents missed or skipped certain questions (e.g. to remain unidentified) which caused fluctuations in the number of respondents’ answers. CONCLUSION When members of an organization are ready for change process, the change implementation will be easier for the change agents. Organizations consist of people, whose perceptions can facilitate or undermine the effectiveness of a change program. Change also needs vision and should be communicated effectively. Change initiatives should be made by creating a sense of urgency in the organizations. Managers need to help people to clearly see their role in new ways of doing things in order to build commitment to change. People usually afraid of the uncertainty they will face because of the change. In this situation, managers should give the people the opportunity to participate in the change projects and to give feedback. In a changing environment, the role of leaders is very critical in inspiring people to support and participate in the change initiatives. According to these following prospects, Company X has met the requirement to commence change successfully; therefore they have obtained the status READY to change. Issues which need further development in creating change readiness include improving understanding of change vision by doing more effective and consistent communication. Before implementing a change program, an organization should measure the readiness of its people based on the seven aspects, in which the aspects with low score should be given specific attention. By doing so, an organization will improve its readiness in implementing a change program. The case study discussion on the Indonesian manufacturing company should contribute to the better understandings regarding organizational readiness for change and its aspects and should become a foundation for a further research to the extended level of generalization.