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Procedia Economics and Finance 4 (2012) 140 – 148

International Conference on Small and Medium Enterprises Development with a Theme (ICSMED 2012)

Creating A Meaningful Planned Change Banowati Talima* a

Business Administration Study Program, Faculty of Social and Political Science, Parahyangan Catholic University, Bandung, Indonesia

Abstract The purpose of this study is to analyse what factors influence to create meaningful of a planned change perceived by all member in the company, analyzing the influence of leadership in realizing of a meaningful planned change, and analyzing ealize better planning quality. The results show that the meaningful planned changes significantly affected by the initiation of change which is showed a manifestation of an effective leadership role in the planning process. This indicates that the workers have not become an independent worker, and still depend on the leaders. Surprisingly, resource availability bring an paradoxical situation, because its existence would negate the effect of initiation of changes in creating a meaningful planned change. The initiation of the changes is significantly influenced by the leader's capabilities and competence of workers, both in production and marketing area. © The Authors. Authors. Published Published by by Elsevier Elsevier Ltd. Ltd. Open access under CC BY-NC-ND license. © 2012 2012 The Selection and/or peer-review under responsibility of Parahyangan Catholic University. Selection and peer-review under responsibility of Parahyangan Catholic University. Keywords: meaningful planned change management, leadership, spirit of togetherness, spirit of innovative learning, self efficacy, awareness of change, aspirative orientation, ethical orientation.

1. Introduction Change in the information age today are thing that can not be avoided anymore. Managing change starting from determine the direction of change, then set the ways to achieve change objectives. Gardini, Giuliani, and Marricchi (2011), argued that successful transformation happens and that employee remain engaged in the long term when company implement change by focusing on the employee who have most influence over the daily work that needs to change.

* Corresponding author :[email protected].; [email protected]

2212-5671 © 2012 The Authors. Published by Elsevier Ltd. Open access under CC BY-NC-ND license. Selection and peer-review under responsibility of Parahyangan Catholic University. doi:10.1016/S2212-5671(12)00329-2

Banowati Talim / Procedia Economics and Finance 4 (2012) 140 – 148

Research on the planned changes have been done in the last decade, Jian GW., (2007) in a meta-analytic studies indicate that the study of the changes includes many aspects, as indicated by the effort to change the organizational culture of the 1980s (Deal & Kennedy, 1982), re-engineering the organization (organizational reengineering) proposed by Hammer and Champy (1993), and changes that possible by technological developments, such as those encountered during the 1990s. Experts refer to issues ranging from content of changes (Burke & Litwin, 1992), the context of changes (Fox-Wolfgramm, Boal, & Hunt, 1998), the change process (Lewin, 1947), and the result or outcome of changes (Meyer & Allen, 1997; Armenakis & Bedeian, 1999). It could be argued that what has been done by the experts is more concern on aspects of organization and management of change. Yet to the success of a change, is also require attention to the actors, especially on the psycho-social aspects of the actors involved in the organizational change. Changes made in the organization will be positively addressed if the man who made changes or are affected by the change can feel the positive meaning of the change. Research on the meaning of the change was made among management experts such as Mourkogiannis (2006) and Ulrich (2010). Mourkogiannis (2006) suggested that the aim (purpose) is something people most want from work. The role of these goals is important, because people will have higher work spirit, when their purpose clearly well identifed. In the hands of an effective leader, the objective (purpose) become the fuel of the company, the source of its energy for progress and change. A successful purpose both drives a company forward and help build sustainable competitive advantage. Meanwhile, Ulrich (2010) proposed the concept of "meaning" in the sense of why and how. Why refers to a person search for meaning finds its way into their working place. The concept of how, shows how a leader facilities that search personally and among their employees. From this point of view we can see that people become the central actor in the company, so concern about people as a subject, or as an object, who affected by change is so important. The purpose of this study is to analyse what factors influence in creating meaningful planned change perceived by all member in the company, analyzing the influence of leadership in realizing of a Meaningful to realize better planning quality. 2. Research model development Organization members and leaders may feel meaningful of changes when the shape and outcome of changes can deliver benefits, and the company understand the usefullness of member involvement in the change process. This can be realized when the changes are planned to accomplish a specific goal and not just to achieve a concrete strategic objectives. Planning of these changes based on a belief that the planned changes could bring sustainability of progress and growth. Change awareness is an important factors to create succsessfull change initiative. The behavior of organization member who has this awareness can be demonstrated by the willingness and tendency to question the goodness of everything they see, hear, feel, and experience. Change awareness still needs to be equipped with a sense of competence or self efficacy of individuals in the organization. Self Efficacy is not only be seen from the confidence of the members to contribute in changes initiative, but also will give confidence and pride to the members who participate in creating the success together. The behavior of someone who has a self efficacy would seem from his or her confidence that the skills, knowledge and skills can be used and utilized to perform the duties and responsibilities, can be used not only in the short term, but also to meet the demands of long-term. In a paternalistic culture environment, such as those widely founded in small and medium enterprises, there is a great leadership role in generate the confidence of his subordinates. Organization s member will be encouraged to do something new when the leaders motivate members that they are able to carry out their duties and responsibilities, providing the opportunity and confidence to members to be innovate and creative. Thus,

