r423577/fulltext01.pdf · leadership practices, and leadership can be interpreted differently by...
TRANSCRIPT
Authors: Tutor: Subject:
Level and semester:
2
Acknowledgment
First of all, i would like to thank two persons who especially helped me, without
whom the realization of the Master Thesis wouldn‟t have been possible, Philippe DAUDI and
Pierre JUHEL.
I would like to express my gratitude to my tutor, Mr Philippe DAUDI, for his support,
encouragement, availability and the advices‟ wealth. Throughout the realisation of my
Research, he gave me the motivation and a considerable energy. He offered me the
opportunity to complete this Thesis.
The second person that allows me to accomplish this Master thesis is my translator,
Mr. Pierre JUHEL. Since the beginning of this enterprise, he has shown reactivity and
availability.
Furthermore, they believed in me. I wish to thank all my family members for having
supported me and encouraged since the beginning of this adventure. Their presence offered
me the daily energy required until the end of the Thesis. I would like to give a particular
recognition to my father. His professional experience, skills and his advices have been a
precious help.
My dear friends also deserve to be well rewarded. We have always been used to see
each other often and they have perfectly understood my frequent unavailability along this
year. They have supported me and have shown me their presence without disturbing my work.
Their constant presence helped me to overtake rough times.
Thanks to all to have made it possible!
3
Table of Content
Chapter 1 : Introduction .............................................................................................................. 7
1.1.Context of the research ......................................................................................................... 7
1.2.Why should managing the process of change be studied? ................................................. 7
1.3.Why should leadership in the process of change be studied? ............................................ 9
1.4.How is organization identity essential in the process of change? ................................... 10
1.5.Identity the change in organization needs to be managed ................................................ 11
Chapter 2 : Purpose of the research......................................................................................... 12
2.1. Research Questions............................................................................................................ 12
2.1.1. Main research question. ............................................................................................. 12
2.1.2. Related research questions. ........................................................................................ 12
2.3. Research objective ............................................................................................................. 13
Chapter 3 : Methodology ........................................................................................................... 14
3.1. Justification and motivation .............................................................................................. 14
3.2. Research approach ............................................................................................................. 15
3.2.1. Empirical research strategy........................................................................................ 15
3.2.2. Interpretive framework .............................................................................................. 15
3.2.3. Scientific approach ..................................................................................................... 16
3.3. Qualitative approach .......................................................................................................... 16
3.4. Data collection ................................................................................................................... 17
3.4.1. Primary data ................................................................................................................ 17
3.4.2. Secondary data............................................................................................................ 20
4
Chapter 4 : Theoretical Framework ........................................................................................ 21
4.1. Understand the Change within Organizational and business Systems ........................... 21
4.2. Types of change ................................................................................................................. 27
4.2.1 Discontinuous and Continuous Change ..................................................................... 27
4.2.2. Endogenous and exogenous who lead to change ..................................................... 30
4.3. Change and rigidities to change ........................................................................................ 44
4.3.1. Typical Organizational Rigidities to Change ........................................................... 44
4.3.2. Resistant of Management Change and Transition.................................................... 47
4.4. Change implementation process and keys success factors ............................................. 51
4.4.1. Implement change, the Lewin's three -Step model. ................................................. 51
4.4.2. Keys success factor in change implementation ........................................................ 53
4.5. Human factor Management a leader's key success factor in the process of change...... 55
4.5.1. Identify the stages of competence development....................................................... 56
4.5.2. Identify the styles of management. ........................................................................... 58
4.5.3. What kind of management, and for what kind of associate? ................................... 60
Chapter 5 : Empirical study ...................................................................................................... 62
5.1. Case Study one: Yacht Brokerage Insurance Agency ..................................................... 62
5.1.2. Presentation of the case study .................................................................................... 62
5.1.2. Type and origin of change ......................................................................................... 67
5.1.3. Strategy and process of change ................................................................................. 68
5.1.4. Rigidities management strategy ................................................................................ 69
5.1.5. Conclusion .................................................................................................................. 69
5.2. Case Study two: French Company ................................................................................... 70
5.2.1. Presentation of the case study .................................................................................... 70
5.2.2. Type and origin of change ......................................................................................... 71
5.2.3. Strategy and process of change ................................................................................. 72
5
5.2.4. Rigidities management strategy ................................................................................ 73
5.2.5. Conclusion .................................................................................................................. 74
5.3. Case Study three: Spanish subsidiary ............................................................................... 74
5.3.1. Presentation of the case study .................................................................................... 74
5.3.2. Type and origin of change ......................................................................................... 77
5.3.3. Strategy and process of change ................................................................................. 77
5.3.4. Rigidities management strategy ................................................................................ 78
5.3.5. Conclusion .................................................................................................................. 79
5.4. Case study four: French Multinational ............................................................................. 80
5.4.1. Presentation of the case study .................................................................................... 80
5.4.2. Type and origin of change ......................................................................................... 81
5.4.3. Strategy and process of change ................................................................................. 82
5.4.4. Rigidities management strategy ................................................................................ 82
5.4.5. Conclusion .................................................................................................................. 82
Chapter 6 : Conclusion............................................................................................................... 84
Literature Review ....................................................................................................................... 86
6
List of figures
Figure 1 - The Agreement Matrix ................................................................................................ 25
Figure 2 - Evolution and Revolution Dealing with the Paradox ................................................ 29
Figure 3 - Reengineering Work - Hammer ................................................................................. 29
Figure 4 - Scope of Frame-Braking Change - Tushman and Romanelli ................................... 30
Figure 5 - Evolution and Revolution as Organisational Grow ................................................... 33
Figure 6 - Organizational Life Cycles and Shifting Criteria of Effectiveness .......................... 34
Figure 7 - Organization Life Cycle .............................................................................................. 35
Figure 8 – Five Forces Michael E. Porter .................................................................................... 38
Figure 9 - The Relationship between Culture Types and Individual Consequences ................ 47
Figure 10 - Corporate transformations as a countercurrent process - Krüger ........................... 49
Figure 11 - Corporate culture and effectiveness in change implementation ............................. 50
Figure 12 - Lewin's Forcefield Analysis...................................................................................... 51
Figure 13 - Lewin's Three Step Model ........................................................................................ 52
Figure 14 - Keys success factors in change management .......................................................... 55
Figure 15 - Stage of Competence development - Hersey & Blanchard .................................... 57
Figure 16 - Styles of Management - Hersey & Blanchard ......................................................... 59
Figure 17 - Situational leadership - Hersey & Blanchard .......................................................... 61
7
Chapter 1 : Introduction
1.1.Context of the research
Whatever the kind of organization, public, private or associative, it is impossible
nowadays to rest with one's achievements. The phenomenon of globalization generates an
enlarged competition which impacts on all sectors of activity and compels all types of
organizations to evolve and change much more quickly than in the past. The change is a state
that is part of the life of an organization and it incessantly becomes more difficult (Linstead
and Pullen 2009).
The expression "Organizational Change" historically refers to the alterations that may
occur in an organization. These transformations can be of structural, technological or strategic
orders .This concept of organizational change equally includes today the taking into account
of cultural values and cultural attitudes. The simple word "change" in all kinds of organization
deliberate or unexpected, internal or external, implies the taking into account of a great
number of variables whatever they may be financial, structural, cultural or behavioural. The
change has a direct influence on the conditions of work, the structure of the organization, the
roles and the behaviour of the organization.
Within a constantly evolutionary economic environment, the ability of an organization
to develop, to change, is compulsory, and it involves its viability for a more or less long
period. In order to survive, an organization must be able to change and adopt a flexible and
dynamic attitude to implement this change. In a highly competitive middle, the organizations
need to go ahead and control the change by being performing leaders. Considering that the
complexity of change management, a great deal of organizations have wonder on how
manage a change to come to a successful change.
1.2.Why should managing the process of change be studied?
The surrounding in which the organizations move has changed and progress since the
beginning whatever the technological, political, legal economic or social level might have
8
been. Consequently, the numerous researches that have been conducted, the books, the
articles and magazines devoted to the theories of organization have also met deep evolutions.
In the middle of the 20th century, the economic context was characterised by an offer lower
than the demand of goods and services. This was giving the guarantee of a certain
stability that the majority of nowadays enterprises can no longer profit by as they are forced to
react to a permanent change, unlike the time when progressive evolutions took place.
Upheaval-oriented changes happened less frequently.
Today, the phenomenon of globalization has modified the rules; the conditions of
success are not the same as in the past. The actual stake of an organization, more precisely of
an enterprise, is to react and adjust itself to the evolutions of the environment. Besides, the
organization must continuously search for new opportunities of development, of economies of
scale with the aim to further its profits and growth. These solutions intervene not, only to
answer to the pressures of the competition or of the technological steps, but also to anticipate
the change (Kerber and Buono, 2005). An organization that succeeds in implementing change
process will favoured its chances to generate profits. That is why to succeed in implementing
a change process has become crucial.
Although numerous researches have been led concerning the implementing change
process and how to successfully establish a change, these theories are not often applied or
partially applied by the organizations. Nowadays, a great number of projects of implementing
change process have still proved to be a failure. Several studies have proved that 70 per cent
of the implemented changes in an organization have met such failure (J.Kotter, 1995-
Beer&Nohria,2002-McKinsay&Company,2008). These results show an important rate of
failure in what concerns the accomplishment of the implementing of change and confirm the
relative complexity of its realization. However, the different studies concerning the change
implementation have also been criticised because they didn't have an appropriate approach.
Actually, they have been blamed for not taking into account the profitability, the costs, and to
have ignored the complexity of implementing the change in an organization
(MacDonald,1998-Kotter,1998-Abraham,2000). These observations have led to a recent
further development of researches on this subject.
9
The proliferation of advice leads to a certain confusion when implementing the change
process and the means used to favour its implementing show to be heavy and important
whatever the human and economic level are concerned (Beer& Norhia-"cracking the code of
change",2002 ). Another reason why implementing change process failed would be caused by
a lack of leadership. The change may be generated not only by a steady evolving environment
but it may also be due to the life-cycle of the organization, its development, its growth
(LarryE.Greiner, 1972-RobertE.Quinn&and Quinn Cameron,1983), its ageing (buildings
,machines ,manpower). The strategy to develop and renew itself becomes then primordial at
all organization level, let it be individual or organizational. Thus, the change within an
organization may refer to any alteration in activities or tasks.
1.3.Why should leadership in the process of change be studied?
The five last decades have witnessed a spurt of writing about leadership. There are
several hundred theories of leadership (Nikkilä, 1994), but no one is defining “the best”
leadership practices, and leadership can be interpreted differently by each one. The leadership
could be defined as the capacity to reach high but nonetheless feasible objectives, having in
the same time the will and the ability to supervise and manage a person or a group of persons
in relation with the "job" or the function that has to be achieved (Hersey-Blanchard,1977).
Therefore, the leadership is tightly linked to the context in which the leader moves . « For
example, when one talks about leading a meeting, the meaning of leadership is portrayed
from the chairperson or somebody who facilitates it. With respect to leading a tour, a closer
consideration is given to the tour guide. However, leading a market may employ a leader in a
very real sense as the top player, unlike the two previous examples. This shows that leaders
should have qualities which may not be easily possessed by other players or leaders” (Ph.
Daudi, 2009). Philippe Daudy describes the leader as a person having rare abilities that allow
him to differentiate himself from the other actors of the economic world. The leader must
have a "high added value".
The changes in the actual economic environment never cease to increase .The more an
organisation is able to change the more it is liable to grow in a rather important way (Edward
E. Lawler III & Christopher G. Worley, « Reward Systems, Motivation and Organizational
Change », January 2006) .The changes in the organisation may aim to resettle its mission, to
10
restructure and adopt new technologies ,a higher co-operation ,total quality management
programs, re-engenering ,mergers… (http://managementhelp.org/mgmnt/orgchnge.htm). In
this kind of situations, the role of the leader will consist in creating a structure able to answer
and adapt itself to change .The concept of transformational leadership is highly regarded as
being one of the best exemplary style of leadership. Eisenbach et. Al. (1999) has shown
through descriptive researches that the transformational leaders were those who adopted the
processes of change. In 1989, Ropo states that transformational activities are required mainly
to change things in the organization. Furthermore, transformational leadership aims at
reaching significant changes in the organization
1.4.How is organization identity essential in the process of change?
In addition to the issues discussed above, the issue of organizational identity is debated
through the role of leaders in moving the image and the culture of their organizations. In the
context of a fast changing world and increasing pressures from the environment, a solid but
flexible organizational identity is an important factor for the success of an organization.
Maintaining an effective organizational identity is becoming one of the major challenges
leaders have to face. “Opinions and impressions, feelings and fantasies, hopes and
expectations expressed by employees, suppliers, customers, shareholders, governments, and
their regulatory agents as well as community members, the general public, the media, and
political activists, whether positive or negative, all contribute to defining the identity of an
organization...”(Hatch and Schultz, 2004, p.1). Additionally, media is playing an important
role and indicates differences between corporate images and organizational actions. Through
new technologies, such as just-in-time inventory, other stakeholders are more closely involved
in the organization. This creates stronger dependencies between the organization and those
stakeholders. These two aspects lead to a higher openness to external parts of the
organization and its identity (Hatch and Schultz, 2004). Furthermore, Dutton and Dukerich
(2004) indicate that organizational identity is related to personal motivation. According to
many studies, identity is one aspect which is related to the successful outcome of an
organization. It is seen as a key factor to be successful in a situation of organizational change.
Understanding, responding to and managing change are primary skills increasingly required
of managers. However, change is reciprocal: changes that managers make to their
organizations can also affect the nature of managerial work Stewart (1991) describes how
11
changes in organizations affect the kinds of jobs that managers have to do amid the shifting
nature of their lives and careers. These include: Wider networking, flatter hierarchies of
authority, reduced middle management cohorts with more responsible roles, less predictable
career paths and greater choices in their work and careers.
1.5.Identity the change in organization needs to be managed
To state that organizational identity is essential to be effective is not adequate by itself.
The issue is to know how to identify the change needs to be managed. In fact, identity is
related to human behaviour, it is a research field arising from the sociological and
psychological domains. Thus, it requires leaders to have specific skills concerning social
relationships in order to understand and to deal with actions and reactions of people. In that
sense, Chemers (1997) referred to Hour and Shamir (1993), who found transformational
leaders transform “the values, preferences, and aspirations of followers from self-interest to
collective interests” (p.89). As the organizational identity is based, influenced and
transformed by members of the organization, it would be interesting to investigate this in a
context of leadership and show how a leader can influence it. To adopt a transformational
leadership style is indicated to be important and successful in situations of change; it is
therefore interesting to study how the different characteristics of transformational leadership
can influence, adapt or transform an organizational identity. Moreover, several
recommendations for leaders are available on the way to implement change effectively in
organizations. Therefore, this study concentrates on gathering the key concepts of change and
focusing on the fundamental role of leadership and transformational leadership during the
process of change.
12
Chapter 2 : Purpose of the research
Firstly I will set out the main questions to which I will try to answer throughout my
research together with the underlying questions linked to this study.
Secondly I will set out the objectives of my research together with its prospects.
2.1. Research Questions.
To begin with, I am going to set out the main questions which have guided my
research , and after ,the questions linked to the research question .
2.1.1. Main research question.
The theme of my research will be guided in order to answer two main questions: What
are the roles of the leader within an implementing change process? What is the place held by
the human factor within the implementing of change?
