Change Management:Some preliminary key factorsto succeed in leading peopleAuthors: Pierre LE JEAN                         ...
Acknowledgment        First of all, i would like to thank two persons who especially helped me, withoutwhom the realizatio...
Table of ContentChapter 1 : Introduction ....................................................................................
Chapter 4 : Theoretical Framework ...........................................................................................
5.2.4. Rigidities management strategy ................................................................................ 73 ...
List of figuresFigure 1 - The Agreement Matrix ..............................................................................
Chapter 1 : Introduction       1.1.Context of the research       Whatever the kind of organization, public, private or ass...
been. Consequently, the numerous researches that have been conducted, the books, thearticles and magazines devoted to the ...
The proliferation of advice leads to a certain confusion when implementing the changeprocess and the means used to favour ...
restructure and adopt new technologies ,a higher co-operation ,total quality managementprograms, re-engenering ,mergers… (...
changes in organizations affect the kinds of jobs that managers have to do amid the shiftingnature of their lives and care...
Chapter 2 : Purpose of the research       Firstly I will set out the main questions to which I will try to answer througho...
Once all those questions will be given an appropriate answer, it will then be easier to outlineand define the roles of the...
Chapter 3 : Methodology       3.1. Justification and motivation“Methodology is a mode of thinking, but it is also a mode o...
3.2. Research approach               3.2.1. Empirical research strategy        The objective of my research is to understa...
3.2.3. Scientific approach« The systematic accumulation of knowledge is essential to progress in any profession…however, t...
3.4. Data collection               3.4.1. Primary data                      3.4.1.1. Case Study        The study, which is...
a manager, and to confront them to the needs, the expectations and the preoccupations of hisemployees.        The chapter ...
The interest of it all will then be to underline where the theory and the reality meet.First Interview:        Interview w...
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 projec...
Chapter 4 : Theoretical Framework       4.1. Understand the Change within Organizational and business       Systems       ...
these firms, a clear distinction has to be made between organizations which conducts theirown business, handle and manage ...
About management system, it is interesting to compare the modern westernmanagement models and other models of existing man...
dimensions. The first dimension is “the extent to which people agree on what they want: theresults they seek from their pa...
The replacement approach is to recruit a new leader from within the organization.But in reality, the new leader are coming...
However, if the concept is easy to understand, the reality is far from simple. Thecompany who has devoted significant inve...
offering. In order to create a competitive advantage, an “alignment must be achieved          between all three elements o...
This move enabled the company to make a step toward a competitive environment whileasserting their competitiveness, and re...
1. Evolution and Revolution Dealing with the paradox are presented in figure 2                                        Evol...
3. Convergence and Upheaval is presented by Tushman and Romanelli (1985) stated scope of                                  ...
The organization cannot then be simply managed by the means of an informalcommunication, it has to be structured. The foun...
can also observe that stock-options and company-wide profit sharing are settled in order toendeavour a spirit of organizat...
Figure 5 - Larry E. GREINER – “Evolution and Revolution as Organisational Grow” - 1972        Robert E. Quinn and Kim Came...
-      Lyden : Functional Problems (1975)    -      Katz & Kahn : Organizational Structure (1978)    -      Adizes : Major...
Figure 7 - Organization Life Cycle - Adaptation from Bertrand Venard - Audencia Scool of Management    B. Exogenous change...
great number of providers thus giving them a greater power of negotiation)The    customers power of negotiation is strong ...
In the same time, obstacles to the way out are also present and must be evaluated when    wishing to enter a market. It ma...
Figure 8 – Five Forces Michael E. Porter -Sharon Larsen - February 18th, 2009       This organization chart describes perf...
developed, either as a service associated to the sale of a product or as the market of theservices itself. Keeping in mind...
4- The financial markets, banks, private investments.   The rate of money acts directly on the corporate organization stra...
The level of investment on a market or on a precise geographic area is also a factor to   be taken into consideration. If ...
9- The population age, its social & moral values, the level of education, the influence of   belief, the ethics of work, t...
International Context Environment                                                             10-                         ...
4.3. Change and rigidities to change“Im not interested in preserving the status quo; I want to overthrow it.” NiccoloMachi...
