final_change_management

BOLTON BUSINESS SCHOOL

Course level: MBA

Module title: Change Management

Module code: MBA 7024

Level HE7

Credits 20

Assignment title:

Case Study Report

Date issued Date due in

Extension date agreed?

Actual submission date

20th May 2016

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Student Signature: Saad Amin

Date: 15th May 2016

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Student ID: 1510862 Date: 15-May-2016

Essay

The Change Management at

Corus Strip Products UK

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The recent globalization has increased pressure on the organizations to consistently change in order to

remain competitive. Therefore, it is essential for organization to understand the mechanism of

organizational change and to effectively adopt the innovative practices to maintain their place in the market.

Corus Strip Products UK has been one of the companies that has successfully implemented its

organizational change initiative which provides an interesting case to analyze. Internal and external drivers

for change have been discussed together with other issues that caused the urgency to change. Various

theories and philosophies of change management were discussed to shed light on the literature that can

help understand the change at Corus. The change management models were also applied to the case of

Corus to critically evaluate and analyze the change initiative.

Highly competitive markets, greater regulatory requirements and technological advancement poses

considerable challenges to the organizations which aims to satisfy customer’s needs and maximize

shareholder’s value. With economic uncertainty and rapid changing business environment, organizations

are required to focus on organizational change to survive and grow. Jones (2013) described organizational

change as the process in which an organization aims to deviate from its current state to a more prosperous

state where it can perform efficiently. The recent inclination of the corporate community and researchers

towards the subject of change management has focused on finding out possible solutions to make use of

available resources and capabilities to create value. These solutions are applicable only when the

organization is willing to alter its present mode of business activities, its organizational structure and culture

to cope up with the swift changes in business environment (Hashim, 2013). A successful organizational

change, at any level, involves effective communication and understanding of the business situations.

The UK based Corus Strip Products (CSP UK) approached the organizational change by implementing a

change program called “The Journey” in 2005. Mathur (2013) suggested that organizations may seek to

enhance its current aspects to overcome obstacles and enhance business performance by planning and

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implementing change. By focusing on the values and beliefs of major stakeholders, the initiative aimed to

highlight various internal and external challenges faced by the company. Within two years’ time the

company was able to define its core values, principles and behavior to its employees which was handed

out to them in the form of a booklet.

In order to evaluate the organizational change that was considered by the senior management at Corus, it

is important to understand the issues the company was facing that required the need for change. Zink et al.

(2008) stressed that it is essential to realize current situation and course of action of the organization before

implementing a customized overall change concept within an organization. Hassin (2010) approves with

the viewpoint and highlighted that organizational change should be initiated through effective diagnosis of

the organization.

The internal and external inefficiencies at Corus were the major drivers for change at the company. The

key findings of research by Christiansen and Varnes (2015) indicated that internal and external drivers were

the main causes for the organizations to change their organizational structures, strategy and adopt new or

modified procedures of operations. Corus’ internal incompetence included poor delivery of products, higher

production wastage and low self-esteem of the employees. On the other side, the pressure from new

competitors, in the form of lower production costs in Eastern Europe and Far East, led to lower demand

and higher costs for Corus. The situation became further challenging due to change in business

environment. The customer demands were changing as demand for Corus’ steel product in the automotive

industry had fallen and newer technology had raised customer expectations. The environmental issues

faced by the steel industry was building a poor image of the companies of the industry in the eyes of the

local community. Ruta (2005) pointed out that industry dynamics and characteristics are important

components of the contextual dimensions of an organization that are significant reasons of organizational

change.

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Corus had previously initiated Total Quality Management with aim to overcome the internal inefficiencies at

work. The program wasn’t able to achieve results expected of it. Johnson (1992) based his research on this

scenario and concluded that not all employees buy the idea of TQM since they are already used to previous

tools and procedures, which in turn leads to most employees reverting back to old ways of doing things.