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changes in plans are not only requires awareness and self efficacy among workers, but also requires a leader who can encourage and inspire members to follow his directions voluntary. It is called the leader effectiveness. Effectiveness of leaders reflects how a leader can foster volunteerism of followers to actively participate in efforts to realize a common goal. To realize this, which required are not order behaviour, demanding obedience, and highlight the power and authority of a leader, but it takes precisely the behaviour of leaders who are able to create a conducive work atmosphere to dialogue and sharing knowledge freely and openly among members. In Indonesia, where the paternalistic culture is still strong, usually the leaders set themselves up as the most powerful party. Within the paternalistic culture, leaders tend to put themselves as directors and decision makers who do not accept the process of dialogue and knowledge sharing. Direction is usually a monologue. It does have a charismatic leader who has the charisma to influence members to do the things he wanted. But charisma is like a double-edged sword. On the one hand, the charisma is used to evoke the spirit of the members to follow the direction of the leader that benefit society at large, but not rare charisma that is used to realize the interests of leaders and their related group themselves. To get out of this dilemma, paternalistic society requires leaders who are able to generate orientation and enthusiasm of his followers to contribute in the effort to realize a common goal. Leaders need to start the process of learning through dialogue and knowledge sharing among members of the organization. Leaders need to develop the ability to see the potential and capabilities of its members, see the benefits from the contributions of its members in an effort to realize the vision of the organization, as well as integration of the diversity of potential and capabilities of member into a valued aspirations. In other words, the effectiveness of the leader also will be determined by its leadership capability. Of course this needs to be accompanied by other preparations, including procurement and availability of resources necessary to achieve meaningful change. There are not many management experts who highlighted the significance of good planning quality. Good quality planning is an activity that produces an action plan involving the participation of members sincerely and simultaneously produce a plan that accommodates the interests of members. So here is talking about a plan that focuses on achieving results but rather to concentrate on formulating a plan to build members' commitment to work with the best effort to achieve their shared vision. The concept of good planning do not overlook the effectiveness of the plan, because here also believed that the commitment of the members who run and work with the best expected to carry out the development as aspired together, meaning that the quality of planning will also produce an effective plan. Management literature has highlighted the planning process that produces an effective plan. Such studies are usually based on a rational mechanistic analysis in order generates a plan that is expected to result in attainment of appropriate target. Not surprisingly, the behavioural aspects of people involved in planning process likely to be ignored. In contrast to the mechanistic way of rational planning, here are striking how the behaviour of certain individuals may contribute to the process of formulating an effective plan. Planning is a joint process of analysis and synthesis to produce a plan in realizing a certain goal. Planning commonly defined as an activity to determine the objectives to be achieved in the future and formulate ways to achieve its objectives. Thus in the process of drafting a plan needs someone who has a future-oriented, rather than just focusing on the present course. Future-oriented means that in the preparation of the plan, individuals who engage in it, also think about the possibilities that will be faced in the future. It also require an anticipatory spirit to accommodate the aspirations of members of the organization. This outlook is a form of aspirative that guide the mind, move the productive action, as well as a reference work and effort to realize the future that shared together. In preparing a future oriented plan, also need to be coupled with sincere intentions of the people involved to provide the best and develop measures to achieve the aspired goals together in a way that respects the dignity

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and sincerely dignity of all stakeholders. Consideration of the ethical aspects of this so-called ethical orientation. Hartanto (2009) argued that ethical orientation reflects the belief that members of a company upholding consistently a set of values, norms, and principles agreed at the time they are working and doing business, that will provide spiritual satisfaction and result in higher performance and meaningful. This insight is a form of ethical integrity that characterizes the decisions and actions taken in the workplace. In the planning activity can be seen the existence of a decision process that is preceded by an analysis of various alternatives. The best alternative may be developed if the people involved in the planning process, has a passion to share- the spirit to continuously develop new ideas and willing to accept suggestions, criticisms, and opinions with humility. This spirit is the manifestation of the spirit of innovative learning. This spirit not only grown in the forum of learning, but also needs to be run as a habit to ask each other and question the various issues faced in the workplace, in anywhere, anytime, and anyone in between. In particular Hartanto (2009) states that the innovative spirit of learning can take place effectively, if there is available "room for error". Thus, in the planning run by people who have a high enthusiasm for learning innovative, formulation of a plan can expect the emergence of a mature, adaptive, contextual, and innovative. In addition to the spirit of learning, other forms of spirit is also needed is a spirit of togetherness. expexted come from his own works. In addition, the formulation of the plan is carried out not for the interests of one group of individuals only, but for the benefit of the organization as a whole. Starting from this belief, planning can only be realized if there is a genuine mutual trust among members of the organization. Therefore, the spirit of togetherness that was developed to be inclusive. Through the participation of the people involved in the planning process, can be fostered ownership of the resulting plan. Hartanto (2009) suggests that the spirit of togetherness shows members of the company's desire to cooperate and grow together, which grew from the belief that synergy can only be realized through the integration of the diverse capabilities of the people who trust each other in an working environment. To realize the quality of planning, is still needed something else in addition to the aspects of spirit and behavior of people, namely the competence of the worker. Required here is not individual capabilities of each actor, but a synergistic combination of competencies that workers have in the form of collective competence. This is important, given the success of a process, not only determined by the behavior, but also by their ability. Based on this thinking, I propose a proposition model in figure 1. Effectivess Ethical Orientation Resource Availability