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
Pierre Le Jean   Master Thesis
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Title: Change Management, Some Preliminary Key Factors to Succeed in Leading People

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  1. 1. Change Management:Some preliminary key factorsto succeed in leading peopleAuthors: Pierre LE JEAN Tutor: Pr. Dr. Philippe DAUDI Subject: Business Administration Leadership and management Level and semester: Masters thesis, Spring 2 in International Context
  2. 2. Acknowledgment First of all, i would like to thank two persons who especially helped me, withoutwhom the realization of the Master Thesis wouldn‟t have been possible, Philippe DAUDI andPierre 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 myResearch, he gave me the motivation and a considerable energy. He offered me theopportunity 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 andavailability. Furthermore, they believed in me. I wish to thank all my family members for havingsupported me and encouraged since the beginning of this adventure. Their presence offeredme the daily energy required until the end of the Thesis. I would like to give a particularrecognition to my father. His professional experience, skills and his advices have been aprecious help. My dear friends also deserve to be well rewarded. We have always been used to seeeach other often and they have perfectly understood my frequent unavailability along thisyear. 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! 2
  3. 3. Table of ContentChapter 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 ................................................ 11Chapter 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 ............................................................................................................. 13Chapter 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 3
  4. 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 Lewins three -Step model. ................................................. 51 4.4.2. Keys success factor in change implementation ........................................................ 53 4.5. Human factor Management a leaders 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? ................................... 60Chapter 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 4
  5. 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 .................................................................................................................. 82Chapter 6 : Conclusion............................................................................................................... 84Literature Review ....................................................................................................................... 86 5
  6. 6. List of figuresFigure 1 - The Agreement Matrix ................................................................................................ 25Figure 2 - Evolution and Revolution Dealing with the Paradox ................................................ 29Figure 3 - Reengineering Work - Hammer ................................................................................. 29Figure 4 - Scope of Frame-Braking Change - Tushman and Romanelli ................................... 30Figure 5 - Evolution and Revolution as Organisational Grow ................................................... 33Figure 6 - Organizational Life Cycles and Shifting Criteria of Effectiveness .......................... 34Figure 7 - Organization Life Cycle .............................................................................................. 35Figure 8 – Five Forces Michael E. Porter .................................................................................... 38Figure 9 - The Relationship between Culture Types and Individual Consequences ................ 47Figure 10 - Corporate transformations as a countercurrent process - Krüger ........................... 49Figure 11 - Corporate culture and effectiveness in change implementation ............................. 50Figure 12 - Lewins Forcefield Analysis...................................................................................... 51Figure 13 - Lewins Three Step Model ........................................................................................ 52Figure 14 - Keys success factors in change management .......................................................... 55Figure 15 - Stage of Competence development - Hersey & Blanchard .................................... 57Figure 16 - Styles of Management - Hersey & Blanchard ......................................................... 59Figure 17 - Situational leadership - Hersey & Blanchard .......................................................... 61 6
  7. 7. Chapter 1 : Introduction 1.1.Context of the research Whatever the kind of organization, public, private or associative, it is impossiblenowadays to rest with ones achievements. The phenomenon of globalization generates anenlarged competition which impacts on all sectors of activity and compels all types oforganizations to evolve and change much more quickly than in the past. The change is a statethat is part of the life of an organization and it incessantly becomes more difficult (Linsteadand Pullen 2009). The expression "Organizational Change" historically refers to the alterations that mayoccur in an organization. These transformations can be of structural, technological or strategicorders .This concept of organizational change equally includes today the taking into accountof cultural values and cultural attitudes. The simple word "change" in all kinds of organizationdeliberate or unexpected, internal or external, implies the taking into account of a greatnumber of variables whatever they may be financial, structural, cultural or behavioural. Thechange has a direct influence on the conditions of work, the structure of the organization, theroles and the behaviour of the organization. Within a constantly evolutionary economic environment, the ability of an organizationto develop, to change, is compulsory, and it involves its viability for a more or less longperiod. In order to survive, an organization must be able to change and adopt a flexible anddynamic attitude to implement this change. In a highly competitive middle, the organizationsneed to go ahead and control the change by being performing leaders. Considering that thecomplexity of change management, a great deal of organizations have wonder on howmanage 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 thebeginning whatever the technological, political, legal economic or social level might have 7
  8. 8. been. Consequently, the numerous researches that have been conducted, the books, thearticles 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 lowerthan the demand of goods and services. This was giving the guarantee of a certainstability that the majority of nowadays enterprises can no longer profit by as they are forced toreact 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 ofsuccess are not the same as in the past. The actual stake of an organization, more precisely ofan enterprise, is to react and adjust itself to the evolutions of the environment. Besides, theorganization must continuously search for new opportunities of development, of economies ofscale with the aim to further its profits and growth. These solutions intervene not, only toanswer to the pressures of the competition or of the technological steps, but also to anticipatethe change (Kerber and Buono, 2005). An organization that succeeds in implementing changeprocess will favoured its chances to generate profits. That is why to succeed in implementinga change process has become crucial. Although numerous researches have been led concerning the implementing changeprocess and how to successfully establish a change, these theories are not often applied orpartially applied by the organizations. Nowadays, a great number of projects of implementingchange process have still proved to be a failure. Several studies have proved that 70 per centof 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 offailure in what concerns the accomplishment of the implementing of change and confirm therelative complexity of its realization. However, the different studies concerning the changeimplementation have also been criticised because they didnt have an appropriate approach.Actually, they have been blamed for not taking into account the profitability, the costs, and tohave ignored the complexity of implementing the change in an organization(MacDonald,1998-Kotter,1998-Abraham,2000). These observations have led to a recentfurther development of researches on this subject. 8