The role of employees remained an important issue for the company related to the implementation of “The

Journey”. The main challenge of implementing this program was the employees’ resistance to change.

Brisson-Banks (2010) highlighted that employees’ acceptability towards change is one of the key

components to the success of a change management initiative. Therefore, it was important for the senior

management to break the barrier to bring the employees out of their old habits. Employees at Corus feared

that the organizational change would adversely affect them. Employees feared that they might lose their

job, power and status. Most also had a fear of unknown and believed their existing arrangements at work

(teams, groups and working style) will be altered. Further, as Corus belonged to a traditional industry, the

work attitude was inclined towards set patterns and rules in most area of business operations. This attitude

had to be changed with a more flexible work culture to ensure improved productivity. Erwin (2009)

suggested that resistance and anxiety to change is because some employees fear losing their jobs while

others are unprepared to learn or develop a new skill.

Another problem related to the employees was the aging of the staff which created a serious hindrance in

company’s ability to change. Chiu et al. (cited in Streb et al., 2008) linked having an ageing workforce with

age stereotyping, where the older employees tend be inflexible, not open to change and slow in learning

new skills compared to younger employees. The appraisal of long serving employees and lack of

opportunities for the younger people have been the main reasons for the ageing employees’ situation at

Corus. The current older employees may be less productive, but due to their longer service to the company

and know-how of the technical skills they are able to retain their position in the company. Therefore, a

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considerable challenge for Corus was to get the most from its existing taskforce since laying them off wasn’t

a cost-effective solution. Vasconcelos (cited in Angeloni and Borgonovi, 2016) argued that managers and

firms may find it difficult to design policies that can increase the productivity of the older group of employees.

There were also some complacent employees who had witnessed the past change initiatives at the

company and the ‘rise and fall’ of the industry. They believed their jobs were secure since the company had

faced difficult times before but didn’t cut jobs. This shows that the change program initially wasn’t taken

seriously.

To make the change management initiative sound serious and applicable, the senior leadership had to play

an important role. Gilley et al. (2009) emphasized that an organization’s change capabilities is directly

influenced by the leadership effectiveness. If the senior managers fail to successfully enforce clear vision

and readiness for change, the organization, as a whole, diminishes its ability to accept and manage change.

Leadership of an organization therefore sets the tone of any change management strategy as they are

considered to be the pioneers of change in an organization. The vision and direction from the top level for

different levels of management can be effective in the change process of an organization (Sandelands,

2010).

Initially, the leadership at the Corus Strip Products UK were expected to take responsibility as the ‘Change

Agents’ of the company. Baer et al. (2015) describes the change agents as leaders who remain authentic

and courageous by creating the capacity and environment for the organization to move in the future while

focusing on the core goals and values of the organization. Through successful management, these agents

are required to use the change initiative as an effective tool for enhancing the performance of the

organization. Bass (1985) discussed the leadership styles in relation to change management by describing

two most discussed styles: Transformational leadership and Transitional leadership. He explains that

transformational leaders have charisma, inspirational motivation, intellectual stimulation and individualized

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attention that allows them to bring change successfully. On the contrary, Bass (1985) points out that

transitional leader is form of laissez-faire leadership where the leader uses performance related goals and

incentives to maintain status-quo and bring change at a slower pace. In today’s dynamic business

environment, timely decision making is essential for success of an organization. It is important that the

organizations quickly adopt to the changes in business environment. Hence, transformational leadership

style is believed to be a better option compared to transitional leadership which has also been highlighted

by Kuchinke (1998) in his research regarding the influence of leadership styles. At Corus, the leaders had

played a significant role in ensuring successful implementation of change program. Their engagement and

high level of enthusiasm regarding the program ‘The Journey’ was a key aspect in engaging the employees

in the change initiative and to change the overall culture of the organization.