After I have defined a few basic elements of the implementation of change, I will underline
the role of the leader in this implementation together with his influence to successfully
manage a project. Afterwards, I will underline the role of the human factor when
implementing a change process within an organization.
2.1.2. Related research questions.
To deal with the roles of the leader and the importance of the human factor when
implementing a change process demands some beforehand acquired knowledges of the
subject consequently, the following questions will be answered in order to allow a complete
understanding of the subject.
What are the types of changes?
What are the reasons for change?
What are the main key-factors within an implementing change process?
What are the brakes when setting an implementation?
13
Once all those questions will be given an appropriate answer, it will then be easier to outline
and define the roles of the leader in this implementation process, notably in what concerns the
role of the human factor and the ability to manage it in order to optimize the implementation
change success .
2.3. Research objective
As I have mentioned previously, my thesis aims to allow a global understanding of the
interest for a change within an organization, but also and above all, of the different variables
and factors which will have to be controlled by the leader to reach a change that will reveal to
be a success. We also accept a failure which on no account will prove to be a bad experience
as far as we shall draw good conclusions to avoid repeating the same mistakes in the future.
The change within an organization entails the taking into account and the control of the
different key elements which will be detailed in my theoretical framework. My
professional experiences have allowed me to participate to the implementation of change
within an enterprise and I have then realized how difficult it was to implement a change.
Furthermore, thanks to an active participation, these experiences have allowed me to analyse
and to notice that one of the main sources of failures or brakes to the progress of our projects
were due to the behaviour of some people taking part in the project. Afterwards my researches
have taught me that the problems encountered through my experiences were not isolated
cases.
My main objective when realizing this thesis will therefore be to give prominence to
the role of the manager leader in the managing of his teams, his ability to create a favourable
environment for work in order to allow a group cohesion and also reach the objectives the
organization aspires to.
14
Chapter 3 : Methodology
3.1. Justification and motivation
“Methodology is a mode of thinking, but it is also a mode of acting. It contains a number of
concepts, which try to describe the steps and relations needed in the process of creating and
searching for new knowledge” Igeman Arbnor & Björn Bjerke
The objective of this chapter is to enumerate the choices which are going to direct the
approach of my research together with the specificities that are determining the interest of this
research. The aim of this part will also be to explain the method used to allow a total
understanding of the intrinsic characteristics linked to this very matter. This chapter will then
offer the opportunity to express my choices in the gathering of data by putting the stress on
advantages and disadvantages which will impact my research.
For a year and a half, my first professional experience has led me to participate to the
growth and implement change in a company; I then could confront the theoretical approaches
I came through during my training as Manager and Consulting, with a real practical situation.
This opportunity was therefore the occasion to observe the characteristics and expectations of
the senior manager of a small enterprise (10employees) by setting myself between the senior
manager and the employees of this enterprise.
I directed and realized these changes as an autodidact, and I have been deeply
surprised, dumbfounded and at the same time interested by the observation of obvious
dysfunctions. The various documentary researches undertook afterwards have allowed me to
isolate one of the main causes of failure when you manage a change, and that is the human
factor .This very human factor is, for the greatest part, the cause of the difficulties I met
through my professional experience. This is why I decided to go deeply into that matter.
Therefore, the main purpose of the research will hence to explicate and understand the
outstanding importance of the human factor in implementing change process.
15
3.2. Research approach
3.2.1. Empirical research strategy
The objective of my research is to understand and analyse that one must take into
consideration the human factor in the implementing change process. I then build my research
through the help of tangible cases associated with the sharing of knowledge of
professionals who have been used to managing this implementing change process linked to
human factor. These people will have necessarily participated to the whole realization of
change project implementation or at least to its application.
It is with this perspective in mind that the empirical part of my research will be based
on two axles. The first one will be the analysis of a case study of establishing a change based
on my own enterprise experience. The second will result from the realization of interviews
with managers who are or have been confronted to implement change in their professional
life.
3.2.2. Interpretive framework
« Interpretive research methods are based on an assumption of subjective human experience
as ontologically real and accessible through dialogue within a qualitative framework »
(Terre-Blanche and Kelly, 1999)
In other words, the main interest of this concept of interpretation is to understand and
analyse all experiences gathered through a qualitative investigation.
As I previously explained, the realization of my thesis will be based on the use of a
case founded on my own experience in enterprise. In this context, I will be brought to express
the wishes, positions, and actions of my superiors and also of my subordinates. This precise
phase will lead me to develop the interpretation of the expectations and behaviours of people
working in my immediate vicinity.
Which is more, the choice I made to interview managers to obtain a better
understanding of their own role within the process of implementing change. The way I will
render these interviews will be mainly based on my ability to understand and interpret both
obligations and concerns of one another within their respective role.
16
3.2.3. Scientific approach
« The systematic accumulation of knowledge is essential to progress in any profession…
however, theory and practice must be constantly interactive. Theory without practices is
empty and practice without theory is blind». Cross, 1981, p110
This sentence highlights the importance of the interdependency of theory and
empirical research. In other words, it is essential to master the positioning between the
theatrical part and the empirical research. In this way, it is primordial to choose de right
scientific approach, in accordance to the empirical research and vice versa, in order to write a
successful thesis. This approach unable me to switch between theories and practices
throughout my research. To reach this objective, my empirical research will be relying on
theoretical material through my literature review, what should lead me to formulate
hypothesis.
3.3. Qualitative approach
To establish a change in the very heart of a company is not an easy task. Actually, as it has
already been proved, there are plenty of variables to consider when implementing change.
These variables transform the change process into something complex and risky. The
important numbers of failures when launching a change justifies the interest that could be
borne with regards to this subject in order to identify the main cause of failure.
Considering this complexity, my research will be based on a qualitative approach through the
use of a concrete and real case which will show the interest to facilitate a perfect
understanding of the existence of human factor in the implementing. Although the use of one
single case will have the perverse effect of generalizing the results of this study, the tools used
for this purpose will nonetheless be able to be applied to all kind of organization.
That is why, keeping in mind the aim of going deeply into my research, the study of a case
will be completed by the carrying out of the interview managers. The interest of these
interviews will be to discern the way they apply implement change in a practical case, and the
place reserved as well as the developed arguments dedicated to human factors when
implementing change in their company.
17
3.4. Data collection
3.4.1. Primary data
3.4.1.1. Case Study
The study, which is at the basis of the realization of my research, is an authentic case
and it will be founded on my very own experience in enterprise where I have been a salaried
for roughly more than one year and a half. The study of this case will consist on an objective
and impartial analysis. As this case is not officially published, and in order to protect the
confidentiality we shall call this enterprise "Alpha". This firm is a yacht insurance brokerage
agency.
The building trade of insurance brokerage agency is to found the best insurance at the
lower price for their clients. To reach this objective, the insurance brokerage company
develops agreements with national or international insurance companies to allow him to sell
insurance products. In facts, an insurance brokerage agency is an intermediary between his
clients and insurance companies.
Alpha has been bought out by the actual owner in 2008. When the actual owner
bought this agency, all the management of the firm was made without management software
and with a poor marketing investment. This confronts the actual owner to reorganize the
major part of the management of the firm, implementing a specific management software
package (controlling all the process of new contract creation, contract renewal, the
accountancy process, the cost control management, insuring the transparency regarding
insurance companies‟ requirements...) and developed the major marketing tools in order to
increment our visibility at an national and international level according to our product
specificity.
This special study case seems very interesting to me because of my specific role in this
enterprise. Actually, my main target was to establish solutions in partnership with my superior
and then to develop and apply them. This opportunity has therefore allowed me to better
conceptualize the relationship between an enterprise manager and his employees. In fact, this
strategic position gave me to understand the needs, the expectations, the concerns of
18
a manager, and to confront them to the needs, the expectations and the preoccupations of his
employees.
The chapter 5 of this thesis will then be centred on the analysis of this practical case of
implementing change inside this enterprise. Besides, this chapter will offer the opportunity to
confront the methods of implementing change with the theories of the implement of change
quoted in my Literature Review.
To describe the methods of management with the theories of this implementing of
change will offer the interest of analysing and confronting the methods of management with
the different analyses and researches realized by well-known and acknowledged authors.
To establish the differences of the researches realized by famous theoreticians, based on
various experiences and analyses having led to the final result of the established theories, with
the methods and uses of these theories will offer the interest to measure the use of these
theories in the methods of the actual management. The aim of this analysis will then be to
evaluate the use of the theory for a manager moving in a logic of implementing change
process.
3.4.1.2. Interviews
The settlement of this change is a complex process to lead and approach because of
the multiplicity of the elements to take into consideration as the change is being operated
.That is why it has appeared to me important to contact and interview professionals who had
been confronted to this type of problematic .
A great deal of studies and articles reveal that the greatest part of the failures when
implementing change was mainly due to a bad estimation of the human factor in the driving
of the change (McKinsey2003).
Of course, these interviews will only give a partial view of the way to implement
change together with the taking into consideration of the human factor in an implementing
change process; nonetheless, they will allow a better comprehension and interpretation of a
true reality.
The analysis of these interviews will then permit to understand the theoretical approach of
implementing change in a practical case.
19
The interest of it all will then be to underline where the theory and the reality meet.
First Interview:
Interview with Christophe RAMON, IT Systems manager in a French multinational.
The firm is a company founded in 1959. At that time, the activity of this company was
specialized in processing of maerl (seaweed‟s fragment rich in limestone). Since then the
company has continued to develop, this enterprise has a turnover of 2 milliards Euros,
employs more than 6000 persons among which more than 50% work abroad in more than 60
countries into 13 business lines: Agro-supplies, professional hygiene, Mineral and industrial
products, Magnesite, Plastics, Garden products, Food phosphates, marine biotechnologies,
Operation and transformation of seaweed, Naval equipment, Pastries, Cooked meat and
seafood.
Mr Ramon has been working in this firm for roughly 20 years. In this interview, he
will explain the complexity of change management in an IT change process, the issues they
met and the results of one IT change project.
Second Interview:
Interview with G. L.J. , Chief Executive Officer in the same French multinational than
in the first interview.
As I present previously, this firm is a multinational developed in different line of
business. With this CEO, we will focus on, a Spanish subsidiary of this multinational, bought
in January 2000 by the French multinational (60%) and a Grecian Compagny (40%).
This subsidiary is a firm which produces and commercializes two kinds of magnesia:
- Caustic magnesia for animal feeding, fertilizers and varied industrial uses such as
pulps or flames retarding panels.
- Fireproof Magnesia for iron and steel industry.
This firm extracts its raw materials from its own mine then transforms them according
to complex industrial processes before the commercialization of fully or semifinished
products. Therefore this firm is depending on the natural resources of this mine.
20
Few years ago, the firm has to face to a major problem: the resources of their mine. G.
L.J. will speak us about the projects of found new mines, optimize production machinery and
develop sale forces.
Third interview:
Meeting with A. RAGUET, operational manager in a French Company.
Created in 2000, the firm is specialized in the manufacture of effervescent granulated
powders sold as such in bags or under the shape of tablets. These enterprise products are
aimed at industrial partners working food, dietetics, pharmaceuticals, cosmetics, veterinary
nets or nutritious complements for animals. This company employs 7 persons.
If the work instrument of production of this firm is rather complex, the different
circuits of information‟s flows is on the whole rather simple. The main need concerning the
follow-up of information and the total traceability are imperative in what concerns this sector
of activity, and of course this applies for each batch of manufacture.
During this interview, A. RAGUET will explain us the change management process he
apply in an Information System Management change.
3.4.2. Secondary data
The use of pertinent data gathered in books, news articles and internet sites allows a
better theoretical understanding of the subject as a whole. The books selected in the literature
review have then given me the possibility to increase not only my knowledge‟s but also to
build a strong theoretic framework. The use of news articles and internet sites give access to
snippets of informations often focused on one part of a precise subject from which emerge
both concepts and hypotheses .By their simplicity of creation and publication, unlike books,
they give the opportunity to compare with subjects connected with actual facts .The
combination between books, news articles and internet sites then give access to complete as
well as to partial researches which ,once they have been put together ,give access to a
theoretical basis rich in informations.
21
Chapter 4 : Theoretical Framework
4.1. Understand the Change within Organizational and business
Systems
This research proposes that in the actual economic world, change management is a
critical issue for each type of organizations. Since the industrial revolution, the stakes of
handling change have never been so high.
In the actual economic environment, most traditional and successful organizations
have accepted the fact that they are constraint to constantly evolve or be doomed to disappear;
they have to change or die (Beer and Nohria, 2002). Due to endogenous and/or exogenous
causes, changes have to be implemented within each organization at some stage of their
existence. It can also be introduce in order to meet certain market growth expectations, or to
predict and adapt to eventual problems, etc. The ability to adapt and change is the key to
survive for organizations and it is particulary true for private firms. Elrod and Tippert (2002)
maintain that change is “pervasive - it is a constant and common element that impacts
humankind individually and organizationally, day in and day out” (p.273).
As De Wit and Meyer (2004) argued in their book “Strategy: Process, Content,
Context: an International Perspective”, “It is not a question of whether firms should change,
but of where, how and in what direction they must change. Firms must constantly be aligned
with their environments, either by reacting to external events, or by proactively shaping
the businesses in which they operate” (p.164).
Therefore, a distinction can be made between planned and unplanned change.
Planned change is a deliberate and conscious decision to improve a part or the whole
organization. It allow to change the system in a more deep and fundamental way. An
unplanned change happens when the organization is constrained to react to some
unanticipated external change, coming from the firm's environment. In unplanned change, the
answer is adaptive and habitually spontaneous.
Organizations and firms in particular are complex, multifaceted and no one is
similar. In order to have a clearer outline and understanding of implications of change for
22
these firms, a clear distinction has to be made between organizations which conducts their
own business, handle and manage their limited resources, and organizes the production of
services, and products, and how it is able to create value to customers. The organizational
structure refers to the division of tasks and people into smaller clusters. According to De Wit
and Meyer (2004), “all organizations need at least some division of labour in order to
function efficiently and effectively, requiring them to structure the organization in smaller
parts”. They also argue that the organizational system would considered “how the individuals
populating a firm (organization) have been configured, and relate to one another, with the
intention of facilitating the business system.” (De Wit and Meyer, 2004, p.165).
The structural changes concern the parts and configuration of the organization.
When the structure has to be changed, some functions and/or departments have to adapt
themselves to the new structure and appropriate it. Some department or function can be giving
up or transferred due to their inefficiency or their inaccuracy, etc. Several techniques can be
used by the manager leader to realise organisational change, and the following methods are
the most used in the corporate world for restructuring (Robbins and Cenzo, 2005).
The first method which can be used is downsizing. The main objective is to focus
all the efforts of the enterprise on the most beneficial activities and give up the other ones
which are not profitable, or not profitable enough. It means focus on the core business of the
organization, with the goal of cutting costs and maximising profits. The second method is
delaying. This step requires to concentrate all efforts on the most profitable activities and to
transfer those that impede the functioning of the activity to other parties (competitors,
suppliers or subsidiaries). The third method is divesting. This technic means the sale of all
unneeded equipment. This is relatively common in situations of organisation grows or when
merger occur. The impacts of these changes are directly visible on the organisational structure
level of the firm and the corporate culture level as well. When reorganisations occur on a
structural level, "the authority relationships within the hierarchy are temporarily or definitely
modified" - Franziska Fritz & Philippe Massart (2007 - The Process of Change: The Role and
Impact of Leadership). These changes disrupt the status quo, the company's employees are
therefore constrained to adapt to a new emergent order and hierarchy. The emergence of new
responsibilities could change levels of hierarchy. After the change, a phase control can be
implemented by either the top or bottom of the organization. On the ground, the control is
frequently achieved by lower levels for large organizations, whereas in a small organization,
control is exercised by higher levels.