  9. 9. The proliferation of advice leads to a certain confusion when implementing the changeprocess and the means used to favour its implementing show to be heavy and importantwhatever the human and economic level are concerned (Beer& Norhia-"cracking the code ofchange",2002 ). Another reason why implementing change process failed would be caused bya lack of leadership. The change may be generated not only by a steady evolving environmentbut 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 atall organization level, let it be individual or organizational. Thus, the change within anorganization 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 areseveral 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 leadershipcould be defined as the capacity to reach high but nonetheless feasible objectives, having inthe same time the will and the ability to supervise and manage a person or a group of personsin 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 . « Forexample, when one talks about leading a meeting, the meaning of leadership is portrayedfrom the chairperson or somebody who facilitates it. With respect to leading a tour, a closerconsideration is given to the tour guide. However, leading a market may employ a leader in avery real sense as the top player, unlike the two previous examples. This shows that leadersshould 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 allowhim to differentiate himself from the other actors of the economic world. The leader musthave a "high added value". The changes in the actual economic environment never cease to increase .The more anorganisation is able to change the more it is liable to grow in a rather important way (EdwardE. Lawler III & Christopher G. Worley, « Reward Systems, Motivation and OrganizationalChange », January 2006) .The changes in the organisation may aim to resettle its mission, to 9
  10. 10. restructure and adopt new technologies ,a higher co-operation ,total quality managementprograms, re-engenering ,mergers… (http://managementhelp.org/mgmnt/orgchnge.htm). Inthis kind of situations, the role of the leader will consist in creating a structure able to answerand adapt itself to change .The concept of transformational leadership is highly regarded asbeing one of the best exemplary style of leadership. Eisenbach et. Al. (1999) has shownthrough descriptive researches that the transformational leaders were those who adopted theprocesses of change. In 1989, Ropo states that transformational activities are required mainlyto change things in the organization. Furthermore, transformational leadership aims atreaching 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 debatedthrough the role of leaders in moving the image and the culture of their organizations. In thecontext of a fast changing world and increasing pressures from the environment, a solid butflexible organizational identity is an important factor for the success of an organization.Maintaining an effective organizational identity is becoming one of the major challengesleaders have to face. “Opinions and impressions, feelings and fantasies, hopes andexpectations expressed by employees, suppliers, customers, shareholders, governments, andtheir regulatory agents as well as community members, the general public, the media, andpolitical activists, whether positive or negative, all contribute to defining the identity of anorganization...”(Hatch and Schultz, 2004, p.1). Additionally, media is playing an importantrole and indicates differences between corporate images and organizational actions. Throughnew technologies, such as just-in-time inventory, other stakeholders are more closely involvedin the organization. This creates stronger dependencies between the organization and thosestakeholders. These two aspects lead to a higher openness to external parts of theorganization and its identity (Hatch and Schultz, 2004). Furthermore, Dutton and Dukerich(2004) indicate that organizational identity is related to personal motivation. According tomany studies, identity is one aspect which is related to the successful outcome of anorganization. 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 requiredof managers. However, change is reciprocal: changes that managers make to theirorganizations can also affect the nature of managerial work Stewart (1991) describes how 10
  11. 11. changes in organizations affect the kinds of jobs that managers have to do amid the shiftingnature of their lives and careers. These include: Wider networking, flatter hierarchies ofauthority, reduced middle management cohorts with more responsible roles, less predictablecareer 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 isrelated to human behaviour, it is a research field arising from the sociological andpsychological domains. Thus, it requires leaders to have specific skills concerning socialrelationships in order to understand and to deal with actions and reactions of people. In thatsense, Chemers (1997) referred to Hour and Shamir (1993), who found transformationalleaders transform “the values, preferences, and aspirations of followers from self-interest tocollective interests” (p.89). As the organizational identity is based, influenced andtransformed by members of the organization, it would be interesting to investigate this in acontext of leadership and show how a leader can influence it. To adopt a transformationalleadership style is indicated to be important and successful in situations of change; it istherefore interesting to study how the different characteristics of transformational leadershipcan influence, adapt or transform an organizational identity. Moreover, severalrecommendations for leaders are available on the way to implement change effectively inorganizations. Therefore, this study concentrates on gathering the key concepts of change andfocusing on the fundamental role of leadership and transformational leadership during theprocess of change. 11
  12. 12. Chapter 2 : Purpose of the research Firstly I will set out the main questions to which I will try to answer throughout myresearch 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 myresearch , 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: Whatare the roles of the leader within an implementing change process? What is the place held bythe human factor within the implementing of change?After I have defined a few basic elements of the implementation of change, I will underlinethe role of the leader in this implementation together with his influence to successfullymanage a project. Afterwards, I will underline the role of the human factor whenimplementing 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 whenimplementing a change process demands some beforehand acquired knowledges of thesubject consequently, the following questions will be answered in order to allow a completeunderstanding 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? 12