Organizational change has become an area of keen interest in recent times due to the rapid changing

business environment. The understanding of the philosophies and theories of change management is

important to help evaluate the change initiative undertaken at Corus. Glanz et al. (2008) mentioned the two

different dimensions of change in an organization: Organization-wide and Subsystem. Organization-wide

changes affect the core areas of the business which may involve major restructuring and collaboration for

example right-sizing, delayering etc. Sub-system change on the other hand involves changes in certain

business functions or operations of the organization for example reorganization of certain departments,

discontinuation of certain products etc. In the case of Corus, the change can be easily identified as

organization-wide change since it affects the organization as a whole.

The context of organizational change can also be developmental or remedial. Springer (2013) explained

remedial change as re-active change which aims to address a particular situation where as developmental

change is a pro-active change which allow organizations to make a successful situation even more

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successful. The case of Corus is clearly a remedial change as it is aimed to address the poor performance

of the company.

Change at the organization can also be distinguished between planned and unplanned change. Planned

change is usually a result of a proper strategic plan and intent where the senior leadership of the

organization recognizes the need to change. Unplanned change can be explained as a responsive measure

in a completely disorganized fashion where the organization and its leadership are taken by unexpected

events. As the change initiative at Corus was properly planned and executed, it can be categorized as

planned change. Jabri et al. (cited in Bisel and Barge, 2011) concluded that the planned change aims to

enable a shared understanding of the what change means and how resistance to change can be overcome,

which can also be linked to the case of Corus.

The change has also been associated with the organizational structure. The research conducted by Burns

and Stalker (1961) focused on how differences in management systems can affect the organization’s

adaptability to change initiatives. They introduced two important management systems, organic and

mechanistic, which deals with change mechanism differently. Mechanistic Structures are more of a

traditional form which are characterized as complex and highly centralized. Organic Structures are modern

structures that tend to be more flexible and adaptable as there is more employee involvement and smooth

flow of information. The organizational structure of Corus can be categorized as organic as it successfully

implemented the change initiative. Sine et al. (2006) approve the concept and concluded that organic

structures are more effective compared to mechanistic structures in adapting to change.

Organization’s culture also plays an important role in employees’ response to change. There have been

many studies on organizational culture that highlight possible variations in employee behavior at work. The

popular studies pertaining to the organizational structure include those by Hofstede (1980), Deal and

Kennedy (1982), Handy (1976) and Goffee and Jones (1998). Corus underwent a cultural shift which can

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be explained by the organizational theory presented by Cooke and Lafferty (1995). The organization culture

of Corus was defensive (passive culture) before the change initiative where employees aimed to please the

superiors to safeguard their position in the organization. However, after the change initiative the culture of

the company was completely changed into a constructive culture where the company encouraged healthy

interactions amongst employees which improved organization’s performance. Essawi (2012) concluded

that organization’s culture influence the behavior of employees and can help organization achieve effective

performance, growth and success.

As the importance of change management increased, many philosophies have emerged to explain the

change phenomena. The early traditional approaches to change in an organization followed simpler and

rational models which were are influenced by the organization’s leadership. The decisions are mostly taken

at the higher level of management and the bottom half of the organization are expected to comply to the

changes. The approach assumes that change comprises of series of predictable actions that can be

managed. Therefore, the traditional change agenda is often referred to as ‘Mechanistic Agenda’. With very

less involvement of employees in the change process, the traditional approach is leader-centric. Giddens

(1981) argues that the traditional approach to change is unsound as it treats employees as autonomous

rather than active agents of change.

A more modern approach to organizational change focused on energizing and reviving the creativity at all

levels of the organization which is known as the ‘organic agenda’. The approach to change became more

flexible, lively and humanistic. Factors of organization’s culture and collaboration at all levels of the

organization became the major considerations. Graetz and Smith (2010) observe that the emerging agenda

of change has transformed the traditional leader from an autocrat to a democrat who believes employee

participation can play an important role in success of an organization. The change initiative of Corus can

be related to the emerging change agenda as the company focused on increasing employee participation.