Aspirative Orientation Innovative Learning Spirit

Quality of Planning

Spirit of Togetherness

Awareness to Change

Competency

Self Efficacy

Figure 1. Proposition Model

Meaningful Planned Change

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3. Research proposition To initiate this study, this is my research propositions: (1) Meaningful Planned Change is positively influenced by the Awareness for Change, Self Efficacy, Quality of Planning, and Leadership Effectivenes, (2) Inluence of Awareness for Change, Self Efficacy, Quality Planning, and Leadership Effectiveness to Meaningful Planned Change will be more powerful with the Availability of Resources, (3) The Effectiveness of Leadership is positively influenced by the Capability of Leader, (4) The Quality of Planning is positively influenced by the Ethical Orientations, Aspirational Orientation, Innovative Learning Spirit, Spirit of Togetherness, and the Worker Competency. The proposition was put forward in advance to allow validity testing of these variable used in the study. The score of validity of the variabel will be used as a reference for the formulation variables and research model. Thus, the research model will be formulated by using validated variables. This study focuses on human and behavioral aspects of change management. It has not been widely performed by other researchers in the field of change management. In general, the researchers were more interested in studying how to make a change, the substance of the change, and the impact of the change. They also learned a lot about how to keep the process of change effectively. But they tend to ignore the actors involved in the process of change, good attitude, intention, behavior, and the capability to make changes effectively. Because this study focuses on the agents of change, this study also considers cultural factors as a behavior, particularly in small and medium scale industry at Cibaduyut, Bandung. context of the The data was collected using questionnaires, interviews, and company visits. Respondents of this research are workers who work at the Center of Small and Medium Scale Footwear and Shoes Industry at Cibaduyut, Bandung. 150 responds from questionnaires can be analyzed further. Data analysis was performed with factor analysis and regression. Factor analysis conducted to test the validity of Proposition Model to ensure the accuracy of any grouping of manifest variables into latent variables. The latent variable which being analyzed by factor analysis include: Awareness for Change, Self Efficacy, Leadership Effectiveness, Aspirative Orientation, Ethical Orientation, Spirit of Togetherness, Spirit of Innovative Learning, Quality of Planning, d Meaningful Planned Change . Factor analysis will be conducted using Principal Component method and varimax rotation. This method is commonly used to reduce the dimensionality simultaneously, the average error of the estimate and maintain the maximum variance of the representative data (Hotelling, 1933; Jolliffe, 2002; in Miranda, 2007). To ensure placement of the manifest variables on latent variables accordingly, I also do varimax rotation. This method was first introduced by Henry Felix Kaiser in 1958. To test this hypothesis an analysis done using regression analysis with SPSS 17. Interpretation of findings will be made by considering studies that have been done earlier. 4. Factor analysis results Result from factor analysis show that there has been a change in the grouping of manifest variables that bring implication of changes to the research model proposed in the initial proposition. Grouping changes specifically occur in some of these variables. Meaningful Planned Changes is clustered into two variables, which then called Planned changes that have Economic Meaning and Planned Changes that have Psychosocial Meaning. Leader Effectiveness Variables and Quality of Planning are grouped into one variable called Change Initiation. Meanwhile, the competence of workers variable is clusterred into two variables, which in turn named Production Competence and Marketing Competence. Based on this factor analysis results, I propose new research model (figure 2) which then being analyzed by regression.