  13. 13. Once all those questions will be given an appropriate answer, it will then be easier to outlineand define the roles of the leader in this implementation process, notably in what concerns therole of the human factor and the ability to manage it in order to optimize the implementationchange success . 2.3. Research objective As I have mentioned previously, my thesis aims to allow a global understanding of theinterest for a change within an organization, but also and above all, of the different variablesand factors which will have to be controlled by the leader to reach a change that will reveal tobe a success. We also accept a failure which on no account will prove to be a bad experienceas 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 thedifferent key elements which will be detailed in my theoretical framework. Myprofessional experiences have allowed me to participate to the implementation of changewithin 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 analyseand to notice that one of the main sources of failures or brakes to the progress of our projectswere due to the behaviour of some people taking part in the project. Afterwards my researcheshave taught me that the problems encountered through my experiences were not isolatedcases. My main objective when realizing this thesis will therefore be to give prominence tothe role of the manager leader in the managing of his teams, his ability to create a favourableenvironment for work in order to allow a group cohesion and also reach the objectives theorganization aspires to. 13
  14. 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 ofconcepts, which try to describe the steps and relations needed in the process of creating andsearching for new knowledge” Igeman Arbnor & Björn Bjerke The objective of this chapter is to enumerate the choices which are going to direct theapproach of my research together with the specificities that are determining the interest of thisresearch. The aim of this part will also be to explain the method used to allow a totalunderstanding of the intrinsic characteristics linked to this very matter. This chapter will thenoffer the opportunity to express my choices in the gathering of data by putting the stress onadvantages and disadvantages which will impact my research. For a year and a half, my first professional experience has led me to participate to thegrowth and implement change in a company; I then could confront the theoretical approachesI 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 ofthe senior manager of a small enterprise (10employees) by setting myself between the seniormanager and the employees of this enterprise. I directed and realized these changes as an autodidact, and I have been deeplysurprised, dumbfounded and at the same time interested by the observation of obviousdysfunctions. The various documentary researches undertook afterwards have allowed me toisolate one of the main causes of failure when you manage a change, and that is the humanfactor .This very human factor is, for the greatest part, the cause of the difficulties I metthrough 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 theoutstanding importance of the human factor in implementing change process. 14
  15. 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 intoconsideration the human factor in the implementing change process. I then build my researchthrough the help of tangible cases associated with the sharing of knowledge ofprofessionals who have been used to managing this implementing change process linked tohuman factor. These people will have necessarily participated to the whole realization ofchange project implementation or at least to its application. It is with this perspective in mind that the empirical part of my research will be basedon two axles. The first one will be the analysis of a case study of establishing a change basedon my own enterprise experience. The second will result from the realization of interviewswith managers who are or have been confronted to implement change in their professionallife. 3.2.2. Interpretive framework« Interpretive research methods are based on an assumption of subjective human experienceas 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 andanalyse all experiences gathered through a qualitative investigation.As I previously explained, the realization of my thesis will be based on the use of acase founded on my own experience in enterprise. In this context, I will be brought to expressthe wishes, positions, and actions of my superiors and also of my subordinates. This precisephase will lead me to develop the interpretation of the expectations and behaviours of peopleworking in my immediate vicinity. Which is more, the choice I made to interview managers to obtain a betterunderstanding of their own role within the process of implementing change. The way I willrender these interviews will be mainly based on my ability to understand and interpret bothobligations and concerns of one another within their respective role. 15
  16. 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 isempty and practice without theory is blind». Cross, 1981, p110 This sentence highlights the importance of the interdependency of theory andempirical research. In other words, it is essential to master the positioning between thetheatrical part and the empirical research. In this way, it is primordial to choose de rightscientific approach, in accordance to the empirical research and vice versa, in order to write asuccessful thesis. This approach unable me to switch between theories and practicesthroughout my research. To reach this objective, my empirical research will be relying ontheoretical material through my literature review, what should lead me to formulatehypothesis. 3.3. Qualitative approachTo establish a change in the very heart of a company is not an easy task. Actually, as it hasalready been proved, there are plenty of variables to consider when implementing change.These variables transform the change process into something complex and risky. Theimportant numbers of failures when launching a change justifies the interest that could beborne 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 theuse of a concrete and real case which will show the interest to facilitate a perfectunderstanding of the existence of human factor in the implementing. Although the use of onesingle case will have the perverse effect of generalizing the results of this study, the tools usedfor 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 casewill be completed by the carrying out of the interview managers. The interest of theseinterviews will be to discern the way they apply implement change in a practical case, and theplace reserved as well as the developed arguments dedicated to human factors whenimplementing change in their company. 16