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The philosophies of change provide the beliefs about the organizational change and how change operates

within an organization. The biological philosophy relates change to the organization’s life cycle which is

based on Charles Darwin’s ‘Evolution Model’. McKelvey and Aldrich (1983) suggested that change is a

result of gradual evolution of industries where they seek to match the constraints of their environmental

context. The rational philosophy, also known as Teleological Approach, outlines that the focus of change is

on strategy and development of an organization through change initiatives which are planned and directed

by the leader. The philosophy underlines the role of leadership of the organization in directing the change

to achieve organization goals and social practices that derive them (Normore, 2016). Also known as the

strategic philosophy, the rational philosophy is linear and rational in nature where the manager, acting as

change agents, play a pivotal role. Van De Van and Poole (1995) concluded that this theory suggests that

developmental change can move an organization forward.

Institutional philosophy assumes that several institutions within the business environment are the main

driving force behind organizational change. The philosophy is based on the institutional theory of Lawrence

and Shadnam (cited in Donsbach, 2008) who concluded that institutions endure rules, procedures and

structures that set conditions on actions. The institutions may include competitors, government and

pressure groups which influence the decisions of the organizations. Graetz and Smith (2010) suggests that

organizations become successful if they can effectively handle the pressure from these institutions.

The resource philosophy identifies the need to change by identifying the required resources and skills for

the business to prosper. Conor (2002) explained criticality and scarcity of resources play a vital role in

organization’s course to implement change. Core competencies are considered to carry strategic

capabilities for change.

The contingency philosophy, as explained by Pfeffer (1982), is based on the notion that combination of two

or more factors, such as organization structure, culture or technology, will affect the overall performance of

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the organization. The point of view explains that the ‘behavior of managers’ decide the most relevant course

of action in a particular situation or circumstance. The situational nature of this philosophy signify that

change can be fast or slow depending on the business circumstances.

The psychological philosophy concerns with the human side of change. The theory is based on individual’s

experience and the prominent approaches of organizational development and change transitions are based

on this philosophy. The change under these assumptions are presumed to be slow and mostly on a smaller

scale.

Political philosophy assumes that change in an organization is a result of conflicts and clashing of ideologies

(Morgan, 2007). As conflicts arise, the more powerful group will challenge the status quo and impose

changes that are in their own interest. Bolman and Deal (1991) suggests that activities such as bargaining

and social movements portray power and strength of a group which inevitably lead to changes in the

organization.

The cultural philosophy assumes that change is a normality and is responsive to changes in human

environment. Graetz and Smith (2010) concluded that organizations may have to contest against already

set values and beliefs shared by the staff in the organization to successfully implement change. The

systems philosophy considers change to be applicable across various functions, divisions or units of an

organization. An internally driven and controlled initiative, the change can be relatively fast and on large

scale.

Based on the above mentioned philosophies of change, many researchers have presented their models

and theories of change that explain how change can be effectively achieved in the organization. These

models include Three Stage Model, Force Field Analysis, Action Research Models. Appreciative Enquiry,

ADKAR model, Virginia Satir Change Process, Psychological Model of change, Eights Steps to Change

model, Transition Model, Technology Adoption Model, Ross Five Stage Model and the SMAC Model.

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Kurt-Lewin’s three stage model provides the understanding of organizational change assuming that the

process of change follows a linear model of three steps. These three stages are ‘Unfreeze’, ‘Change’ and

‘Refreeze’. The framework outlined that at the unfreezing stage the organization needs to prepare the

employees for change by breaking down the status quo. The change period is the transition period where

people at work begin to support the change initiative and understand the benefit of change. The freeze

stage is where change is reinforced, solidified and organization is stabilized. Kurt-Lewin’s Force-Field

Analysis is a decision making model that helps define forces in favor and against the change in the

organization. As the two forces break the equilibrium, where resistance force is equal to the driving force,

the change occurs at an organization.