23
About management system, it is interesting to compare the modern western
management models and other models of existing management. For example, the Japanese
management model and the Swedish model. According to Masaaki Imai in his book "Strategy
process, content, context” (De Wit and Meyer, 2004), the Japanese management system is
characterized by a continuous improvement process, incorporating the professional life, social
and family life. Job functions from the Japanese perception include all segments of the
organization and involve improvement and maintenance. “Consensus, the hidden code of
Swedish leadership is a book written to highlight the enigma of the Swedish leadership style
of getting everyone to agree at all levels of decision making” (Alexander, 2008). This
incorporates a strong attention on team-work, non-confrontational style of communication,
and coaching. These characteristics could be described as a Swedish model on management
styles. However the western management system is consider as vertical and individualistic,
often standardized and rather inflexible.
When changes occur within the organization, taking into account the expectations
of employees has become indispensable. “The difference between failure and success in
implementing change in an organization depends highly on the people themselves” Franziska
Fritz & Philippe Massart (2007). This concept shows the importance that must allocate the
agent of change on identifying the expectations of employees, observing their attitudes and
behavior during the implementation of change. Therefore the change agent now incorporates
changes at the individual level in order to encourage the organization to move in a new
direction. In their publication "The tools of change in cooperation", Christensen, Marx and
Stevenson, 2006 states that “managers can use a variety of carrots and sticks to encourage
people to work together and accomplish change. Their ability to get results depends on
selecting tools that match the circumstances they face”. (p.73). According to the authors, the
main key in change management is that it is imperative to make each stakeholder working
together in a methodical way. In this article, Christensen and al. presents the example of Durk
Jager, former CEO of Procter and Gamble. D. Jager unfortunately failed in implementing a
restructuring program which had the aim of changing Procter and Gamble‟s culture. The main
reason of that failure is that Jager did not include the employees in the process of change
which is, according to the authors, “a vital requirement of all change campaigns”
(Christensen et al., 2006, p.73).
According to Christensen, Marx and Stevenson (2006), the preliminary step before any
change initiative is to assess the level of agreement. This concept is evaluated along two
24
dimensions. The first dimension is “the extent to which people agree on what they want: the
results they seek from their participation in the enterprise; their values and priorities; and
which trade-offs they are willing to make in order to achieve those results” (Clayton et al.,
2006, p.74). The second dimension is “the extent to which people agree on cause and effect,
which actions will lead to the desired outcome. When people have a shared understanding of
cause and effect, they will probably agree about which processes to adopt” (Christensen et
al., 2006, p.73). Their “Agreement Matrix” sketched those dimensions. The vertical axis
represents agreement by firm‟s people on what they need; the horizontal axis represents their
agreement on cause and effect. The salaried are represented on the upper-left quadrant (A),
for example, share requirements for what they will benefit from taking part of the firm, even
if everyone can have a different vision of the type of actions that will be needed to meet these
expectations. People are result oriented, “just do it” (Service Management Art -
http://www.itsmf.ca/documents/show.php/2854/ITIL%20and%20Management%20Commitme
nt%20v1.pdf). In the upper right quadrant (B) are organizations whose employees agree on
what they hopes and how to implement to get there. Employees are Automatic Group thinking
(Service Management Art). “A clear consensus on the two dimensions makes the
organization’s culture highly hard to change because the people are generally satisfied with
what they get out of working in the organization and agree strongly about how to maintain
that status quo” (Christensen et al., 2006, p.73). Several organizations on the lower-right part
of the matrix (C) are those that involve a mess of contractors. Employees show little
investment to achieve the objectives of the company, but the procedures are strictly adhered
to, if they believe that their actions will achieve the desired results. People understand the
causes and effects of improvement (Service Management Art). Finally, the left lower quadrant
(D) represents employees who do not agree on what they want and do not understand how the
world works. People show disparate interest in improvement (Service Management Art).
There is no best position in the matrix and the relevance of this tool is to identify where the
organization is. For the leader, the agreement matrix helps him to know the degree of the
people‟s acceptance for change (figure 1).
Another aspect of change from an individual perspective is better recruitment,
selection and replacement (Burke, 2002).
The selection method‟s goal is to recruit the right people to assign them the right
function and employment. This is done to ease the major change effort and to seek and find
people with the ability to integrate the firm with a positive and participative dynamic.
25
The replacement approach is to recruit a new leader from within the organization.
But in reality, the new leader are coming from outside in most cases. This move brings new
input, approaches and leadership style to the organization.
Figure 1 - The Agreement Matrix - Source: Franziska Fritz & Philippe Massart (2007) figure based on “The tools of
cooperation and change”, Christensen, Clayton M., Marx, Matt and Stevenson Howard H., Harvard Business review,
Oct 2006, p.84, www.hbr.org
Technological changes also have an important impact on the functioning of the
firm. In effect, these gives rise to new methods and new work processes that it is imperative to
define when implementing changes. For example, the introduction of new software often
leads to new techniques of work and will requires adaptation regarding company‟s employees.
The organization does not evolve alone, it interacts with its environment. Changes in
the external environment require companies to pay attention to these evolutions in order to
stay in the competition. In this context, the organization may be anticipating changes in its
environment, so as to create new opportunities or react to these changes to stay competitive.
For example: “The organization might change its technology in order to stay competitive in
the market or to become a first-mover” (Franziska Fritz & Philippe Massart - 2007).
A B
D C
Ex
ten
t to
whic
h p
eople
agre
e on w
hat
they
wan
t
No
co
nse
nsu
s
Bro
ad c
onse
nsu
s
No consensus Broad consensus
Extent to which people agree on cause and effect
26
However, if the concept is easy to understand, the reality is far from simple. The
company who has devoted significant investment both financially and human, show some
difficulty with new changes.The company could be “investment lock-in” and “Any gradual
movement away from the past investment will increase the risk of not earning the big amount
of sunk cost” (De Wit and Meyer, 2004, p.172). In addition, organizations can also be
“system lock-in […] into an open standard (e.g. sizes in inches, GAAP accounting rules) or
proprietary system (e.g. Windows operating system, SAP enterprise resource planning
software). Once the firm has implemented a standard or system, switching to another
platform could not be done gradually or at low cost” (De Wit and Meyer, 2004, p.172).
In addition, changes can be seen at the business system level. A private or public organisation
has its own way of creating value-added. They turn or add an input to commercialize its own
products and services (output). A business system is unique for each organization. Therefore,
Company's organization is closely linked to its business system. Organizational changes will
have an impact on the business system of the firm, and vice versa. It is therefore clear that a
"business system is successful only if it creates superior value for the buyers” (De Wit and
Meyer, 2004, p.164). The characteristics of the business system are threefold on which the
organization can focus on change situation (De Wit and Meyer, 2004) :
- First characteristic: the value proposition. “In order to attract more customers and to
fit more closely their needs, an organization should be able to supply a particular
product or service. To be attractive, these outputs must target a particular segment of
the market and have superior attributes compared with other ones (e.g. the price, the
image…)” (De Wit and Meyer, 2004, p.231). I for some reason, products or services
sold do not meet consumer expectations, the organization will necessarily have to
decide to change.
- Second characteristic: the value chain. The organization must have the ability to
develop and deliver its products or services and create value effectively (R & D,
logistics ...). At this stage, technology is a point that we should not underestimate.
When the production system becomes obsolete, the organization should be replaced
with newer equipment.
- Third characteristic: stock of assets. the element of a business system consists of the
base of the resource needed to perform the value-adding activities (know-how,
relationships). These elements can serve as a basis for a superior product/service
27
offering. In order to create a competitive advantage, an “alignment must be achieved
between all three elements of a business system”.
Change can be concentrated on this these three characteristics of the business system.
4.2. Types of change
4.2.1 Discontinuous and Continuous Change
Experts tend to agree on the fact that the distinction between discontinuous and continuous
Changes has led to our current approach of the Change process.
The common assumption then consists in differentiating two kinds of changes:
Continuous change based on an evolutionary approach
Discontinuous change, based on a revolutionary approach
De Wit and Meyer qualify these two elements as “the dichotomy between discontinuous
renewal perspective and the continuous renewal perspective.” (De Wit and Meyer, 2004,
p.182).
It can occur that an immediate change would be more appropriate than a continuous one,
according to the situation to be dealt. The characteristics of the discontinuous renewal
perspective are revolution over evolution, disruptive innovation, creative destruction, radical
pace of change, sudden break of the status quo, a stable and unstable alternation of states and
a punctuated equilibrium. (De Wit and Meyer, 2004, p.182)
This former approach has been mainly adopted in western companies, or in companies from
the MEDCs (more economically developed countries). An example of a discontinuous
renewal perspective is the Splitting of the British gas in 1997; The liberalization of residential
market consumption played a big role in this radical move (from a continuous to a
discontinuous approach). For instance, British Gas Company radically changed its retailing
policy, from a simple gas supply to essential household services, as the best way to ensure
their sustainability.
28
This move enabled the company to make a step toward a competitive environment while
asserting their competitiveness, and reorganized their structure in a more customer orientated
way, appearing as a service provider.
Within 3 years, the company has broaden its product range which now integrates everything it
needs to, keeping in mind the slogan: care of the essential. By 2001, 90% of its operations
were represented by service supplies to customers (British household).
Nevertheless, it can occur that a continuous change would be rather more efficient
that an abrupt one. The main characteristics of this approach are: Evolution over revolution,
uninterrupted improvement, organic adaptation, moderate and undramatic change, gradual
and steady pace of change, continuous adjustment, and a persistent transient state and gradual
development. (De Wit and Meyer, 2004). This style of change is usually the one preferred in
Japan.
The concept of Revolutionary change is used to describe an immediate and radical change
that occurs in a rather short while. The goal of such a change is to get rid of the status quo
situation and to replace it with new orientations.
Revolutionary change usually takes place to put a final point to the common way of doing
things and thinking about the company‟s tactics. For instance, reacting to deeply rooted habits
and routines no longer suitable for the company, no other change (at a smaller scale) would
have been as efficient as a revolutionary one. Indeed, such routines or habits can paralyze the
company in a rigid business and organizational system.
According to De Wit and Meyer, 2004, the main factors which will trigger a revolutionary
change are the following: competitive pressure, regulatory pressure and first-mover
advantage. Willing to adapt to our post-modern era, organizations have to deal with as much
chaos as order and change is a constantly dynamic. (Kavanagh and Ashkanasy, 2006).
A number of theoretical and conceptual models and theories to be used and developed as
analytical tools of the process of change are shown below:
29
1. Evolution and Revolution Dealing with the paradox are presented in figure 2
Evolution and Revolution
Dealing with the paradox
Figure 2 - Evolution and Revolution Dealing with the Paradox - Source: Synthesis from De Wit and Meyer (2004)
2. Reengineering work by Hammer (1993). According to this former,
reengineering is: “a fundamental rethinking and drastic redesign of business processes to
accomplish dramatic improvements in critical, contemporary measures of performance: in
cost, quality, service and speed”. Figure 3 presents a tool haw to reengineering work by
Hammer (1990).
Reengineering work
The Essence
Figure 3 - Reengineering Work - Source: Synthesis from Hammer (1990), as cited in De Wit and Mayer (2004)
30
3. Convergence and Upheaval is presented by Tushman and Romanelli (1985) stated scope of
Frame-Breaking Change in the model is shown below:
Figure 4 - Scope of Frame-Braking Change - Source: Tushman and Romanelli (1985)
4.2.2. Endogenous and exogenous who lead to change
A. Endogenous change forces
Endogenous forces to change in an organization are often due to its life cycle. The
publication in 1972 of "Evolution and Revolution as Organizations Growth" (Harvard
Business Review -50) by Larry E. Greiner has identified five main phases ("The five phases
of growth") which require changes during the growth of an organization:
Phase 1: Creativity...
This phase corresponds to the creation of an organization during which its main
objectives are: to create a new product and a new market. At that moment, the organization
is characterized by a physical and mental investment dedicated to product and selling and in
the same time it shows certain contempt for management. The communication is frequent and
in a way informal. As the company grows, the increases of production ask for a better
organization all together with an increase of the number of employees both on the production
level and on the management level.
Reformed mission and core values
Altered power and status
Reorganization
Revised interaction patterns
New executives
31
The organization cannot then be simply managed by the means of an informal
communication, it has to be structured. The founders of this organization are then facing a
situation that impels them to assume responsibilities of management they do not wish. It is at
that moment, according to L.E Greiner that the leadership crisis arises. During that time the
founders of the company will have to delegate some responsibilities by the employment of a
business manager having knowledge and skill. This makes up one of the first phases
of important change in an organization.
Phase 2: Direction...
This phase of "Direction" is characterized by the setting of partitions between the
different services of the organization. It is also at this moment that the control of buying,
stocks and budgets creation is settled. Communication becomes more formal and impersonal
as a hierarchy of titles and positions builds. The forward integration of a new hierarchy causes
an evasion of power towards the management authority; lower- level supervisors are losing
autonomy and lower-level employees find themselves restricted by a centralized hierarchy. At
this moment a crisis of autonomy arises.
Phase 3: Delegation...
The following stage of the growth of an organization develops after the successful
establishment of its decentralization. The organization finds itself in a favourable situation
and the managers feel motivated to penetrate new markets, develop new products and
improve their reactivity. At this stage, serious problems may occur. The top executives feel
that they face a situation in which they lose control while confronted to an increased
diversification. The favourable results of the organization make the managers refer to certain
autonomy and consequently act on the fringe of the company without aiming to the
coordination of new projects and schemes of investment...within the company. “Freedom
breeds a parochial attitude ". Therefore, the top management has difficulty in getting back to
the control of the company.
Phase 4: Coordination...
This phase is characterized by the implementing of new systems allowing a better
coordination .For instance: establishing formal plans, procedures, controlled expenditures...we
32
can also observe that stock-options and company-wide profit sharing are settled in order to
endeavour a spirit of organization towards everybody.
These new systems of organization permit a better allowance of resources and at the same
time they make the capacity of control easier.
Therefore, the managers find themselves compelled to justify their actions, increasing then the
loss of confidence between line and staff, and between headquarters and the fields. So,
the excess of using systems and programs create a "red-tap crisis"; the line managers as well
as the staff directions both criticize the administrative cumbersomeness developed in the
organization.
Phase 5: Collaboration...
The phase of collaboration is characterized by its endeavour to solve the red-tap crisis
showed in phase 4. To reach that, the organization is given to favouring a greater spontaneity
by creating teams made of people having complementary abilities. The target of implementing
this kind of teams is to combine competences inner to each individuality to solve problems,
conflicts but also to manage projects...
The collaboration phase is then built within and around a more flexible environment based on
a management of the behaviours.
Larry E Greiner illustrated these 5 phases according to the following chart:
Please, refer to the next page.
33
Figure 5 - Larry E. GREINER – “Evolution and Revolution as Organisational Grow” - 1972
Robert E. Quinn and Kim Cameron has realized a study also based on the life cycle of
the organisation "Organizational Life Cycles and Shifting Criteria of Effectiveness: Some
Preliminary Evidence" Management Science 29(1983). That study can, in a very interesting
manner, lead to complete the study made by Larry E.Greiner.