  17. 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 caseand it will be founded on my very own experience in enterprise where I have been a salariedfor roughly more than one year and a half. The study of this case will consist on an objectiveand impartial analysis. As this case is not officially published, and in order to protect theconfidentiality we shall call this enterprise "Alpha". This firm is a yacht insurance brokerageagency. The building trade of insurance brokerage agency is to found the best insurance at thelower price for their clients. To reach this objective, the insurance brokerage companydevelops agreements with national or international insurance companies to allow him to sellinsurance products. In facts, an insurance brokerage agency is an intermediary between hisclients and insurance companies. Alpha has been bought out by the actual owner in 2008. When the actual ownerbought this agency, all the management of the firm was made without management softwareand with a poor marketing investment. This confronts the actual owner to reorganize themajor part of the management of the firm, implementing a specific management softwarepackage (controlling all the process of new contract creation, contract renewal, theaccountancy process, the cost control management, insuring the transparency regardinginsurance companies‟ requirements...) and developed the major marketing tools in order toincrement our visibility at an national and international level according to our productspecificity. This special study case seems very interesting to me because of my specific role in thisenterprise. Actually, my main target was to establish solutions in partnership with my superiorand then to develop and apply them. This opportunity has therefore allowed me to betterconceptualize the relationship between an enterprise manager and his employees. In fact, thisstrategic position gave me to understand the needs, the expectations, the concerns of 17
  18. 18. a manager, and to confront them to the needs, the expectations and the preoccupations of hisemployees. The chapter 5 of this thesis will then be centred on the analysis of this practical case ofimplementing change inside this enterprise. Besides, this chapter will offer the opportunity toconfront the methods of implementing change with the theories of the implement of changequoted in my Literature Review. To describe the methods of management with the theories of this implementing ofchange will offer the interest of analysing and confronting the methods of management withthe different analyses and researches realized by well-known and acknowledged authors.To establish the differences of the researches realized by famous theoreticians, based onvarious experiences and analyses having led to the final result of the established theories, withthe methods and uses of these theories will offer the interest to measure the use of thesetheories in the methods of the actual management. The aim of this analysis will then be toevaluate the use of the theory for a manager moving in a logic of implementing changeprocess. 3.4.1.2. Interviews The settlement of this change is a complex process to lead and approach because ofthe 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 hadbeen confronted to this type of problematic . A great deal of studies and articles reveal that the greatest part of the failures whenimplementing change was mainly due to a bad estimation of the human factor in the drivingof the change (McKinsey2003). Of course, these interviews will only give a partial view of the way to implementchange together with the taking into consideration of the human factor in an implementingchange process; nonetheless, they will allow a better comprehension and interpretation of atrue reality.The analysis of these interviews will then permit to understand the theoretical approach ofimplementing change in a practical case. 18
  19. 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 wasspecialized in processing of maerl (seaweed‟s fragment rich in limestone). Since then thecompany 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 60countries into 13 business lines: Agro-supplies, professional hygiene, Mineral and industrialproducts, Magnesite, Plastics, Garden products, Food phosphates, marine biotechnologies,Operation and transformation of seaweed, Naval equipment, Pastries, Cooked meat andseafood. Mr Ramon has been working in this firm for roughly 20 years. In this interview, hewill explain the complexity of change management in an IT change process, the issues theymet and the results of one IT change project.Second Interview: Interview with G. L.J. , Chief Executive Officer in the same French multinational thanin the first interview. As I present previously, this firm is a multinational developed in different line ofbusiness. With this CEO, we will focus on, a Spanish subsidiary of this multinational, boughtin 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 accordingto complex industrial processes before the commercialization of fully or semifinishedproducts. Therefore this firm is depending on the natural resources of this mine. 19
  20. 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 anddevelop 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 granulatedpowders sold as such in bags or under the shape of tablets. These enterprise products areaimed at industrial partners working food, dietetics, pharmaceuticals, cosmetics, veterinarynets or nutritious complements for animals. This company employs 7 persons. If the work instrument of production of this firm is rather complex, the differentcircuits of information‟s flows is on the whole rather simple. The main need concerning thefollow-up of information and the total traceability are imperative in what concerns this sectorof activity, and of course this applies for each batch of manufacture. During this interview, A. RAGUET will explain us the change management process heapply 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 abetter theoretical understanding of the subject as a whole. The books selected in the literaturereview have then given me the possibility to increase not only my knowledge‟s but also tobuild a strong theoretic framework. The use of news articles and internet sites give access tosnippets of informations often focused on one part of a precise subject from which emergeboth concepts and hypotheses .By their simplicity of creation and publication, unlike books,they give the opportunity to compare with subjects connected with actual facts .Thecombination between books, news articles and internet sites then give access to complete aswell as to partial researches which ,once they have been put together ,give access to atheoretical basis rich in informations. 20
  21. 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 acritical issue for each type of organizations. Since the industrial revolution, the stakes ofhandling change have never been so high. In the actual economic environment, most traditional and successful organizationshave 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 exogenouscauses, changes have to be implemented within each organization at some stage of theirexistence. It can also be introduce in order to meet certain market growth expectations, or topredict and adapt to eventual problems, etc. The ability to adapt and change is the key tosurvive 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 impactshumankind 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 alignedwith their environments, either by reacting to external events, or by proactively shapingthe 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 wholeorganization. It allow to change the system in a more deep and fundamental way. Anunplanned change happens when the organization is constrained to react to someunanticipated external change, coming from the firms environment. In unplanned change, theanswer is adaptive and habitually spontaneous. Organizations and firms in particular are complex, multifaceted and no one issimilar. In order to have a clearer outline and understanding of implications of change for 21