The Action Research model of change is based on the notion that a systematic and cynical approach is

essential to implement change in the organization. Activities such as data collection, problem identification,

Preliminary analysis and development of hypothesis are fundamentals to this approach. These activities

are followed by actions required to achieve desired organizational goals and evaluation of these actions.

Meek et al. (2008) concluded that when implementing a large-scale change initiative, action research is

mostly used as the building block.

Appreciative inquiry (AI) Model assumes the change to incur based on the engagement of various

stakeholders’ in a self-determined change. Cooperrider and Srivastava (cited in Fry, 2002) believed that

innovative and long-lasting transformation is a result of adopting an appreciative attitude in various aspects

of the organization.

Prosci’s (cited in Hiatt, 2006) ADKAR model is based on five organizational elements that must be in place

to successfully implement change. These components are Awareness of need for change, Desire to

participate, Knowledge, Ability to implement and reinforcement to sustain.

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Virginia Satir Change Process is a five stage model that assumes that improvement is always possible. The

five stages of Last Status Quo, Resistance, Chaos, Integration and New Status quo affects the feelings,

performance and psychology of the people at work. Brother (1991) believes that the model can help improve

the processes at an organization.

Another important model for change has been Kotter’s eight steps to change. Calegari et al. (2015)

concluded that Kotter’s model for change provides an effective roadmap to involve various participants in

an organization towards continuous improvement cycle of an organization. The framework has its

foundation laid on the elements of focus, communication and empowerment.

Bridge’s Transition Model uses three-phased transition model of change in which the people accept the

change in an organization gradually. The three phases are called ‘ending’, ‘neutral zone’ and ‘new

beginning’. Roger’s technology adoption model defines existence of various adopter groups within an

organization who differ in accepting the change in an organization. Rodgers (cited in Sahin, 2006) explained

that change is an innovation-diffusion process in which uncertainty is reduced over a period of time.

To successfully analyze the effectiveness of change management initiative at Corus, it is important to apply

the relevant models of change. Kurt-Lewin’s Three Stage model has been among the most talked about

model of change. Developed in 1947 by a physic and social scientist Kurt Lewin, the model uses a simple

and easy to understand approach to manage change at an organization. The three stages described in the

framework can be applied to any organization to implement change initiatives. The first stage is called

‘unfreezing’ where the organization has to prepare for the change, which has become necessary in order

to succeed, by breaking the present status quo to build a new way of thinking. Schein (cited in Burnes,

2004) outlined three major elements that are required for unfreezing: disconfirmation of validity of status

quo, survival anxiety and creation of psychological safety. At Corus, the unfreezing stage came when the

change program named ‘The Journey’ was initiated. A new culture was being imposed when the employees

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were handed out a booklet with new set of values and beliefs of the organization which were expected to

be followed in true spirits. The company emphasized on employees owning up the new values by physically

signing up for the program. The ‘shock tactics’ were used to demonstrate the managers and employees

about the working condition of Corus’ plants. Managers were also shown the perception of the outside

community about the plant which further highlighted how employees were used to working with limited

resources and low standards. These activities were essential part of the cultural shock at Corus. The second

stage of the model is called the ‘changing’ stage. In this phase, the organization requires to promote

improved communication across all areas of the company, to empower employees to develop new set of

skills to implement change and proactively engage everyone to be a part of the change initiative. The

employees shall also be reminded the benefits that changing will bring with it. At Corus, the educating

workshops clearly indicated the changing stage of the organization. The company’s values and change

messages were repeatedly given out to the employees in the form of fortnight newspapers, billboards,

intranet and one-to-one conversations. The company also vowed to help employees who were willing to

help in the change initiative by giving support and counselling services which allowed the company to retain

50 of its employees who would have lost their jobs. An effective method of measuring progress was also

introduced in the form of clear milestones and targets. The last stage described in the model is the

‘refreezing’ stage in which the effects of change are made permanent and solidified. Bourada (2013)

concluded that in refreezing stage the company would become stable and it is important for organization to

ensure people don’t turn back to their old habits. Corus witnessed the refreezing stage as it was able to

show signs of stability and improved organization. The key performance indicators highlighted tremendous

achievements of the organization after implementing the change initiative. Further, the cultural shift and

new enhanced security mechanism showed that Corus was proud of itself.