In this study article, Quinn and Cameron define the life cycle of an organization according to
four major bases emerging from the analysis of the following nine theories of the life cycle of
the organization:
- Downs : Motivation for Growth (1967)
- Lippitt & Schmidt : Critical Managerial Concerns (1967)
- Scott : Strategy and Structure (1971)
- Greiner : Problems Leading to Evolution and Revolution (1972)
- Torbert : Mentality of Members (1974)
34
- Lyden : Functional Problems (1975)
- Katz & Kahn : Organizational Structure (1978)
- Adizes : Major Organizational Activities (1979)
- Kimberly : Internal Social Control, Structure of Work and Environement Realations
(1979)
Therefore, it is through these nine approaches that Quinn & Cameron have developed the four
phases of the life cycle of the organization:
1.Entreprenarial Stage 2.Collectivity Stage 3.Formalization and
Control Stage
4.Elaboration of Structure
Stage
Marshalling of
resources
Lots of ideas
Entrepreneurial
activities
Little planning and
coordination
Formation of a
« niche »
« Prime mover » has
power
Informal
communication
Sense of collectivity
Long hours spent
Sense of mission
Innovation continues
High commitment
Formalization of rules
Stable structure
Emphasis of efficiency
and maintenance
Conservatism
Institutionalized
procedures
Elaboration of structure
Decentralization
Domain expansion
Adaptation
Renewal
Figure 6 - Robert E. Quinn & Kim Cameron “Organizational Life Cycles and Shifting Criteria of Effectiveness: Some
Preliminary Evidence” - 1983
The synthesis of these two studies allows a modelling of the life cycle of the entire
organization, thus taking into account the majority of the factors of endogenous change in
relation with the growth of an organization.
35
Figure 7 - Organization Life Cycle - Adaptation from Bertrand Venard - Audencia Scool of Management
B. Exogenous change forces
The organization does not evolve by itself but in interaction with a very active circle.
A great deal of researches has proved that this circle imposes the operational and strategic
choices that the organization will make. This circle is called environment and it is the one that
will have to condition the markets through its direct influence one the organizations. As a
rule, the organization environment is defined as the whole elements external to the
organization but in relation to its activities (CERAM, 2008- The influence of environment on
the enterprise).
In a world which is becoming more complex and global (Shein, 2009 – the corporate
culture survival guide – Revised edition. Jossey-Bass, USA), organization has to face a
constantly evolutionary environment. In 1979, Michael Porter (Porter, M.E. (1979) How
Competitive Forces Shape Strategy, Harvard business Review, March/April 1979) listed five
variables having an influence on the organizations:
- The power of the client negotiation.
This client‟s power on a given market is characterized by the ability of the buyers to
negotiate. The clients degree of concentration grants them more or less power. That
stands, for instance, on an oligopsony market, (a little number of buyers are facing a
36
great number of providers thus giving them a greater power of negotiation)The
customers power of negotiation is strong when they stand all together ,when their
providers are disorganized ,when there exist products of substitution and also when the
cost of transport from one supplier to the other is low.
- The power of negotiation of the providers.
The production of an industry is bound to the providing of raw materials. Thus, there
is a battle of wills between clients and providers. Clients want to buy at the lowest
price when providers want to sell at the highest one. The power of negotiation of the
providers implies the ability of a provider to impose high prices. The resources in raw
materials, the concentrated proximity of providers, the existence of products of
substitution and the cost of transport from one provider to the other are as many
variables that will determine the power of the providers.
- The risk to see new competitors appear.
Theoretically, every enterprise should be able to enter or leave a market and that is a
threat for any firm inside any kind of market. Nonetheless, the risk to see new
competitors appear can be limited by what is commonly called "Entry Barriers". There
are different sorts of "Entry barriers":
o The entry contribution which represents the amount of necessary investments
to launch a project and also the time needed to make them profitable.
o The patents meant to protect an exclusive "know-how", thus allowing a
competitive advantage.
o The technical norms and standards, for instance UE which is compulsory to be
obeyed to distribute a product in Europe.
o The protectionist measures established by the country.
o The existence of enterprises firmly established on the market and having a
good reputation or significant market shares.
o The specific guarantee of current assets required for the production. When
specific technologies are necessary, the potential incomers are hesitant to
acquire active assets they may not resell or convert.
o The cultural barriers.
37
In the same time, obstacles to the way out are also present and must be evaluated when
wishing to enter a market. It may be difficult to leave a market when the enterprise is
made up of specific current assets, when the cost of leaving is high or when the
enterprises are interdependent.
- The existence of substitution goods
According to Porter's approach, the substitution products apply to those which come
from another industry but nonetheless able to satisfy similar needs. Porter thought that
the risk of using a substitute arises when a product is affected by the fluctuation of a
substitution product. The price elasticity of a product is directly affected by the
substitution products. As and when there are more products of substitution, the
demand becomes flexible because the consumers have a greater number of choices.
Besides, the more a substitution product satisfies a similar need, the more it becomes
difficult for an enterprise to increase its prices.
- The competitive pressure in-house the market.
The competitive pressure in-house the market can be evaluated through the
concentration of industries on the same market, in other words, through the percentage
of holding shares of this market. If the concentration ratio is high this means that the
major parts of the market share are hold by big firms. If you have a smaller number of
enterprises holding a major part of the market shares, then this sector of market is
concentrated and regarded as little competitive. On the other hand, when the
concentration ratio is low, it means that the sector of market is characterized by a great
number of competitors. Enterprises move on a competitive market. On such market,
the competition can vary in intensity (fierce, intense, moderate or weak) and it is based
on the aggressiveness of the enterprises to attempt to possess one or several
competitive advantages.
38
Figure 8 – Five Forces Michael E. Porter -Sharon Larsen - February 18th, 2009
This organization chart describes perfectly the pressures that the economic
environment can cause to an organization. Nonetheless, this approach of environment can be
completed by other variables directly affecting the functioning of an organization. Bertrand
Venard (Audencia School Management-2007) describes the organizations environment
according to 10 points:
1- The competitors, the size of the industry, the level of competition.
As shown in Porter's analysis, Bertrand Venard uses again the concept of the competition
in his definition of the environment which has an influence upon the life and the strategy
of the organization.
2- The providers, producers, estate agents, services.
The "variable" providers is active too in this analysis, nevertheless the concept of estate
agents and services has been added.
The estate cost is an important factor in the environment of an enterprise. It can act as an
opportunity or as a brake not only in what concerns the strategy of an enterprise, but also
for the strategy of its competitors or new potential in-comers.
The concept of services is then added by Bertrand Venard. In 1979,Porter's analysis aimed
mainly on the industry sector, but since then, the services sector has been considerably
39
developed, either as a service associated to the sale of a product or as the market of the
services itself. Keeping in mind the Porter's analysis on the industrial sector, we see that
the service associated to the sale of a product, provided it is a reliable one, can proved to
be a real competitive advantage.
3- The labour market, interim agencies, universities, high schools, other enterprises'
employees, trade unions.
The labour market which was not studied in Porter's analysis represents an important
factor of the enterprises environment. Actually, depending on the countries where the
enterprise is situated or in which it wishes to develop its business, the enterprise will have
to possess a perfect knowledge of the labour market. Does it provide the necessary
manpower? The required competences? What is the working flexibility? How powerful
are the trade unions?
o Concerning the competences, the education standards are primal as they allow
to know if the population of a given country has got the necessary required
skills for the functioning of an organization. This point is primordial because
the qualifications and skills vary rather much and often as the workers are not
polyvalent. Consequently, the supply and the demand of labour are not
necessarily situated in the same geographic spot.
o In a country where the labour flexibility is low, for instance France, the
presence of interim agency gives the enterprises the possibility to employ a
person for a specific or renewable period. This helps to diminish the fixed
costs of an organization which can then manage its staff either in accordance
with the seasonal possibilities of its activity sector or to adapt its working
power in case of unexpectedness.
o The power of the trade unions must also be taken into consideration. In
Europe, if we take France and Sweden as an example, the role of the trade
union is totally different. Which is more, the rate of unionization of these two
countries cannot be compared: 9.7% in 2001 for France, versus 78% for
Sweeden in 2002 (European Community -2004)
40
4- The financial markets, banks, private investments.
The rate of money acts directly on the corporate organization strategy. It then becomes
unavoidable to take into account the financial market within the organizations
environment.
5- The consumers, customers and potential users.
As showed in Porter's analysis and with the same logic, customers' or negotiation
power‟s customer are studied at that moment. The notion of users or of potential
buyers is then added to this variable. It is important to know the capacity of a market
to seduce new users. On a saturated market, new potential users are very few, the
prospects of developing market shares are therefore compromised contrary to a new or
flourishing market which offers growth perspectives concerning promising market
shares for an enterprise.
6- The techniques of production, sciences, research centres.
Within a view of toward international trade, the production techniques, sciences and
research centres for a clearly defined market are often concentrated on
specific geographic areas. For instance, concerning the pharmaceutical sector,
Germany has at its disposal strong enterprises moving in this middle and it are one of
the most powerful international actors with regards to pharmaceutical research.
Furthermore, the use of specific techniques of production limits the eventuality of new
incomers on the market. Actually, the use of specific equipments involves important
investments in current assets which become hard to convert again, and it acts as barrier
to the “natural” entry.
7- Recessions, economic growth, inflation, investment level, unemployment.
The economic context in which an organization moves or wishes to move must also be
scrupulously known. Actually, a country in which the economic rhythm of growth is
being slowed does not offer the same perspectives as an economy in expansion.
Another important factor of the economic environment is the exchange rate stability.
Indeed, to work and to develop a business trade in a country subject to a durable prices
increase leads to a loss of purchasing power of the money for the organizations as well
as for the couples (INSEE).
41
The level of investment on a market or on a precise geographic area is also a factor to
be taken into consideration. If the level of investment is important it implies that the
market is in expansion. Consequently, it will be easier for an organization to find the
possibilities of financing either through a bank or by means of private investors.
Finally, the last point of this part will deal with unemployment level. Unemployment
may have several different impacts on an organization and on the consumers. For
instance, a high rate of unemployment can lead to an increase of the contributions not
only for the organization but also for the busy workers: the State has then to finance
unemployment and more particularly must guarantee an income to the unemployed.
An unemployed person without any income is a person who does not consume, and
that cannot be envisaged for the economy of a country.
8- International and local regulations, taxes, legal and political systems.
Whatever it is international or local, the regulation is given to
establishing characteristic norms and rules of functioning. At international level, the
main organisms are OMC, FMI and the World Bank. On the local level, the European
Union, l'ALENA, l'ASEAN are in charge of the settlement of economics rules and
norms of functioning suitable to the countries of these organizations.
This implies that with regards to the country or some local agreements, the
organizations have not to respect the same legal rules, policy or taxes...
Within European Union, for instance, "since 1993, the free circulation of goods is
guaranteed within the EU. Fiscal and customs formalities linked to inta-communotary
frontier crossing have been abolished. Any person may buy, for his own use, any kind
of goods in another State member of EU without any restriction of quantity or value ".
(Service Public.fr – Administration).
This liberalization of exchanges can reveal to be a true opportunity but at the same
time a risk for an organization that is to say, the risk to see enter the market
competitive products or products of substitution in countries where the costs of
production are lower .
42
9- The population age, its social & moral values, the level of education, the influence of
belief, the ethics of work, the consumers mobility.
Each kind of population has its own specificities, history and culture. Nevertheless, if
we except History that cannot be changed, population behaviours evolve... The public
authorities have to answer, anticipate and find the solutions for these changes.
Concerning the age of the French people in the middle of the 20th century, the
population was rather young, but, nowadays France is undergoing an ageing one
which implies fundamental changes for the state as far as the legal side is concerned
(Policy of retirements, employments management...) The organizations must also
answer these developments, adapt themselves to new laws, new policies of human
resources management...
Keeping France as an example, we observe that the increase of the Muslim belief
population has driven the food mass distribution to create displays of Halal meat.
In this context Muslim populations have offered new opportunities for the enterprises.
This constitutes the emergence of a new market for France.
10- The competition of foreign enterprises, the ability of penetration of foreign markets,
the evolution of the risks of exchange rates.
The risk of seeing new incomers as Porter stated is a variable also considered in this
approach of environment. This risk is mainly focused on the arrival of foreign
incomers. Nevertheless the risks of seeing new incomers appear together with the
barriers at their entry remain at the same time unchanged.
Nonetheless, this approach includes a new variable which is: the rates of exchange that
might intervene in favour of the new incomers who produce in countries where the
value of the money is depreciated with regard to the referred market. Actually this
allows to export towards another country, goods of lower prices than those which are
locally produced. It is on the contrary for the countries which have a strong money. An
enterprise will have difficulties in commercializing its products if the prices are high.
43
Organisation
10-
International Sector
1- Industrial Sector
2- Raw material Sector
3- Human resources
Sector
4- Finacial ressources
Sector
5- Market Sector
6-
Technological Sector
7- Economic's
condition Sector
8- State Sector
9- Socio-Cultural Sector
International Context Environment
The economic environment of a market must be entirely controlled by an organization
as it has to anticipate and answer the evolutions of its environment. "Our environment
compels us to change permanently: to change means to exist tomorrow" (Atlas du
Management).
In other words, the ability for change, of an organization, and to stick to its environment
encourages its capacity to remain competitive.
To anticipate and react to the environment evolutions comes up from the ability of the
organization managers to be aware of the environment in which they move. Keeping that in
mind, the manager will be the one who will decide and successfully implement the change
with regard to his environment. Doing this, he will finally develop what will be considered as
a competitive advantage for the organization.
Figure 9 - International Context environment – Bertrand Venard – Audencia School of Management
44
4.3. Change and rigidities to change
“I'm not interested in preserving the status quo; I want to overthrow it.” Niccolo
Machiavelli (Brainy Quote, 2010)
4.3.1. Typical Organizational Rigidities to Change
Just one year after Lewin passed away, that is to say in 1948, Coch and French (1949)
published an innovating paper entitled “Overcoming Resistance to Change” (Coch and
French 1949). They conducted their research in a pyjama factory, implemented in Virginia,
USA: the Harwood Manufacturing Company (Coch and French, 1949).
This study, which led to a large number of further ones, emphasises the two following stakes:
Understand the latent explanations to such a strong people‟s resistance to change.
Draw alternatives that will help overcoming this resistance.
The authors concluded that resistance to change is omnipresent in the work place, where it
can be observed in very different ways, attitudes or behaviors.
Nevertheless, this resistance affects the environment in rather common prejudices, such as
“grievances, high turnover rates, low efficiency levels and restriction of output”. (Elrod II
and Tippett, 2002, p. 273).
Through this study, the authors highlighted the importance of participatory
management in the process of softening the resistance to change. They assumed that the direct
involvement of employees in that process was compulsory to successfully implement change
within the organization without having to face an active resistance to change.
The effects of not involving employees, who are directly concerned by the implications of
change, can be devastating. It can waste the potential of the change and even intensify an
issue.
According to Coch and French (1949), “because individual and group behaviour in an
organization are largely determined by a group norms (fundamental to the organization’s
culture), the changing of certain of these norms and their accompanying values that are
integral to culture needs to be a major focus on an organization change effort” (As cited by
Burke, 2002, p.52).
45
Besides, employees‟ resistance to change is often linked with the uncertain and
ambiguous future which characterizes the change (Burke, 2002). Indeed, the more employees
are installed in deeply rooted routine and habits, the less reactive they will be to continuous
improvement. They will not feel new management methods as a plus but as a threat for their
existing system. Quoting Deal and Kennedy (1982), Elrod II and Tippett (2002) wrote: “the
significant barriers are raised whenever change is not recognized as loss, as the death of the
old” (p. 273). Actually, people who do not recognize the loss shall be condemned to stay in
the “denial state”: this is what occurs in the majority of the models of change. The process of
change must pay a great attention to make employees understand, feel and accept the change.
