Reinsurance and Foreign Exchange Risks
All insurance companies face foreign exchange risks to some extent. However, all insurance companies are not equally concerned about foreign risks. This is because, for most insurance companies, the risks as well as the premiums are collected in the same currency. Generally, the business of an insurance company tends to be managed locally. However, this […]
Key Differences Between Insurance and Reinsurance
When we define reinsurance, we often say that is a type of insurance for insurance companies themselves. This statement gives the impression that the reinsurance contract is very similar to the insurance contracts which individuals enter into. This is not completely true. There are significant differences between an insurance contract and a reinsurance contract. Some […]
The Tyranny of the Quarterly Results: Why Business Leaders must Avoid Short-Termism
The Tyranny of the Quarterly Results: How Short Termism Took Over Publicly listed companies are expected to file and report quarterly results at the end of each three month cycle. These results are then released to the stock exchanges, in shareholder meetings, and published and forwarded to all relevant stakeholders. In this way, corporates are […]
Reinsurance Policy Coverage: Advanced Scenarios
In the previous article, we have already seen that the scope of coverage of reinsurance policies can become quite complicated and open to interpretation. We now know that reinsurance policies are covered under three main different terms and conditions. However, over the years, there have been some complications have arisen in these different types of […]
Role of HRD in Risk Management
These days, the importance of Human Resource Management can not be neglected especially when companies are operating in such a volatile and unstable environment. The department plays a vital role in risk management. Needless to say, handling people is one of the most difficult tasks in the world and human resource department of any company […]
Several change management experts have argued that Bottom Up Strategy for Change Management yields effective results comparatively over Top Down Strategy of Change Management.
The Top Down approach necessarily involves an element of compulsion, and the decisions are forced on the employees without taking any inputs from them.
Top Down approach involves forceful implementation of change and in the entire process opportunities for gathering information regarding employee expectations, asking their feedback and suggestions are entirely disregarded or not given any priority at all. This gives rise to employee dissatisfaction due to a feeling of being ignored or undervalued, and equally good ideas of the employees are never aired.
A successful change management program must involve the participation and involvement of all the key stakeholders in the overall process, and the objectives should be made clear, the reasons for the need for implementing a change program must be well communicated along with its implications on the individuals, departments and also the organization as a whole.
Without the support and involvement of the stakeholders, the program may be subjected to heavy resistance or opposition, a sharp decline in the motivation level and also the overall performance of the employees.
Communication Issues in Top-Down Approach to Change Management: In the case of Top-Down Approach, the business leaders are concerned about three elements only related with communication:
In the case of top-down approach, the management is simply concerned about the above mentioned three key elements, without addressing the issue of why or the purpose behind the implementation of change.
Explaining the purpose or the objectives to the employees is the central requirement in any change management program for obtaining the desired support from the employees and making the overall program a success.
However, top-down approach to change management under certain circumstances become a necessity especially during crisis situations when the management is expected to implement quick decisions and deliver fast results by implementing a rapid change.
In the recent years, since the businesses are undergoing rapid transformation and operating globally, there has been a shift in managing change management assignments by focusing more on strategic programs for propelling organizational growth and tapping new markets for improved business opportunities.
Top down approach to change management has been criticized for being too paternalistic, and it ignores the value which an employee can add towards a change program.
Bottom Up approach can be useful for organizations which aim for steady growth, want to be innovative and wish to implement a program involving the support of all the key stakeholders.
Bottom-up approach will essentially enhance a sense of responsibility and accountability and may be beneficial in terms of improving the people’s motivation in making the change program a success.
However, Bottom-Up Strategies take a lot of time and can never happen overnight. The process of change management requires careful planning, gathering information and feedback, conceptualizing a program and ensuring it’s successful implementation by receiving the desired support from all the key stakeholder.
Hence, it can be concluded that a balance may be required while implementing a change management program by assessing the existing organizational requirements and the objectives which are required to be fulfilled.
For implementing quicker decisions and during a crisis situation, top-down approach may be best suitable, whereas, for the collective decision-making process and involving all the key stakeholders in the program implementation bottom up approach may be effective.
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