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Another popular model of change is Prosci’s ADKAR Model of change. Kazmi and Naarananoja (2014)

concluded that ADKAR is the best model among change management models. The framework is a result-

oriented organizational change mechanism which identifies 5 steps that organization must go through for

sustainable change to take place. The first step is ‘Awareness’ where the business leadership reasons for

the need to change by communicating readily accessible information. At Corus, the top leadership was able

to successfully diagnose the reasons for its failure by identifying the internal and external problems of the

organization. From the available information, they were able to conclude that change is necessary for

organization to succeed. The second stage is ‘desire’ in which the system has to ensure participant are

engaged in the change process and manage the resistance to change. The leadership at Corus had already

imposed its urge to bring the change and encouraged the people at work to do the same. The organization

initially did face resistance to change by employees who had job security and fear of loss of authority, but

was able to overcome resistance by supporting and educating the employees in various ways. The

employees were also informed of the benefits that change at Corus would bring. This also overlapped with

the third stage of ‘knowledge’ as it involves training and coaching the staff regarding new developments at

the organization. The fourth stage of ‘ability to implement’ focused on applying the changes into practice

effectively. Corus’ repeated messages to the employees regarding the new beliefs and values of the

organization demonstrated that the change initiative was being put into place. Prosci (cited in Hiatt, 2006)

explained ‘ability to implement’ stage as the outcome of additional coaching and time. Final stage is the

‘reinforcement’ stage that ensures that the employees wouldn’t go back to old habits. Prosci (cited in Hiatt,

2006) highlighted that measurement and recognition of change is essential part of reinforcement stage. At

Corus, the new methods of measuring improvements and security mechanism can be related to this stage.

Kotter’s eight steps to change is another model of change that can be applied to the case study of Corus.

Mourfield (2014) argued that these eight steps proposed by Kotter in 1996 are part of three major elements

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that define change: creating a climate for change, engaging the organization and sustaining for change.

Kotter believed that the organization must adopt these eight steps in respective order to effectively

implement change. The first step involves establishment of sense of urgency to change. The ‘Buy-in’ of

change at Corus clearly showed that the management felt that change was important. Second step is to

form a powerful coalition which involves assembling the supporters of change together to lead the urgency

to change. The senior leadership started involving and encouraging people at the company to be part of

the change. The ones who supported change had their contributions and experience recognized. The third

step is forming a strategic initiative to achieve the vision. Corus’ introduction of the cultural plan ‘The

Journey’ clearly depicted it to be the strategic initiative that aimed to achieve the vision of changing the way

people worked. Fourth and fifth step involve communicating the vision and enabling action by removing any

barriers. As mentioned in above models, Corus put high importance in communicating the enhanced vision

and beliefs of the company. Further, through training and support the company was able to break resistance

to change. Finally, the last three steps involve generating short-term wins, sustaining the acceleration and

instituting change. Corus’ progress measurement tools of ‘milestones’ and ‘quick wins’ were successful to

enable celebrations of accomplishments and sustaining acceleration. By completely imposing the new

vision, the company was able to anchor the culture at work.

The overall impact of change management at Corus provides a good example of how organizations can

effectively implement change and succeed. Like Corus, the organizations should make sure that the leaders

play important role in the process of change at the organization. Further, as theories and philosophies of

change suggest, the organizations have to go through certain phases before successfully achieving the

desired goals through change. It is essential to overcome the resistance from the employees and sustain

the new ways of work. The case of Corus indicated that cultural change can enhance business performance

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if people are engaged and valued. The support and incentive to employees is essential for successful

implementation of change.

Word Count: 4743 Words (Including References)

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