According to Kegan (n.d.), this employees‟ involvement in the process would give them a
more global point of view, necessary to make them apprehend the change as a natural
progression rather than a rupture. In that way only, people may begin to accept change, “if
not, actually welcome it.” (As cited in Elrod II and Tippett, 2002, p. 273).
This idea of a global view will help employees to see the company as a common
workplace rather than compartmentalized in several self-interest. Moreover, De Wit and
Meyer (2004) state that “the stronger the organizational culture is, the more efficient in terms
of performance it is”. In another hand, if the strength of the organizational structure can
increase the resistance to change. For instance, taking the eventuality that a company, pushed
by situational factors, need to change radically its organization, the efforts for change may be
weakened by a too strong culture. “Therefore, in short, organizational culture is a double-
edged sword. People can also become immune or reluctant to change” (Franziska Fritz &
Philippe Massart - 2007).
The difficulties of implementing change can be strengthened if people have common
(and usually wrong) assumptions about the market and the way to adopt change: change
mentalities when the whole group agree upon the same can turn out to be hard.
Managers must reshape this organizational belief in order to relieve the resistance to
change. Nadler states that “for effective change to occur, and in particular cultural change,
there is no substitute for the active engagement of the CEO and executive team. Top leaders
must assume the role of chief architect of the change process” (Kavanagh and Ashkanasy,
2006, p. 83).
The authors ranked the leaders‟ actions and influences as a top priority.
Nevertheless, as we underlined above, managers must take into consideration employees‟
involvement in the change process (participative management) in order to smooth the change.
46
As stated by Cartwright and Cooper (1993), “one of the most common difficulties stems from
what might be called “cultural differences” (As cicted in Kavanagh and Ashkanasy, 2006,
p.83).
But, to be able to modify the corporate structure, managers first need to understand
and to keep in mind the ways things are organized so far. The intrinsic quality of the social
system (involving people, work and systems in general) is to be resistant to change: it seems
designed to nullify the impacts of change implementation. But the complexity of
organizational cultures increases the difficulties of change implementation. Weiek and Quinn,
(n.d.) maintain “that every cultural system will cover continuous, incremental changes
punctuated on occasion by more episodic, radical change”. Finally, Sathe and Davison (n.d.)
agreed that “culture change consists of changing people’s minds as well as their behaviour.”
(Kavanagh and Ashkanasy, 2006, p.84)
To sum-up, we have seen so far that the more people agree on common
assumptions, the harder the change implementation. Besides, an organizational culture is
complex and changing; this increase the difficulties of understanding this culture in order to
build the change process upon. Another step in the difficulty is made when talking about
international mergers or acquisitions. Cartwright and Cooper (1993) have suggested that “the
degree of constraint placed on individuals when a change from one culture type to another is
in progress, will depend on the types of cultures being merged.” (Kavanagh and Ashkanasy,
2006, p.84). The authors linked this approach with the four cultures types, namely: power;
role; task; achievement; person/support. Huge efforts in cultures adaptations would need to be
made if managers have to blend different kinds of organizations, one more “role culture
oriented” with one more “person/support oriented” for instance.
47
Figure 10 - The Relationship between Culture Types and Individual Consequences - Kavanagh, Marie H. &
Ashkanasy, Neal M., The Impact of Leadership and Change Management Strategy on Organizational Culture and
Individual Acceptance of Change during a Merger, 2007
It is important to bear in mind that change implementation there is always a winner
and a loser. Often, the strength of the winner during changes due to the fact that he has
nothing to lose and so therefore everything to gain. The personality of the winner is
characterized by a strong motivation and a creative spirit. While the loser is conservative
people, he wants to keep his gains. The loser is not risk taker, he is conservative and is the
first to show resistant to change. To cope with this situation there are two types of solutions,
negotiation or give and take agreement.
Other authors discovered why some companies resisted change. According to
Metzger (1981), for any proposed change or development project, the organization is facing
resistance. The employees of a company want to feel safe, what this translates into a desire for
stability, and thus does not change. Lewin (1951) identified three methods to reduce and
overcome resistance to change, increase the Knowledge of staff, have the ability to put
themselves in the shoes of others (empathy) and employee engagement in the process of
change.
4.3.2. Resistant of Management Change and Transition
According to the Harvard Business School (2003), the company should not wait for
a crisis to decide the change. However, the example Ford, "Change-or-die", has shown that
organization could emerge stronger from a crisis situation. In addition, this article highlights
48
the importance of the change leader, “as he can raise concern regarding a current,
problematic situation, and urge management to challenge the complacency without resorting
to “crisis mode” tactics” (Franziska Fritz & Philippe Massart - 2007). Beer (2002) has
defined a number of tools in order to ease the change and challenge the complacency
approaches:
1. Leverage information from the competition watch in order to make employees
aware of current and future problems.
2. Communicate and proceed participatory management with employees in order to
know their problems and concerns.
3. Make a discussion around the data with the shareholders in order to create an
overall understanding of the corporate problems.
4. Setting high goals and encourage employees to achieve them
The Harvard Business review (2003) highlighted that people resist to the change
because they feel as losers in the change. When the resistance to change is characterized by an
unwillingness to achieve the objectives or to follow the process outlined, resistance is called
passive resistance. Resistance is called active when the resistance is direct or subversive. The
same article also defines a method for manage resistance to change by identifying the
plausible resistant to change. Here‟s a sample of this method:
o Answer the question: “Where and how will change create pain or loss in the
organization?”
o Detect which are the people who have something to lose and try to anticipate
their reactions.
o To put across to the resistant the necessity to change by communicating with
them. Establish a situation of emergency and explain the necessity of breaking
with the status quo.
o Demonstrate and emphasize the benefits of change to the resistant. Example: job
security, wage increases…
o It is important to find a place, a role in the change implementation for resisters.
Their involvement in the change process is important to mitigate resistance to
change.
49
o Change is perceived as a loss of control by employees, which is why they
oppose the changes. In this context, the role of the leader will be to make
resistant active players in the implementation of change.
If these attempts prove to be failures, the resistance should be transferred to another
department where their skills can be utilized.
In summary, this research aims to identify and understand resistance to change and
the reasons motivating them to resist.
Other authors have developed theories and tools useful in defining the strategy for
change or during the change implementation:
1. Change management, manage evolutionary and revolutionary change - figure 11
Figure 11 - Corporate transformations as a countercurrent process - Source: Krüger (1994); (as cited in De Wit and
Mayer, 2004)
Top-down management is characterized by a weak influence of the employees of the
organisation. The corporate strategy is defined by the enterprise management which imposes
well established way of acting. The functioning of the organisation is directed by a system
of strict regulations and the developments of the enterprise are exclusively going from "top to
bottom".
Bottom-up management is characterized by a strong influence of the employees of the
organisation. This type of organisation aims to involve the employees into the enterprise
50
development: their role is to be the driving force within the organisation development. The
salaried have a definite autonomy which allows to solve by themselves the difficulties they
come across. The organisation functioning is defined by a system of little restrictive
regulations appearing under the form of general instructions. The developments within an
enterprise go from "bottom to top ".
Business reengineering is one of the most well-known kinds of top-down
management; its aim is to entirely reconsider the strategy or the processes of the organisation.
The realization of these tasks requires the help of somebody with strong capacities in order, as
well to implement a change as to encourage that change with the salaried.
The most famous among bottom-up managements is the "Kaisen" (small improvements)
Kaisen is a Japanese word meaning: improvement. The concept is based on a constant
development of the processes of production and engineering, arising as well at the level of
business processes as at the level of the enterprise management. The "Kaisen" is an approach
that could be so defined: nothing is good enough that deserves to be kept.
Both these two concepts have their advantages and their drawbacks. That is why,
nowadays, the concepts of top-down and bottom-up are associated. The top-down
management is used when there is an in-depth change (Strategic Developments) even when
continuous evolutions are developed by the bottom-up management. A constant dialogue
should then be entertained by each part in order to guarantee a steady evolution of the
enterprise.
2. De Wit and Meyer (2004) argued that the stronger corporate culture, the more
effective it is, and it is more difficult for changing, as described in figure 2.7.
Corporate
culture is: Up to date Not up to date
Strong „Accelerator‟ „Fossilisation‟
Weak „Mild Breeze‟ „Flat Tyre‟
Figure 12 - Corporate culture and effectiveness in change implmentation - De Wit & Meyer 2004
51
“The imaginary sum of values shared by all company members, their mind-sets and
behavioural patterns form the central elements of corporate culture” De Wit & Meyer (2004)
According to De Wit and Meyer, values and belief participate to the construction of
the genetic code of the organization and in the same time to the structure of the industry, the
nature of the competitive advantages and the corporate strategy. When the environment
changes, a strong culture of the enterprise can incite to struggle against or anticipate the
change. A strong organization culture accepts that if there is a possibility of change, the
organization might be in a position of "fossilisation " or "flat tyre". This concept would
explain that some enterprises formerly successful are now in decline because the change
within the organization is received as dramatic (De Wit &Meyer).
4.4. Change implementation process and keys success factors
4.4.1. Implement change, the Lewin's three -Step model.
In 1951, Kurt Lewin developed the Three-Step Model. This researcher in social
science developed the concept of Forcefield Analysis based on the observation that the "status
quo" is the result of driving forces and resisting forces. (Michael A. Beitler PhD - Strategic
Organizational Change-2003)
Figure 13 - Lewin's Forcefield Analysis
Driving forces favour the change for they push and motivate it, when resisting forces
are an impediment to that change by driving the salaried towards an opposite direction.
52
In this context, Lewin developed the Three-step Model in the aim of analysing these forces as
to unbalance the scales towards the wanted direction: the change.
The Three-Step Model takes place in three stages:
Figure 14 - Lewin's Three Step Model - Adaptation from the author
The present situation shows a state of equilibrium. It becomes necessary to unfreeze
the current situation (status quo) to overcome the resistances to change (Robbins
S.OrganizationalBehaviour-2002-Prentice hall; 10edition) to unfreeze the situation three
methods can be used:
- Increase the driving forces.
- Decrease the restraining forces which negatively affect the equilibrium.
- Find equilibrium between the two above mentioned methods.
The second stage of this theory aiming to change the behaviours is the moving phase.
To move the organisation or the unit to change behaviour requires a planned intervention.
This will be a time of insecurity and fear for many organizational members (Michael A.
Beitler, 2003). Three actions can be led to favourite the moving step (Kristonis A. –
Comparison of change theories – International journal of scholarity academic intellectual
diversity – Volume 8 N°1 – 2004-2005):
- Make the salaried understand that the status quo is not beneficent to them and
encourage them to analyse the problem with a new perspective.
- Work all together to find new perspectives.
- Connect the perspective of the team with the leader's view in favour of change.
53
In the third step, Lewin said: we must "refreeze "the situation. It is imperative that this
stage should be operated once the change has been implemented so that this stage is kept in
position during that period; if not, the members of the organisation will return to their former
and confortable habits (Michael A .Beitler2003). One of the actions that might be settled to
freeze the situation will be to reinforce the new concept through the use of formal and
informal rules (Robbins S.-2002).
This Lewin's concept shows off the influence of the forces favourable or unfavourable
to change. Therefore, the change will be implemented when the joint driving forces are more
important than the resisting forces.
4.4.2. Keys success factor in change implementation
The Kurt Lewin's model of change previously brought in indicates the different stages
of implementation. In order to implement the change, the leader will have the possibility to
influence its success through the development and the use of keys success factor. “Each key
allows to realize a function (put the change into effect, mobilize the employees, manage the
emotional aspects, etc...) and that is necessary for the success of the change” (Grouard B .&
Meston F.-1995- The enterprise on the move , be successful while implementing a change -
(Dunod-2nd edition)
John Kotter (1996) has defined "The Eight-State Process of Creating Major change" in
his book "Leading change". This method doubled with "The ten keys of change" by Benoit
Grouard and Francis Meston(1995) permits to obtain a more complete approach of the keys
factors when implementing a change. It is defined in 15 points:
Please, refer to the next page
54
Key 1 Establishing a sense of urgency
- Examining the market and competitive realities
- Identifying and discussing crises, potential crisis, major opportunities
Key 2 Creating the guiding coalition
- Putting together a group with enough power to lead the change
- Getting the group to work together like team
Key 3 Canalize
- Define the structure of the project
- Associated functioning method able to sustain, make easier and speed up the change.
Key 4 Developing a vision and a strategy
- Creating a vision to help direct the change effort
- Developing strategies for achieve that vision
Key 5 Communicating the change vision
- Using possible vehicles to constantly communicate the new vision and strategies
- Having the guiding coalition role model the behaviour expected of employees
Key 6 Mobilize
- Create a dynamics of change near the employees
- Ratify the stakes defined in the vision (project)
- Define the main axes of improvement.
Key 7 Organize the participation
- Make sure of all concerned employees‟ participation, not only to enrich their vision but
also to make its "concretisation" easier.
Key 8 Empowering broad-based action
- Getting rid of obstacles
- Changing systems or structures that undermine the change vision
- Encouraging risk tacking and non-traditional ideas, activities, and action
Key 9 Put into effect - Implement the change
- Realize the vision of project in a daily operational reality
- Change the structures, the ways of doing, the attitudes, the culture.
Key 10 Train and coach
- Bring a training as technical as relational to help the employees to participate, in the best
conditions, to the implementation, and furthermore, make them live the vision day after
day.
Key 11 Generate short term wins
- Planning for visible improvements in performance, or “win”
55
- Creating those win
- Visibility recognizing and rewarding people who made the wins possible
Key 12 Manage the emotional aspects
- Get rid of resistances and "freezing" entailed by the change in order to permit its
concretisation (realization)
Key 13 Manage the stakes of power
- Redirect the relations of power to guarantee their coherence with the vision
- Make it participate efficiently to the process of change.
Key 14 Consolidating gains and producing more change
- Using increase credibility to change all systems, structures, and policies that don‟t fit
together and don‟t fit the transformational vision
- Hiring, promoting, and developing people who can implement the change
- Reinvigorating the process with new projects, themes, and change agents
Key 15 Anchoring new approaches in the culture
- Creating better performance through customer - and productivity – oriented behaviour,
more and better leadership, and more effective management
- Articulating the connections between new behaviours and organizational success
- Developing means to ensure leadership development and succession
Figure 15 - Keys success factors in change management - Adapted from the author
4.5. Human factor Management a leader's key success factor in the
process of change.
My school training and my professional experiences have led me to understand that
with regard to his stage of development and his abilities, each person could not have the same
attitudes, the same needs, and the same expectations. In a management context, the role of the
leader within the organization is therefore to analyse and know the needs and expectations of
the persons forming his teams. This knowledge of the others will then allow the manager to
adapt his management style with regard to his interlocutors. The objective being to implement
a climate of confidence adapted to each personality. “Within the today fluctuating context,
it is obviously necessary for the senior executive and the team to develop confidence within
the organization, to remove all brakes preventing everyone from concentrating on the
objectives to be reached." (Paul DAMASCENO – CadredeSanté.com –
http://www.cadredesante.com/spip/spip.php?article351). According to A .DAHMANI in his
book "Confidence and Management of Human Resources”, the confidence would arise as an
56
"invisible social lubricant" and that confirms the P. DAMASCENO'S approach. Confidence
allows to limit the resistances to change, for, if the subordinates of a manager do not trust
him, all attempt to change will bring up to the emergence of an opposition to change. The
manager will be confronted to people who will not only refuse the project, but also will not
even make the effort to understand the stakes of change. Consequently, confidence is a crucial
variable for a manager who wants to assert his leadership within the team.