Le Capability Ethical Orientation Aspirative Orientation Innovative Learning Spirit Togetherness Spirit

Awareness to Change

Resource Availability

Economical Meaningful Planned Change

Change Initiation Self Efficacy

Psychosocial Meaningful Planned Change

Production Competence Marketing Competence Figure 2. Research Model

Hypothesis 1 i. Psychosocial Meaningful Planned Change is positively influenced by Awareness for Change, Change Initiation, and Self Efficacy. ii. Economical Meaningful Planned Change is positively influenced by the Awareness for Change, Change Initiation, and Self Efficacy. Hypothesis 2 Influence of Changes Initiation, Psychosocial and Economical Meaningful Planned Change will be more significant, if supported by the Availability of Resources (Physical). Hypothesis 3 Change Initiation is positively influenced by the Capability of Leader, Ethical Orientation, Aspirative Orientation, Innovative Learning Spirit, Spirit of Togetherness, Production Competence, and Marketing Competence. Testing of the research model carried out using regression analysis (backward method) to determine which variable has a significant influence on the dependent variable of each hypothesis. As a benchmark of p, we use the significance level which is acceptable < 0.05 and R2 > 0.5. Even so, as this study still contains many elements of exploration, in particular the significance level of p < 0.10 was considered. Using SPSS 17.0, R and R2 values obtained in Table 1. 5. Conclusion Workers at Small and medium scale enterprise view a meaningful planned change as a change that is significantly well prepared and enable the management and members of the company to work better and more effective. The impact of Planned Change is felt meaningful by members of the company, if there have been a real change initiatives especially from leader. Members of companies still tend to be passive in this process of change, as reflected by the absence of self efficacy and awareness towards change in creating a meaningful planned change. The initiative for change is not solely determined by the quality and effectiveness of the leadership of the company, but also determined by the ability of leaders to plan properly. In fact, the initiative

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for change solely is not enough, but it should be an action plan to realize a change, as reflected by a new variable called Initiation of Change, which include Leader Effectiveness and Quality of Planning variable. Tabel 1. Significant score INDEPENDENT VARIABLE Awareness to change Self Efficacy Initiation of Change Resource Availability Awareness to Change Self Efficacy Initiation of Change Resource Availability

DEPENDENT VARIABLE Economical Meaningful Planned Change R= 0.961 2

R = 0.924

Psychosocial Meaningful Planned Change R = 0.936 2

R = 0.876

Ethical Orientation

SIG A. 0.283

A. 1.078

0.626

B. -0.448

C. 0.000 ***

C. 42.055

D. 0.538

D. 0.618

A. 0.878

A. -0.154

B. 0.394

B. 0.855

C. 0.000 ***

C. 32.268

D. 0.225

D.

E. 0.003 **

E. 3.035

1.218

F. 0.937

F. 0.079

Aspirative Orientation

Change Initiation

G. 0.797

G. 0.258

H.

Innovative Learning Spirit

R = 0.938

H. 0.072 **

H. 1.813

Togetherness Spirit

R2 = 0.88

I. 0.071 *

I. 1.819

J.

Production Competence

J. 0.007 **

J. 2.737

K.

Marketing Competence

K. 0.004 **

K. 2.042

***: Significant,

,

Resource availability show a paradoxical implication, because its existence would negate the effect of initiation of Changes to create a meaningful Planned Change. It is thought to occur as a consequence of the shift of attention from management and members from realizing the changes to get the resources. This last situation is common, because of the requirement to obtain the resources it is often ask the company to maintain its status quo. Initiation of change and availability of resources does not need to be contested, but in the real business life is often placed on both of these contradictory positions. Efforts to realize the changes are still largely determined by the prevailing leadership role and competency of management and members of the company. This situation shows that among small and medium enterprises in Cibaduyut there is still a fairly strong paternalistic culture. Workers are still treated as a person who is expected to obey the order to utilize the expertise and skills for the benefit of the company. Reviewed from this perspective of small and medium entrepreneurs in Cibaduyut, workers have not been fully considered as a professional partner to be invited to go forward and grow together. This of course caused a lot of potential and virtue of the worker has not been fully utilized for the advancement and development of company. Changes undertaken among small and medium enterprises in Cibaduyut estimated have not concern yet to ethical and aspirative orientation, it means that changes plan only have short-term horizon. Or more specifically, the change is usually still be responsive to current developments in consumer tastes, and not to be anticipatory of what is potential to develop in the future. This will be a big problem if the company wants to expand the scope of business into regional or global scale, because the plan would not adequately responsive. This usually occurs among employers who are still in a state of mere survival the business. Such a situation is understandable, but now that Indonesian has been increasing in needs hierarchycal and their ethical awareness, then it certainly needs to be considered in the development of business in Cibaduyut. References Annonymous (2003), Change Management Models-making the right decisions, Futurics, , 27, ½, Academic Research Library, p.85,. Argyris. C. (1991), Teaching Smart People How to Learn. Harvard Business Review, May-June, p. 99-109. Armenakis, A. A. (1999) Organizational Change: a Review of Theory and Research in the 1990s (yearly review of management), Journal of Management May-june. Asian Wall Street Journal Sept, 2002


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