  22. 22. these firms, a clear distinction has to be made between organizations which conducts theirown business, handle and manage their limited resources, and organizes the production ofservices, and products, and how it is able to create value to customers. The organizationalstructure refers to the division of tasks and people into smaller clusters. According to De Witand Meyer (2004), “all organizations need at least some division of labour in order tofunction efficiently and effectively, requiring them to structure the organization in smallerparts”. They also argue that the organizational system would considered “how the individualspopulating a firm (organization) have been configured, and relate to one another, with theintention 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 adaptthemselves to the new structure and appropriate it. Some department or function can be givingup or transferred due to their inefficiency or their inaccuracy, etc. Several techniques can beused by the manager leader to realise organisational change, and the following methods arethe 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 focusall the efforts of the enterprise on the most beneficial activities and give up the other oneswhich are not profitable, or not profitable enough. It means focus on the core business of theorganization, with the goal of cutting costs and maximising profits. The second method isdelaying. This step requires to concentrate all efforts on the most profitable activities and totransfer 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 allunneeded equipment. This is relatively common in situations of organisation grows or whenmerger occur. The impacts of these changes are directly visible on the organisational structurelevel of the firm and the corporate culture level as well. When reorganisations occur on astructural level, "the authority relationships within the hierarchy are temporarily or definitelymodified" - Franziska Fritz & Philippe Massart (2007 - The Process of Change: The Role andImpact of Leadership). These changes disrupt the status quo, the companys employees aretherefore constrained to adapt to a new emergent order and hierarchy. The emergence of newresponsibilities could change levels of hierarchy. After the change, a phase control can beimplemented by either the top or bottom of the organization. On the ground, the control isfrequently achieved by lower levels for large organizations, whereas in a small organization,control is exercised by higher levels. 22
  23. 23. About management system, it is interesting to compare the modern westernmanagement models and other models of existing management. For example, the Japanesemanagement model and the Swedish model. According to Masaaki Imai in his book "Strategyprocess, content, context” (De Wit and Meyer, 2004), the Japanese management system ischaracterized by a continuous improvement process, incorporating the professional life, socialand family life. Job functions from the Japanese perception include all segments of theorganization and involve improvement and maintenance. “Consensus, the hidden code ofSwedish leadership is a book written to highlight the enigma of the Swedish leadership styleof getting everyone to agree at all levels of decision making” (Alexander, 2008). Thisincorporates a strong attention on team-work, non-confrontational style of communication,and coaching. These characteristics could be described as a Swedish model on managementstyles. 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 expectationsof employees has become indispensable. “The difference between failure and success inimplementing change in an organization depends highly on the people themselves” FranziskaFritz & Philippe Massart (2007). This concept shows the importance that must allocate theagent of change on identifying the expectations of employees, observing their attitudes andbehavior during the implementation of change. Therefore the change agent now incorporateschanges at the individual level in order to encourage the organization to move in a newdirection. In their publication "The tools of change in cooperation", Christensen, Marx andStevenson, 2006 states that “managers can use a variety of carrots and sticks to encouragepeople to work together and accomplish change. Their ability to get results depends onselecting tools that match the circumstances they face”. (p.73). According to the authors, themain key in change management is that it is imperative to make each stakeholder workingtogether in a methodical way. In this article, Christensen and al. presents the example of DurkJager, former CEO of Procter and Gamble. D. Jager unfortunately failed in implementing arestructuring program which had the aim of changing Procter and Gamble‟s culture. The mainreason of that failure is that Jager did not include the employees in the process of changewhich 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 anychange initiative is to assess the level of agreement. This concept is evaluated along two 23
  24. 24. dimensions. The first dimension is “the extent to which people agree on what they want: theresults they seek from their participation in the enterprise; their values and priorities; andwhich 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 ofcause and effect, they will probably agree about which processes to adopt” (Christensen etal., 2006, p.73). Their “Agreement Matrix” sketched those dimensions. The vertical axisrepresents agreement by firm‟s people on what they need; the horizontal axis represents theiragreement 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, evenif everyone can have a different vision of the type of actions that will be needed to meet theseexpectations. People are result oriented, “just do it” (Service Management Art -http://www.itsmf.ca/documents/show.php/2854/ITIL%20and%20Management%20Commitment%20v1.pdf). In the upper right quadrant (B) are organizations whose employees agree onwhat 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 theorganization’s culture highly hard to change because the people are generally satisfied withwhat they get out of working in the organization and agree strongly about how to maintainthat status quo” (Christensen et al., 2006, p.73). Several organizations on the lower-right partof the matrix (C) are those that involve a mess of contractors. Employees show littleinvestment to achieve the objectives of the company, but the procedures are strictly adheredto, if they believe that their actions will achieve the desired results. People understand thecauses 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 theworld 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 theorganization is. For the leader, the agreement matrix helps him to know the degree of thepeople‟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 rightfunction and employment. This is done to ease the major change effort and to seek and findpeople with the ability to integrate the firm with a positive and participative dynamic. 24
  25. 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 newinput, approaches and leadership style to the organization. Broad consensus Extent to which people agree on what they want A B D C No consensus No consensus Broad consensus Extent to which people agree on cause and effectFigure 1 - The Agreement Matrix - Source: Franziska Fritz & Philippe Massart (2007) figure based on “The tools ofcooperation 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 thefirm. In effect, these gives rise to new methods and new work processes that it is imperative todefine when implementing changes. For example, the introduction of new software oftenleads 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 inthe external environment require companies to pay attention to these evolutions in order tostay in the competition. In this context, the organization may be anticipating changes in itsenvironment, 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 inthe market or to become a first-mover” (Franziska Fritz & Philippe Massart - 2007). 25