4.5.1. Identify the stages of competence development.
As previously stated, the needs and expectations of the employees are different
according to their stage of abilities development. Of course, it would be tiresome, indeed
impossible for a manager to define a level of abilities development for each person. There are
some simple tools which allow to classify the stage of the development of ability. Paul
Hersey, Kenneth H. Blanchard and E. Johanson (Management Organizational Behaviour:
Leading Human Resources) have defined four stages of the competence development toward
which it should be good to adopt a specific style of management with regard to the situation.
This approach is called :"situational leadership ".
57
Stages of competence development
D3 : When motivation and competence increase
= D2 becomes D3 when able to utter suggestions.
Indicators: new dynamism, nascent interest.
Needs:
- Ability to speak up one's worries and to be
understood.
- Ability to listen and to carry out one's ideas.
- Congratulations and acknowledgement of
one's high level of competence.
- Encouragement and help to develop one's
abilities.
- Opportunity to work with others and share
common objectives.
D2 : High motivation, weak competence
= new post, new activity, new tool, new organization.
Indicators: Smile, goodwill, voluntary wish,
availability.
Needs:
- Precise objectives
- Instructions and orders of action
- Delays, duration and priorities.
- Frequent feed-back on hit results
- Precise definition of the limits of
responsibility
- Acknowledgement of one's enthusiasm.
D4 : High motivations and competences.
= Senior executive or responsibility job.
Indicators: is able to train new ones without state of
soul, to convey his knowledges, to be well
established in his responsibilities.
Needs:
- Diversity and challenges.
- Acknowledgement of his contributions.
- Autonomy and responsibilities.
- Training of people.
D1 : Weak motivation, medium competences
= doubts, uncertainty, questioning, "breathlessness"
Indicators: negative expression, rattle, overloaded
breath
Needs:
- Clear reminder of the objectives and stakes.
- Explanations of the meaning of tasks to
realize.
- Reinsurance when mistake.
- Encouragement and congratulations when
improvements.
- Participation to the process of decision and
the solving of problem.
Figure 16 - Stage of Competence development - Hersey & Blanchard
D1: High motivation and low confidence.
This stage sticks to the period of an arrival in a new enterprise or a new service. No matter the
level of qualification, we here deal with a phase of discovery which demands a close
management in order to inculcate its own enterprise culture, its objectives, its priorities...
58
D2: Weak Motivation and medium competences.
It's a complex stage to manage. The associate begins to understand the enterprise functioning,
improves his autonomy, but has not got yet the competences to allow him to impose himself.
He begins to doubt, develops a critical attitude and shows an anti- establishment inclination.
He attempts to be "proactive" but quickly reaches his limits.
D3: Motivation and competence increase.
The associate shows more independence and autonomy. He begins to integrate the
organization expectations and the objectives of his function. He is competitive and does not
require any longer to be strongly managed.
D4: High motivation and competence.
The collaborator has become a senior manager within the activity or the post, he is
autonomous, experienced and efficient. He no longer needs to be motivated, he does it
himself.
According to Hersey and Blanchard the style of management must adapt itself to the level of
motivation and competence of the collaborator.
4.5.2. Identify the styles of management.
“Management is the art of getting things done through and with people in formally organized
groups, the art of creating an environment in such an organized group where people can
perform as individuals and yet cooperate toward attainment of group goals, the art of
removing blocks to such performance, the art of optimizing efficiency in effectively reaching
goals”. (Koontz – Cited in Contextual Management, a global perspective – R. S. BASI)
This definition shows that management is an art, an art to create an environment
adapted to each person in order to guarantee their personal success and make them adhere to
and reach common objectives. In other words, the leader manager must make sure of
everyone's blossoming so that they may stand as driving forces within the organization.
59
Besides the analysis of the stage of development of the competence previously studied,
Hersey P and Blanchard K.H. have defined four kinds of management.
STYLES OF MANAGEMENT
Figure 17 - Styles of Management - Hersey & Blanchard
S1: To Manage
Directive Management is meant to structure the tasks in a precise way, and to assure a regular
control of the accomplished work. The manager is little encouraging, he adopts a very
directive behaviour and precisely defines each task to reach a given objective.
S2: To Train
The training management is always very directive, because the collaborator is still
inexperienced. After a while, the manager becomes more and more encouraging. The manager
keeps much nearer relationships with his associate; he takes time to communicate with him
and explain his decisions. He never hesitates as to consult him and takes his advice into
account. This type of management requires some kind of vigilance: it may be too explanatory
or asking for a high personal investment. The manager may sometime adopt a paternalistic
attitude in this kind of circumstance.
60
S3: To Support
The management of supporting type is characterized by a very encouraging and little directive
behaviour. The collaborator has the abilities, proves to be autonomous and generates
propositions. In partnership with the manager the collaborator takes full participation in the
process of decision. Concerning this kind of management one must be attentive and vigilant in
order to avoid mixing conviviality and familiarity. Furthermore, in this kind of situation, the
manager may be inclined to adopt an attitude of manipulation.
S4: To Delegate
This kind of management is characterized by a weak encouragement and a weak support. The
collaborator is entirely autonomous. He is little assisted and needs no longer to be supervised.
The collaborator has the required abilities to achieve the missions he has been entrusted with.
When this kind of management is practiced, "to delegate "does not mean laxity, and it is
therefore convenient to be vigilant to remain available and to reaffirm one's support so that
the associate will not feel abandoned .
4.5.3. What kind of management, and for what kind of associate?
The final touch to the theory of Hersey & Al's situational leadership has therefore been
to associate a kind of specific management with regard to the stage of the ability development
of the fellow workers of the organization .It was done in the aim of creating a favourable
environment for each person in order to guarantee their personal and collective blossoming
within the organization.
Please refer to the next page
61
Management Style & Stage of competences development
Figure 18 - Hersey & Blanchard - Situational leadership
As the stage of ability development is not fixed, this chart synthesizes the kind of
management to adopt by the manager in relation with his associates abilities. An appropriate
management based on the needs and the expectations of the collaborators is one of the ways
to counter ill-being at work. It is primordial to counter this ill-being because any person who
does not feel at ease constitutes a potential brake as the changes intervene within the
organization. The leader manager must bring his support and an appropriate follow-up and
also be sure that nobody should feel either too isolated, mothered or controlled, that nobody
should feel ignored compared to the competences of his associates. This represents a daily
attention which will allow the leader manager to establish a climate of confidence between
him and his fellow-workers. Therefore, through this confidence he will favour the flexibility
of his associates within a period of change.
62
Chapter 5 : Empirical study
The objective of this empirical part is to contrast the theoretical approach of change
management with the field work of change implementation. To enable a better understanding
of the field approach, four case studies will be detailed in this chapter, and the study of each
case will take place following the same method, the same plan, for each case. I have chosen
this method with the objective to provide equal criterias in order to permit comparisons
between each case. The usefulness of this choice is reinforced by the fact that, some of these
case study are revealed to be successful whereas others failures. Moreover, it allows the lector
to analyse section by section, and identify clearly the sources of success and the reasons of
failures for each case study.
5.1. Case Study one: Yacht Brokerage Insurance Agency
5.1.2. Presentation of the case study
The building trade of insurance brokerage agency is to find the best insurance at the
lower price for their clients. To reach this objective, the insurance brokerage company
develops agreements with national or international insurance companies to allow him to sell
insurance products. In facts, an insurance brokerage agency is an intermediary between his
clients and insurance companies and represents his clients.
Within a desire of confidentiality, the insurance yacht brokerage agency will be called
“Alpha”.
Customers
Alpha
Insurance
Companies
Figure 19 - Insurance brokerage agency work process
63
Process to create and insurance contract:
1- A prospect sends to Alpha an insurance quotation request by our website or by phone
2- Alpha, turns to insurance companies to realise quotations and suggest the cheapest one
to his prospect.
3- If the prospect agrees with the proposition, he sends back the quotation duly signed
and dated with the payment of the insurance.
4- Alpha receives the document and sends it to the right insurance company, who will
establish the final contract before sending to Alpha who will send it to the client.
5- In case of sinister, the client declares the sinister to Alpha who will inform the
insurance company. The insurance company manages all the sinister resolving
process.
Alpha has been bought out by the actual owners (a couple of insurers) in 2008. At this
time, because all the management of the firm was made without management software and
with a poor marketing investment, the actual owner reorganized the major part of the
management and developed the major marketing tools of the firm.
The implement of a management software package was necessary for two reasons. The first
one was to facilitate the operational operations (new contract creation, contract renewal,
accountancy, sinister management…) and the second one, to ensure the credibility of the firm
regarding insurance companies.
The particularity of this firm is to have a mandate with one insurance company. Only
three companies in France enjoy this type of special agreement with this insurance company.
This mandate allows the firm to manage by itself all the process of contract creation, contract
renewal, sinister management, and sinister payment without the help of the insurance
company. Comparing with the usual work process previously described, this represents a
major competitive advantage for our firm. All is managed in our office, and all the
information‟s are kept by us. It allows us a major reactivity, the customer‟s satisfaction and
the reduction of intermediates.
Of course, to benefit from this special agreement, Alpha has to complete special rules,
transmit reporting and funds every month. In this context, implement a software package was
fundamental to facilitate the complex insurance company‟s requirements. Alpha has to be
64
completely transparent vis a vis the insurance company which can send, at any time, an
auditor to control the management of our firm.
The software package intervened as a tool to answer the necessity of simplifying the
operational processes and guaranteeing a perfect following of the company functioning.
In July 2009 I integrated this firm as an apprentice. When I arrived, the owner of the firm
asked me to evaluate and facilitate the using of the software package. Like an internal junior
consultant, I started my investigations by asking and working with users of the software
package. This led me to understand the using and the complex functioning of the software.
The results of this investigation revealed several trouble spots.
- The first observation was that the software is complex to understand and requires
preliminary skills to be used. Most of the actions on the software depend on the human
capacity to use it and the software presents a lack of barriers to prevent errors.
- The second observation was that nobody in our firm had a complete knowledge and
good use of the software. Every week, users of this software have to call the helpline
of the software supplier to solve problems they have create by the lack of required
skills to use this software properly. These types of problems occurred in production
department as in accountancy department.
- The third observation. In this management software, like in others, users have the
possibility to generate request to have access to information kept in the software data
base. This type of request allow users to exploit accountancy information, make
production reporting, clients or prospect segmentation, emailing… and even more.
The huge number of existing requests, with similar titles have created confusion:
which one should they use ? Additionally, similar requests were giving different
results, this creates a major interrogation, are they reliable ? But the major problem of
some of these requests was their reliability. A list of requests was used to create the
insurance company‟s reporting. We discovered two years after the software package
implementation that, reporting‟s figures were false, and consequently, the funds sent
to the insurance company were also false.
- The fourth observation shows that the software helpline people and the Alpha‟s
employees were not speaking the same language. Alpha‟s employees had strong
65
difficulties to make helpline people understand their requests, and vice versa when
helpline people wanted to explain solutions of our problems.
- The last observation shows that, because of the previous identified problems, tensions
were palpable between Alpha‟s employees. In general, when problems are identified
in the production department, the production manager attempts to solve problems
directly with the software helpline. When problems are identified by accountancy
department, the accountancy manager, who owns the firm with her husband, instead of
trying to find solutions together to solve problems, or make a clear request to the
software supplier, starts to create conflict before searching to solve them.
If I had to describe the personalities of my colleagues, I should have to speak about the
owners of the firm and the production manager.
Denis, one of the owners, is the main motor of the firm. He is a real developer and is
always going ahead, but without regarding if people are following him and have a good
understanding of what he is expecting. Likewise, because of frequently directive changes,
employees don‟t have a clear vision and mission. In addition, some internal troubles make
that people don‟t trust him. He is not working on full time in Alpha, most of this work time is
dedicated to another own company.
The accountant manager, the second owner, shows paranoid rigidity. She disapproves
changes because of ancient experiences. She doesn‟t reappraise the reasons of her
dissatisfaction vis à vis of previous change. If she comes across a problem, she concentrates
on it rather than attempt to find a solution. Furthermore, she is a conflict generator in the firm.
The production manager has some doubts, incertitude, questioning and show some
breathlessness. She needs a clear objectives reminder and definition of the stakes. It‟s
important to explain to her the meaning of the tasks she has to realize. She needs to be
reassured. Regarding change, she is neither a break, nor a motor for change. She accepts the
change if she understands the goal of change. In France, based on experience, most of
changes are perceived as unfavourable by employees.
66
Afterward, my role in this company has therefore been to improve the use of the
software package, to develop its capacities and to manage the correction of errors existing
since the integration of the software package. According to that, I learnt to use the software
with the help of the helpline. As my fellow workers and my managers did not understand the
language of the developer, I decided to act as a translator between my company and the
software provider.
Concerning the use of the software package, I did my utmost to create a great number
of tutorial programs with the help of the hotline, by meticulously listing each stage to apply
for the various actions. Once they were realized, I put them at everyone's disposal through a
shared server .With the feedback of each one, these tutorials have improved up to be
understood by everybody .We can still make mistakes but the risk of errors has been lowered.
These tutorial programs have consequently showed much interest not only for today users but
also for the training of newcomers.
As to the developments to bring up to the software program, I had to understand and
evaluate the needs of each part. To reach that target, I had to concentrate on the way to
approach each personality of the company.
DENIS, the manager of the company, knowing that he was little available, I compelled
him to spare some time with me to understand his expectations in order to define the
specifications for each subject he would like to be realize . I have drawn up these
specifications myself so that they could be understood by the developers of the software
package.
With the accountant manager who owns the company at equal parts with DENIS, I
have examined the problems she was confronted to and I made her duly understand that
several days of work were not a loss of time as far as we would find appropriate solutions.
These few days or intense work for each problem might then allow an improvement and
simplification of daily tasks.
With the production manager I developed a confident relationship in order to show her
that I was not there to control her but to help her. Therefore this gave me the opportunity to
67
implement changes of functional level. The realization of my tutorial programs has allowed
her to reduce the amount of errors of daily input. Furthermore, as we were entertaining a
relationship of confidence, it allowed me to set up tools of follow-up, asked or not by the
management, and at the same time showing her that it could be done not only for the company
interest but also for her own interest.
We have developed, together, tools which up to now were non-existent, and which is
more, of which they cannot do without nowadays. Little by little, after having solved
important subjects with each one and achieve precise specifications, I turned to software
package developers in order that they should create or correct the applications we were in
need of.
Experience teaches! As I had noticed before, that the requests and the developments
needed when the software package was integrated, did not correspond to the initial requires
for each solutions brought by the furnisher of the software package, I forced myself to check
each result. To control each solution was for me not only a requirement but also a token of
reliability.
Nowadays it is still necessary to carry out some small adjustments but we work on
a sound basis! Most of the difficulties we came across were due to a lack of control of the
tools created when the software package was set up, and also at a lack of knowledge of the
first users.
5.1.2. Type and origin of change
In this company, the aim of the change was reengineering software. It appears as an
organizational revolution in the management process for the firm. For the employees, the
impact of this change was nil because Alpha was just bought out and there were only new
employees that came to the firm.
The firm was working without management software; consequently it was an easy task
for managers to complete the first step of reengineering Hammer‟s theory: “recognise and
breaking away from the outdated rules and fundamental assumption”. Regarding the second
and the third steps “The reengineering team must ask Why ? and What ?” and “Reengineering
68
efforts strives for dramatic levels of improvement”, because employees was new, managers
don‟t had to face to revolve employees behaviour.
This change have been decided by the initiative of the managers in order to facilitate
the days to days management and ensure their firm credibility regarding insurance companies,
and with the objective of developing new agreements. This motivation for change is
considered as Endogenous change force, this is a response, or anticipation, related with the
life cycle of the firm.
According to the Larry E. Greiner‟s theory (1972), Alpha was characterized as a firm
in the creativity phase, while Alpha set up for more than 20 years… In this context, the Robert
E. Quinn & Kim Cameron Cameron approach (Organisation Life Cycles and Shifting Criteria
of Effectiveness: Somme Preliminary Evidence – 1983) is more appropriated and Alpha is
considered in an entrepreneurial stage.
5.1.3. Strategy and process of change
5.1.3.1 Strategy
The strategy adopted by this manager was a Top-down strategy. Because of none hold
employees, the managers could not integrate employees in the process of defines the software
requirements. So, they have chosen a software package provider, and then implement the
software in their enterprise.
5.1.3.2. Process
The ordered software was composed of a common base to which it is possible to add a
large number of applications based on the requirements and needs of buyers. To ensure that
the application requests correspond to the requirements of the Agency, the business owners
have been created a list of their requirement with all of their needs.
Thinking that the use of the software was easy to learn, just one people of the firm had the
opportunity to have a trainee about the software, the accountant manager, which is one of the
owners of the firm. These trainees have been during two days.
69
The owners of the firm decided that the production manager will learn about the use of the
software by using it and calling the helpline centre in case of doubt, or problem solving.
5.1.4. Rigidities management strategy
Because of the specifically context (New company for the owners and new
employees), the implement of change was really simply. The software was installed, and
people started to work with.
At the choice of the change and the implement of the change, the owners of this business
therefore did not have to manage potential resistant to change. Which either allows a
considerable time gain and turns out be a real asset.
5.1.5. Conclusion
In this case study, the conduct of change took place without difficulty. However, the
emergence of complication occurred within months, years that followed.
Indeed, from the outset, in everyday use, it was necessary to consult very frequently (several
times a week) the helpline to support the lack of skills of users to ensure a normal use of the
software. Moreover, it was also necessary to call the helpline to correct some application.
The consequences of this change:
- Loss of time
- Frequent problems
- Tension in the enterprise
- Tensions between Alpha and the software provider
- Incorrect information
- Questioning the competence of the supplier of software
- Reliability of the company affected by insurance companies
It is difficult more than three years after this change to say what could have been the
solutions to be applied at that time in order to don‟t have to suffer the complications
encountered since then. However, it is possible to determine the factors that will have to allow
70
for the downgraded. Indeed, the application of certain key success factors presented in section
4.4.2. “Keys success factors in change implementation of my research could allow to
anticipate these problems, notably the key number 10, "Train and Coach" from b. Grouard &
f. Meston (1995). If users of the software had all received full training to learn how to use it,
the daily work of users would surely not been so penalized.
Furthermore, once a new application is created or integrated in the business, it seems
necessary and indispensable to control all the details of this application. This control could
then have allow to avoid the mistakes of reporting and therefore funds errors.
My intervention in this enterprise as apprentices and my ability to communicate with my
business managers, and developers of the software allowed me to manager these problem
resolutions. We're now not protected from human error and fear the emergence of new
problems.
One of the solutions envisaged by the motor of the development of this company, Denis (non-
user of the software), will be to change the software. Its strategy, do it lonely…
5.2. Case Study two: French Company
5.2.1. Presentation of the case study
Meeting with Mr A. R. , Operational Manager in a French Company.
This firm is specialized in the manufacture of effervescent granulated powders sold as
such in bags or under the shape of tablets.
If the work instrument of production of this enterprise is rather complex, the different
circuits of information‟s flows is on the whole rather simple. The main need concerning the
follow-up of information and the total traceability are imperative in what concerns this sector
of activity, and of course this applies for each batch of manufacture.
When the shareholder of this company has offered to improve the information system
management of the firm, Mr R. has right away understood the possibility to change of IT. The
objective being to move from archaic systems, to a modern one allowing then a simplification
of the tasks and productivity improvements.
71
The role of Mr R. when leading this project has then been to build and manage it
entirely. Right from the beginning, A. R. has included the key elements of the team by giving
them the sense of their responsibility and appropriates the project for themselves. Three
persons were concerned: the production manager, the quality manager and the commercial
assistant. Mr R. asked them to organize altogether a meeting where they should think over
what they would like to change and what they might wish to be settled. "Their reaction was
instantaneous! A true envy, a real sense of responsibilities, and a genuine desire to be part
and parcel in this project and make it their own."
As and when the first report of this meeting was established, the team possessed a
tangible basis for working. As the team was working on its own, Mr R. played the role of
decision-maker; he would then choose according to the suggestions formulated by the team in
charge of the project. To realize this project, an informatics team joined the initial project
team and perfectly integrate itself in its frame of mind.
The project was built together with the achievement of synthesis documents which were each
time more sophisticated in order to determine exactly the needs of the enterprise and build an
optimum solution. The settlement of this new system of information was quickly established,
without any revolution nor nerve crisis, and the wished results were reached.
"I think that the success of our project rests above all on the spirit of mind that motivates us,
that is to say: a real team. Everybody must play his role, feels at ease at his post and much
concerned by the change."
The delegation and the sense of responsibility of each one have proved to be essential
in the implementing change process and of course they are due to the capabilities of the
manager leader. In all organization, all project management you need a leader who will be
able to induce his team with him and take the decisions which will involve the organization.
5.2.2. Type and origin of change
For this firm, the change of IT was a real organizational revolution. The goal of this
change was to make possible the replacement of different IT with a single solution systems.
The requirements for this new IT was to consolidate all features necessary for the proper
functioning of the business and ensuring the traceability from orders to the end product. This
type of change is characterized of discontinuous change.
72
The characteristics of the discontinuous renewal perspective are revolution over
evolution, disruptive innovation, creative destruction, radical pace of change, sudden break of
the status quo, a stable and unstable possible of states and a punctuated equilibrium (De Wit
and Meyer, 2004, p.182). According to P. Daudi (2011), revolutionary change makes a clear
break, has clear fracture with the past and its usual ways of thinking and doing.
The motivation for change emerges from the shareholder. The old informational technologies
were working well, but were complex. So this change emerged from inside the firm, it was an
endogenous change force who wanted to improve the IT.
5.2.3. Strategy and process of change
5.2.3.1. Strategy
The strategy adopted by the firm‟s shareholder was to mix top-down management and
down-up management. The shareholder perceived the need to improve the business
information systems to simplify and facilitate the process of management of the firm. In this
context, employees were directly impacted. To that aim, the shareholder has therefore decided
the change (top-down management) and directly integrated the employees of the firm (Down-
up management).
5.2.3.2. Process
According to the Lewin‟s theories, the shareholder in the first step of change unfreeze the
current situation by increasing the driving forces, offering development possibilities and
adopting a participative management.
For the second step, the Moving phase, employees understood quickly their interest in
changing IT systems. They had the opportunity to make the most of this situation. From the
beginning of the project, the shareholder used one of the levers presented by Lewin: “Work
all together to find new perspectives”.
Once the change has been implemented successfully by the employees and the help of an
informatics team, the Lewin‟s third step was simple to implement. “Refreezing the new
situation” was in fact, refreeze employees‟ job.
73
5.2.4. Rigidities management strategy
To prevent rigidities to change, the shareholder of the firm used some of the keys
success factors presented in this research (4.4.2. Keys success in change implementation):
Key 2: Creating the guiding coalition
- Putting together a group with enough power to lead the change
- Getting the group to work together like team
Key 3: Canalize
- Define the structure of the project
Key 6: Mobilize
- Create a dynamics of change near the employees
- Ratify the stakes defined in the vision (project)
- Define the main axes of improvement.
Key 7: Organize the participation
- Make sure of all concerned employees‟ participation, not only to enrich their
vision but also to make its "concretisation" easier.
Key 13: Manage the stakes of power
- Redirect the relations of power to guarantee their coherence with the vision
- Make it participate efficiently to the process of change.
Furthermore, we can establish a relation with the shareholder‟s behaviour and Hersey
&Al. theory of situational leadership. Indeed, the shareholder adopted a delegating
management with A. R. He doesn‟t really encourage and support him, giving him the
opportunity to show he had the ability to lead a project by himself and prove he could be
considered a senior executive. This demonstrates the confidence of the shareholder to A. R. ,
and it surely played an important role in this project. A. R. felt that a mission whose outcome
depend directly from his leadership abilities.
74
5.2.5. Conclusion
The success of this change was made possible by an appropriate management. The
shareholder first decided change, convinced of the merits of this approach. The goal of this
change of IT had three main implications:
- A single database for the company, and therefore increase the visibility and
transparency of company managers and shareholder of this company.
- Simplify the daily tasks of employees. This allowed, once the change has been
completed, to free up some time for employees and enable them to focus on other
tasks.
- Free time, why? What goal? Think about new developments.
Implicitly, the shareholder has made what is called a change of culture of the
organization. Thus, the shareholder has activated the eighth lever described by John Kotter in
"The Eight - State Process of Creating Major Change":
Anchoring new approaches in the culture:
- Creating better performance through customer - and productivity – oriented behaviour,
more and better leadership, and more effective management
- Articulating the connections between new behaviours and organizational success
Developing means to ensure leadership development and succession
Conclusion: This is an example of leadership !
5.3. Case Study three: Spanish subsidiary
5.3.1. Presentation of the case study
Conversation with Mr G.L.J General Manager within a French Multinational.
This subsidiary is a firm which produces and commercializes two kinds of magnesia:
75
- Caustic magnesia for animal feeding, fertilizers and varied industrial uses such as
pulps or flames retarding panels.
- Fireproof Magnesia for iron and steel industry.
This firm extracts its raw materials from its own mine then transforms them according
to complex industrial processes before the commercialization of fully or semi-finished
products. Therefore this firm is depending on the natural resources of this mine.
In 2007, a study of the soils meant to evaluate the capacity in raw material of the mine
revealed that at the rhythm of the actual working, the lifespan of the enterprise would be of 9
years.
Within a few weeks an enormous organization was set up under the direction of MR
G.L.J.
“The first thought was a strategic one.” What must we do? Close the site at end
term? Envisage a strategic alliance? Sell our "know-how"? Could we find some more ores
near at hand? All hypotheses were then studied, analyzed and fully examined in total
impartiality.”
Considering the different strategic aspects (place of the leaders on the European
market, cutting in the Chinese exportations, etc...) and the project of research meant on the
possibility to open other mines having been well conducted and proved to be possible, it
was finally the strategy adopted by the company. A team was then formed to have the project
stepped forward.
“On the whole, open-mindedness demands a considerable human energy.” The group
of study was composed for the greatest part, of engineers and members of the financial and
legal direction had to be organized in a very rigorous way in order to respect the time allowed,
the procedures, as well as other regulations and environmental constraints. To realize this
project, the role of G.L.J. has consisted in making the members of the team face their own
responsibility, control the smooth running of the process on its whole, bring his support to the
team and most obviously take the decisions based on the formulated suggestions.
The analyze of the ores of the new work site proved a superior quality when
compared to the one from the first mine .The very important prospects of need of magnesia in
Europe as well as the industrial incapability in answering to this increasing demand (the
reasons being : the limited capability of production, the age of the active equipment and other
76
manufacture networks),all that made the managers conscious that their thought had not to be
only limited to the supplying of raw material. The productive equipment had to be optimized.
Therefore, the direction had to answer that question:" What must we do
to ensure the permanence of our enterprise but above all its global development? "
“From that moment, my role was to launch various strategic thoughts by summoning up all
the resources of the firm and make them responsible masters of their destiny ". These
different reflections have been meant to determine what the products will be, for which
markets and in which quantities.
"Concerning my teams, these two last years have been absolutely exceptional .We made up a
true enterprise project that proved to be as federative as exiting ".
The first project team which had been organized for mining subjects, was followed by
two others: one to study the commercial side and the possible axes of development and the
second having to concentrate on industrial sets of problems: think out the tomorrow plant...
"It was inconceivable that these three teams should work independently". Starting from that,
Mr G.L.J. has aimed to make these three teams work together .To make these
teams understand that they had a common objective has proved to be the key factor in this
implementing change process.
From Mr G.L.J 's point of view ,the key factors which have allowed the success of this project
are as follows :
- The ability to make teams face their responsibility by appropriating the subjects.
- To have known to give time, to compel to respect the time allowed together with
results, respecting of course the constraints of each one.
- To have succeeding in letting skills and ideas be expressed, by pushing the teams to
have confidence in themselves, be imaginative and rich in propositions.
- To have known to reassure the teams not only as to the future and the potential of their
enterprise but also as to the role they were now playing and that they will be playing in
the future.
Coming back to this last key factor, the objective to make each team to be confident in
itself was to make them project onto future and to allow these persons to feel their works were
in danger and thus fearless recruit the real necessary skills that the enterprise needed. As to
77
the recruitment, three very heavy potential key jobs were created: one mines engineer, an
industrial project manager and a purchase manager.
Two new commercial directions of zone were created to accelerate the commercial
development: South America and Pacific Asia .Besides, it was also the opportunity to set a
new organization for the commercialization of caustic magnesias on a worldly scale.
It, was quite something to find solutions for their enterprise, but it was something harder to
convince and "succeed in selling the project" to their shareholders. Although the shareholders
of this enterprise have the soul of enterprising developers, they nevertheless
remain financiers. All the same, to invest 40 million euros in two years require some
explanations, guarantees of profitabilities and returns on investment.
5.3.2. Type and origin of change
In this enterprise, change has emerged as a necessity. This type of change is regarded
as a discontinuous change but do not generate the different characteristics developed by De
Wit & Meyer (2004): evolution over revolution, disruptive innovation, creative destruction,
radical pace of change, sudden break of the status quo has stable and unstable alternation of
states and a punctuated equilibrium. And appears more like an evolution than a revolution.
Indeed, the search for new mines in order first is a discontinuous change, the company
worked on a mine which began to be exploited in 1945. However, despite the fact that the
change is discontinuous, it is characterized by evolution over revolution. Indeed, such changes
occur as continuity in the life cycle of the firm.
This change occurs in a context where the company suffers from an alteration of those
resources in raw materials. It must therefore respond to its environment. The origin of this
change is due to an exogenous force of the company.
5.3.3. Strategy and process of change
5.3.3.1. Strategy
The strategy adopted by the shareholders was to mix top-down management and
down-up management.
78
In the present case, the role of top-down management was evaluating "life expectancy
of the mine" to anticipate the future. The results of this study have allowed the shareholder to
realize their future.
The down-up management. G.L.J. , General Manager in the French Multinational
decided to integrate the managers of the Spanish subsidiary in the project of change. Their
mission: build the project, find new sites of exploitation, build an action plan, an investment
plan and create a business plan in order to propose and convince the shareholders.
5.3.3.2. Process
According to the Lewin‟s theories, the shareholders in the first step of change unfreeze
the current situation by increasing the driving forces. To increase the driving forces, G.L.J.
decided to play it straight: At the actual rhythm, in 9 years, in there is no solution, the
enterprise should have to close.