  26. 26. However, if the concept is easy to understand, the reality is far from simple. Thecompany who has devoted significant investment both financially and human, show somedifficulty with new changes.The company could be “investment lock-in” and “Any gradualmovement away from the past investment will increase the risk of not earning the big amountof 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) orproprietary system (e.g. Windows operating system, SAP enterprise resource planningsoftware). Once the firm has implemented a standard or system, switching to anotherplatform 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 organisationhas its own way of creating value-added. They turn or add an input to commercialize its ownproducts and services (output). A business system is unique for each organization. Therefore,Companys organization is closely linked to its business system. Organizational changes willhave 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 andMeyer, 2004, p.164). The characteristics of the business system are threefold on which theorganization 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 26
  27. 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 ChangeExperts tend to agree on the fact that the distinction between discontinuous and continuousChanges 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 approachDe Wit and Meyer qualify these two elements as “the dichotomy between discontinuousrenewal 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 renewalperspective are revolution over evolution, disruptive innovation, creative destruction, radicalpace of change, sudden break of the status quo, a stable and unstable alternation of states anda punctuated equilibrium. (De Wit and Meyer, 2004, p.182)This former approach has been mainly adopted in western companies, or in companies fromthe MEDCs (more economically developed countries). An example of a discontinuousrenewal perspective is the Splitting of the British gas in 1997; The liberalization of residentialmarket consumption played a big role in this radical move (from a continuous to adiscontinuous approach). For instance, British Gas Company radically changed its retailingpolicy, from a simple gas supply to essential household services, as the best way to ensuretheir sustainability. 27
  28. 28. This move enabled the company to make a step toward a competitive environment whileasserting their competitiveness, and reorganized their structure in a more customer orientatedway, appearing as a service provider.Within 3 years, the company has broaden its product range which now integrates everything itneeds to, keeping in mind the slogan: care of the essential. By 2001, 90% of its operationswere represented by service supplies to customers (British household). Nevertheless, it can occur that a continuous change would be rather more efficientthat an abrupt one. The main characteristics of this approach are: Evolution over revolution,uninterrupted improvement, organic adaptation, moderate and undramatic change, gradualand steady pace of change, continuous adjustment, and a persistent transient state and gradualdevelopment. (De Wit and Meyer, 2004). This style of change is usually the one preferred inJapan.The concept of Revolutionary change is used to describe an immediate and radical changethat occurs in a rather short while. The goal of such a change is to get rid of the status quosituation and to replace it with new orientations.Revolutionary change usually takes place to put a final point to the common way of doingthings and thinking about the company‟s tactics. For instance, reacting to deeply rooted habitsand routines no longer suitable for the company, no other change (at a smaller scale) wouldhave been as efficient as a revolutionary one. Indeed, such routines or habits can paralyze thecompany in a rigid business and organizational system.According to De Wit and Meyer, 2004, the main factors which will trigger a revolutionarychange are the following: competitive pressure, regulatory pressure and first-moveradvantage. Willing to adapt to our post-modern era, organizations have to deal with as muchchaos 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 asanalytical tools of the process of change are shown below: 28
  29. 29. 1. Evolution and Revolution Dealing with the paradox are presented in figure 2 Evolution and Revolution Dealing with the paradoxFigure 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 toaccomplish dramatic improvements in critical, contemporary measures of performance: incost, quality, service and speed”. Figure 3 presents a tool haw to reengineering work byHammer (1990). Reengineering work The EssenceFigure 3 - Reengineering Work - Source: Synthesis from Hammer (1990), as cited in De Wit and Mayer (2004) 29
  30. 30. 3. Convergence and Upheaval is presented by Tushman and Romanelli (1985) stated scope of Reformed mission and core values Altered power and status Reorganization Revised interaction patterns New executivesFrame-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. Thepublication in 1972 of "Evolution and Revolution as Organizations Growth" (HarvardBusiness Review -50) by Larry E. Greiner has identified five main phases ("The five phasesof 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 mainobjectives are: to create a new product and a new market. At that moment, the organizationis characterized by a physical and mental investment dedicated to product and selling and inthe same time it shows certain contempt for management. The communication is frequent andin a way informal. As the company grows, the increases of production ask for a betterorganization all together with an increase of the number of employees both on the productionlevel and on the management level. 30
  31. 31. The organization cannot then be simply managed by the means of an informalcommunication, it has to be structured. The founders of this organization are then facing asituation that impels them to assume responsibilities of management they do not wish. It is atthat moment, according to L.E Greiner that the leadership crisis arises. During that time thefounders of the company will have to delegate some responsibilities by the employment of abusiness manager having knowledge and skill. This makes up one of the first phasesof important change in an organization.Phase 2: Direction... This phase of "Direction" is characterized by the setting of partitions between thedifferent 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 impersonalas a hierarchy of titles and positions builds. The forward integration of a new hierarchy causesan evasion of power towards the management authority; lower- level supervisors are losingautonomy and lower-level employees find themselves restricted by a centralized hierarchy. Atthis moment a crisis of autonomy arises.Phase 3: Delegation... The following stage of the growth of an organization develops after the successfulestablishment of its decentralization. The organization finds itself in a favourable situationand the managers feel motivated to penetrate new markets, develop new products andimprove their reactivity. At this stage, serious problems may occur. The top executives feelthat they face a situation in which they lose control while confronted to an increaseddiversification. The favourable results of the organization make the managers refer to certainautonomy and consequently act on the fringe of the company without aiming to thecoordination of new projects and schemes of investment...within the company. “Freedombreeds a parochial attitude ". Therefore, the top management has difficulty in getting back tothe control of the company.Phase 4: Coordination... This phase is characterized by the implementing of new systems allowing a bettercoordination .For instance: establishing formal plans, procedures, controlled expenditures...we 31
  32. 32. can also observe that stock-options and company-wide profit sharing are settled in order toendeavour a spirit of organization towards everybody.These new systems of organization permit a better allowance of resources and at the sametime they make the capacity of control easier.Therefore, the managers find themselves compelled to justify their actions, increasing then theloss 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 wellas the staff directions both criticize the administrative cumbersomeness developed in theorganization.Phase 5: Collaboration... The phase of collaboration is characterized by its endeavour to solve the red-tap crisisshowed in phase 4. To reach that, the organization is given to favouring a greater spontaneityby creating teams made of people having complementary abilities. The target of implementingthis 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 ona management of the behaviours.Larry E Greiner illustrated these 5 phases according to the following chart:Please, refer to the next page. 32
  33. 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 ofthe organisation "Organizational Life Cycles and Shifting Criteria of Effectiveness: SomePreliminary Evidence" Management Science 29(1983). That study can, in a very interestingmanner, 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 tofour major bases emerging from the analysis of the following nine theories of the life cycle ofthe 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) 33
  34. 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 fourphases of the life cycle of the organization:1.Entreprenarial Stage 2.Collectivity Stage 3.Formalization and 4.Elaboration of Structure Control Stage Stage Marshalling of  Informal  Formalization of rules  Elaboration of structure resources communication  Stable structure  Decentralization Lots of ideas  Sense of collectivity  Emphasis of efficiency  Domain expansion Entrepreneurial  Long hours spent and maintenance  Adaptation activities  Sense of mission  Conservatism  Renewal Little planning and  Innovation continues  Institutionalized coordination  High commitment procedures Formation of a « niche » « Prime mover » has powerFigure 6 - Robert E. Quinn & Kim Cameron “Organizational Life Cycles and Shifting Criteria of Effectiveness: SomePreliminary Evidence” - 1983 The synthesis of these two studies allows a modelling of the life cycle of the entireorganization, thus taking into account the majority of the factors of endogenous change inrelation with the growth of an organization. 34
  35. 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 strategicchoices that the organization will make. This circle is called environment and it is the one thatwill have to condition the markets through its direct influence one the organizations. As arule, the organization environment is defined as the whole elements external to theorganization but in relation to its activities (CERAM, 2008- The influence of environment onthe enterprise). In a world which is becoming more complex and global (Shein, 2009 – the corporateculture survival guide – Revised edition. Jossey-Bass, USA), organization has to face aconstantly evolutionary environment. In 1979, Michael Porter (Porter, M.E. (1979) HowCompetitive Forces Shape Strategy, Harvard business Review, March/April 1979) listed fivevariables 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 35
  36. 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. 36
  37. 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 Porters 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. 37
  38. 38. Figure 8 – Five Forces Michael E. Porter -Sharon Larsen - February 18th, 2009 This organization chart describes perfectly the pressures that the economicenvironment can cause to an organization. Nonetheless, this approach of environment can becompleted by other variables directly affecting the functioning of an organization. BertrandVenard (Audencia School Management-2007) describes the organizations environmentaccording to 10 points: 1- The competitors, the size of the industry, the level of competition. As shown in Porters 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,Porters analysis aimed mainly on the industry sector, but since then, the services sector has been considerably 38
  39. 39. developed, either as a service associated to the sale of a product or as the market of theservices itself. Keeping in mind the Porters analysis on the industrial sector, we see thatthe service associated to the sale of a product, provided it is a reliable one, can proved tobe 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 Porters analysis represents an importantfactor of the enterprises environment. Actually, depending on the countries where theenterprise is situated or in which it wishes to develop its business, the enterprise will haveto possess a perfect knowledge of the labour market. Does it provide the necessarymanpower? The required competences? What is the working flexibility? How powerfulare 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) 39
  40. 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 Porters 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). 40
  41. 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, lALENA, lASEAN 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 . 41
  42. 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. 42
  43. 43. International Context Environment 10- International Sector 9- Socio- 1- Industrial Cultural Sector Sector 2- Raw material 8- State Sector Sector Organisation 7- Economics 3- Human condition resources Sector Sector 6- 4- Finacial Technological ressources Sector Sector 5- Market Sector Figure 9 - International Context environment – Bertrand Venard – Audencia School of Management The economic environment of a market must be entirely controlled by an organizationas it has to anticipate and answer the evolutions of its environment. "Our environmentcompels us to change permanently: to change means to exist tomorrow" (Atlas duManagement).In other words, the ability for change, of an organization, and to stick to its environmentencourages its capacity to remain competitive. To anticipate and react to the environment evolutions comes up from the ability of theorganization managers to be aware of the environment in which they move. Keeping that inmind, the manager will be the one who will decide and successfully implement the changewith regard to his environment. Doing this, he will finally develop what will be considered asa competitive advantage for the organization. 43
  44. 44. 4.3. Change and rigidities to change“Im not interested in preserving the status quo; I want to overthrow it.” NiccoloMachiavelli (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 andFrench 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 itcan 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 IIand Tippett, 2002, p. 273). Through this study, the authors highlighted the importance of participatorymanagement in the process of softening the resistance to change. They assumed that the directinvolvement of employees in that process was compulsory to successfully implement changewithin the organization without having to face an active resistance to change.The effects of not involving employees, who are directly concerned by the implications ofchange, can be devastating. It can waste the potential of the change and even intensify anissue. According to Coch and French (1949), “because individual and group behaviour in anorganization are largely determined by a group norms (fundamental to the organization’sculture), the changing of certain of these norms and their accompanying values that areintegral to culture needs to be a major focus on an organization change effort” (As cited byBurke, 2002, p.52). 44

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