For the second step, the Moving phase, employees understood quickly their interest to find
solution. If there are no new mines, they should have to dismiss the 200 employees of the firm
and find another job. They were master of their future and had the opportunity to make the
most of this situation. From the beginning of the project, G.L.J. used one of the levers
presented by Lewin: “Work all together to find new perspectives”.
The project has been build and all the requirements were complete (find new sites of
exploitation, action plan, investment plan, business plan). An investment plan of 40 million
euros in two was presented, and compare with the business plan perspectives, the shareholders
accepted to finance the change. Once the change has been implemented successfully by the
participation of managers of the firm and the new employees (Mines engineer, industrial
project manager and a Purchase manager), the Lewin‟s third step has not been problematic,
“Refreezing the new situation” was refreeze the project made by the employees of the firm.
5.3.4. Rigidities management strategy
To manage and anticipate rigidities, G.L.J. expressed his strategy and the keys success
factors he used to decrease the resistant forces of the Lewin‟s theory, but unconsciously he
used another key success factor previously presented in the theoretical framework:
79
Key 1: Establishing a sense of urgency (Kotter – 1996)
By playing it straight, establish the sense of urgency, and this factor acted as a driving
force.
5.3.5. Conclusion
The difference between failure and success in implementing change in an organization
depends highly on the people themselves (Ph DAUDI).
The success of this change was made possible by an appropriate management and strategy.
G.L.J. empowered the manager of the firm by giving them the opportunity to save their
enterprise. The keys success factor previously presented in the case study by G.L.J. and the
last one describe above had played a major role in the project of change and during the change
implementation.
This case study highlights the role of the leadership in change management and the
importance of the people within the firm.
80
5.4. Case study four: French Multinational
5.4.1. Presentation of the case study
Conversation with C. Ramon, Information System Manager in the Groupe Roullier.
This French multinational has a turnover of 2 milliards euros, employs more than 6000
persons among which more than 50% work abroad in more than 60 countries.
C. Ramon been working in this firm for roughly 20 years and started as a data
processing manager.
During this interview, C. Ramon explained me one of his worst experience in change
process during his career in this firm. Few years ago, CEOs of the multinational had decided
to change its French IT, and therefore to shift from systems often mostly developed at home
to an ERP system. The stake was a thumping great one.
To deal with this situation the firm recruited a project director specially well-trained
for this kind of change, and made sure to be assisted by a consultant agency, as well for the
analyze their needs as for helping the company to manage the change for the chosen ERP.
Several software programs have then been studied; together with a great number of
days of consultancy entirely aimed to what should be the best choice.
The software program was selected...
And the project was launched ... and totally stopped after two long years during which
the company went from failures to failures and also after having spent nearly 2 million
euros...
“What were the reasons ? They were at the same time simple and complex, human and
technical”.
After a few years the company has to admit that it all appears more obvious...
At first, concerning the technical side ,the home software packages had been
developed and freely adapted by each line of work, sometimes leading to enormous deviations
in the systems of informations between the two companies.
Each one wanted to keep its own specificities, refusing then to focus on the same
standard even when it was imposed by the ERP and not the other way round...even being
aware that some likely adaptations were unavoidable...
81
But the main reason of this failure was a human reason. To have willed to impose choices by
people from outside the firm has been an important mistake.
The home teams have never appropriated the project. They basically lived through it as an
imposed event and their resistance to change has been almost automatic.
The management felt itself rejected, even for instance in what concerned the financial
management .The administrative and financial managers who had almost not been integrated
in the primary brainstorming sessions, have right away alerted and informed of the risk ...
“Today it is obvious that we ought to have integrated them to the project of change.
They could have acted as levers but instead, bit by bit, they changed into brakes.”
People entirely disagreed with the project manager who found himself gradually isolated, then
withdrew into himself and his convictions rather than playing his role of leader.
“To draw a conclusion: in change management, one should never underestimate the role of
the leader who should be carefully selected and make sure that he will know how to give
others the deep desire to participate , to totally handle things in order to make the project
become a success.”
5.4.2. Type and origin of change
For this French multinational, the change of IT was an organizational revolution. The
goal of this change was to make possible the replacement of different IT with a single solution
systems. The principal difficulty of this change was to develop an IT able to manage various
enterprise having different business trade. This type of change is characterized of
discontinuous change.
As it was describe in the previous case study, he characteristics of the discontinuous
renewal perspective are revolution over evolution, disruptive innovation, creative destruction,
radical pace of change, sudden break of the status quo, a stable and unstable possible of states
and a punctuated equilibrium (De Wit and Meyer, 2004, p.182). According to P. Daudi
(2011), revolutionary change makes a clear break, has clear fracture with the past and its usual
ways of thinking and doing.
The motivation for change emerges from CEOs of the multinational. The old
informational technologies were working well, but this structure enables the holding to have
easily access to the whole information. So because this change emerged from inside the firm,
it was an endogenous change force who wanted to improve the IT.
82
5.4.3. Strategy and process of change
5.4.3.1. Strategy
In this case, it clearly appear that the strategy adopt by the CEO was a top-down
management. The CEO decided to employ a project manager and a consultant agency in order
to develop the future IT. This change was impacting all the French enterprises of the
multinational group, and consequently all the employees.
5.4.3.2. Process
According to the Lewin‟s theories, this firm never over pass the first step of change:
unfreezing the current situation. At no time the project manager of the firm attempt to
increase the driving forces to find the equilibrium between driving and resistant forces, on the
contrary, his change strategy has the result of increase the resistant forces.
5.4.4. Rigidities management strategy
As I said previously, the project manager has to face to strong rigidities. And most
surprising was the instance in which he tried to force change. As a result, rigidities increased
and employees have refused to make any concessions.
5.4.5. Conclusion
As I did not take part by myself in this change project, I would like only to make
comments according to the information which had been transmitted to me.
From my point of view, to impose change in all of the French firms of the multinational,
without considering or engaging nor manager, no users of the using IT at this time, has
directly had a negative impact on the realization of the project.
In this context, person not wished to consider the interest of change. And therefore, nobody
made the effort to try to consider the possibility of making concessions to reach a solution.
The persons concerned by the change is only seen that they imposed their a revolution of the
IT and their uses.
83
The impact for the multinational has been an investment of EUR 2 million who finally proved
to be a deadweight loss for the multinational, since the project was abandoned.
I will end this case study with a citation of Albert Einstein: "A person who has never
committed error has never, innovated”.
84
Chapter 6 : Conclusion
In this final section, I will present emerging findings of my case study and the
concepts discussed in my research and that seem to me crucial in the conduct of change. My
case study focusing on to SMEs or national implementations, these recommendations will
find more interesting in the context of management of proximity than in an international
context.
The change management is not an easy task. The research that I've developed thanks
to both a theoretical and empirical framework showed that the great difficulty of change
management was due to human behaviour. "Human behaviour" is a relatively broad term, in
this approach the goal is to demonstrate the importance of behaviour, both at the level of the
managers and of leading people through change.
Of course, the four case study analysed in this Master Thesis will not allow me to
make any conclusions or theories that can be generalized. However, I hope that my comments
will find a useful in any way.
Manage the change requires special skills, and is today one of the most complicated
tasks for leaders.
My theoretical research as well as the different case study examined allowed me to
highlight the role of the leader in the conduct of change. Two case study showed that top-
down management found its limits as a mix between top-down and down-up management
boosters on evidence-based optimizations. The success of implement change is thus directly
dependent of the leaders of the company, or persons having the capacity to decide the change
and its application. Whether the change is one thing, have the ability to implement it is
another.
According to my approach, one of the main strengths of the leader is its ability to
create a favourable environment for the personal development of employees of the company
(ref: Situational leadership - 4.5. Human factor Management, a leader‟s key success factor in
the process of change). The aim being to create a climate of trust mutual between the leader
and staff of the firm. Confidence is an "invisible social lubricant". This means that the trust is
a real asset. The simplest example that illustrated this idea is friendship. With a close friend, a
trust is created. We are listening to his advice, and giving him our support in case of need.
Create a climate of confidence is a daily work and often takes time. Once this objective is
achieved, it is necessary to cultivate it because confidence is fragile. In an environment or
85
employees do not trust to the manager, he will face to important brakes when he decides the
change. In this context, the trust is a factor promoting the flexibility of a business, and
therefore its ability to change.
Another factor highlighted in the case study presented in this Master Thesis is the
importance of participative management. Empowering employees, and make them master of
their destiny is a technique proven in the cases presented. For any strategic changes, it is
essential that the manager leader framework the change and define objectives. However, in
order to make the employees following the change, it is important to integrate them in the
solutions research. In this approach, the quality of leadership depends implicitly to his ability
to lead employees to make by themselves the solutions expected by the leader.
The last point that seems to me essential is a phase of control. The bad experience
encountered during my apprentice will have taught me one main thing in the implementation
of change, especially when working with external suppliers: control the functioning of the
desired application delivery. This observation may seem to be evident, however the presented
case shows that this was not always the case.
86
Literature Review
Alexandre-Bailly F. & D. Bourgeois & J-P. Gruère & N. Raulet-Croset & C. Roland-
Levy, 2009, « Comportements Humains et management » 3rd
edition, Pearson Education,
ISBN 9782744073977
Atlas du Management – http://www.atlasdumanagement.com/index.php?article=34&zone=2
Beer, M. and N. Nohria, 2000, “Cracking the code of change”. Harvard Business Review
Beitler Michael A., 2003, “Strategic organizational change: a practitioner‟s guide for
managers en consultants” ; Practitioner Press International ; ISBN 0972606408
Burke, W. W. (2002). “Organization change: Theory and practice”. Thousand Oaks
Cartwright, Sue & Cooper, Cary L. , 1993, “The psychological impact of merger and
acquisition on the individual: a study of building society managers” , Human Relation.
Chemers Martin M. , 1997, “An Integrative Theory of Leadership”; Lawrence Erlbaum
Assoc Inc ; ISBN 9780805826791
Christensen CM, Marx M. & Stevenson H.H., October 2006, “The Tools of cooperation of
change” ; Harvard Business Review
Coch, L., and French, J. R. P., 1948. “Overcoming resistance to change”. Human Relations.
A .DAHMANI - "Confidence and Management of Human Resources”
Daudi Philippe & Lundgren Makael, 2009, “Leadership in Different Arenas – Leading for
the future” ; Verlag Dr. Müller ; ISBN 9783639166163
87
Paul DAMASCENO – CadredeSanté.com - www.cadredesante.com/spip/spip.php?article351
De Wit B. & R. Mayer, 2004, “Strategy: Process, Content, Context--An International
Perspective” , South-Western College Pub; 3rd
edition
Eisenbach R., Waston K. & Pillai R., 1999, “Transformational Leadership in the context of
Organizational Change”; Journal Of Organizational Change Management; Vol. 12
Elrod, P. David II & Donald D. Tippett. , July 2002, “The “Death valley” of change” ;
Journal of Organizational Change Management.
Hatch, M.J. & Schultz, M.S. , 2004, “Organizational Identity: A Reader” ; Oxford
University Press
Hersey, P. and Blanchard, K. H. , 1977, “The Management of Organizational Behavior” 3e,
Upper Saddle River N. J.: Prentice Hall.
INSEE - http://www.insee.fr/fr/methodes/default.asp?page=definitions/inflation.htm
Greiner Larry E. & Virginia E. Schein, 1988, “Power and Organization Development:
Mobilizing Power to Implement Change”; FT Press; ISBN 0201121859
Greiner Larry E., 1972, “Evolution and Revolution as Organizations Grow” ; Harvard
Business Review ; Vol. 50(4)
Grouard B .& Meston F. – 1995 – “The enterprise on the move, be successful while
implementing a change” - (Dunod-2nd edition)
Hammer M., July-August, 1990, “Reengineering Work: Don‟t Automate, Obliterate,”
Harvard Business Review.
88
Hersey Paul, Blanchard Kenneth H., Johnson Dewey E., “Management of Organizational
Behavior: Leading Human Resources”, Prentice Hall; 8th edition (October 3, 2000) ISBN
978-0130175984
Kavanagh Marie H. & Neal M. Ashkanasy, Feb 2006, “The Impact of Leadership and
Change Management Strategy on Organizational Culture and Individual Acceptance of
Change during a Merger” ; British Journal of Management.
Kaynak E. & R. S Basi, 2010, “Contextual Management: A global Perspective” ; Routlege ;
1 edition; ISBN: 0789004194
Kerber, K.W. & Buono, A.F. 2005, “Rethinking organizational change: Reframing the
challenge of change management”, Organization Development Journal.
Kotter J., March-April 1995 & 1998, "Leading Change: Why Transformation Efforts Fail"
by. Harvard Business Review.
Kristonis A. – “Comparison of change theories” – International journal of scholarity
academic intellectual diversity – Volume 8 N°1 – 2004-2005
Lawler III Edward E. & Christopher G. Worley, January 2006, “Reward Systems,
Motivation and Organizational Change”, Center for Effective Organizations.
Lewin K. , 1951, “ Field theory in social science”. D. Cartwright, Ed.
McNamara C. “Basic Context for Organizational Change” ;
(http://managementhelp.org/mgmnt/orgchnge.htm
Metzger P. , 1981, “Managing a programming project” ; Prentice Hall Inc
Nikkilä J. , 1994, “The environment of the administrative work. Towards a productive and
attendant administration” (Hallintotyön ympäristö. Kohti tuloksellista ja palvelevaa hallintoa).
Valtionhallinnon kehittämiskeskus. Helsinki: VAPK -kustannus.
89
Porter, M.E. – “How Competitive Forces Shape Strategy”, Harvard business Review,
March/April 1979
Pullen A. and Linstead, 2005, “Organization and Identity” ; London: Routledge. ISBN
0415322316
Quinn Robert E. & Quinn Cameron, 1983, “Organizational Life Cycles and Shifting of
Criteria of Effectiveness: Some Preliminary Evidence” ; Management Science ; Vol. 29, No.
1, pp. 33-51
Robbins S. – 2002 – “Organizational Behaviour” - Prentice hall; 10edition
Robbins Stephen P. &David A. De Cenzo, 2005, “Fundamentals Of Management”, Prentice
Hall ; ISBN 9780131972957
Ropo A. , 1989, “Leadership and Organizational Change” ; Acta Universitatis Tamperensis
Ser. A ; vol. 280 ; ISBN 9514425472
Service Public.fr – Administration Française - http://vosdroits.service-public.fr/F800.xhtml
Shein, 2009 – “The corporate culture survival guide” – Revised edition. Jossey-Bass, USA
Stewart J. , 1991, “Managing change through training and development”, Kogan Page, ISBN
0749404272
Tushman M. & Romanelli E. , 1985, “Organizational Evolution: A metamorphosis model
of convergence and reorientation In L.L. Cummings and B. M. Straw (EDS)” ; Research in
organizational behaviour.
Linnæus UniversitySE-391 82 Kalmar/SE-351 95 VäxjöTelefon 0772-28 80 00
Linnaeus University – a firm focus on quality and competence
On 1 January 2010 Växjö University and the University of Kalmar merged to form Linnaeus University. This newuniversity is the product of a will to improve the quality, enhance the appeal and boost the development potential ofteaching and research, at the same time as it plays a prominent role in working closely together with local society.Linnaeus University offers an attractive knowledge environment characterised by high quality and a competitiveportfolio of skills.
Linnaeus University is a modern, international university with the emphasis on the desire for knowledge, creativethinking and practical innovations. For us, the focus is on proximity to our students, but also on the world around usand the future ahead.