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Pierre Le Jean Master Thesis


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MBA Thesis 06/2011 …

MBA Thesis 06/2011
Title: Change Management, Some Preliminary Key Factors to Succeed in Leading People

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  • 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. 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. 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. 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. 5.2.4. 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. 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. 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. 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. 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. restructure and adopt new technologies ,a higher co-operation ,total quality managementprograms, re-engenering ,mergers… ( 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. 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. 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. 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. 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. 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. 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. 3.4. Data collection 3.4.1. Primary data 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. 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. 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. 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. 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. 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. 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. 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. 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 - 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. 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, 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. 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. 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. 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. 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. 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. 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. 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. 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. - 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. 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. 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. 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. 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. 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. 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. 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 – 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. 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. 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. 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
  • 45. Besides, employees‟ resistance to change is often linked with the uncertain andambiguous future which characterizes the change (Burke, 2002). Indeed, the more employeesare installed in deeply rooted routine and habits, the less reactive they will be to continuousimprovement. They will not feel new management methods as a plus but as a threat for theirexisting system. Quoting Deal and Kennedy (1982), Elrod II and Tippett (2002) wrote: “thesignificant barriers are raised whenever change is not recognized as loss, as the death of theold” (p. 273). Actually, people who do not recognize the loss shall be condemned to stay inthe “denial state”: this is what occurs in the majority of the models of change. The process ofchange must pay a great attention to make employees understand, feel and accept the change.According to Kegan (n.d.), this employees‟ involvement in the process would give them amore global point of view, necessary to make them apprehend the change as a naturalprogression rather than a rupture. In that way only, people may begin to accept change, “ifnot, actually welcome it.” (As cited in Elrod II and Tippett, 2002, p. 273). This idea of a global view will help employees to see the company as a commonworkplace rather than compartmentalized in several self-interest. Moreover, De Wit andMeyer (2004) state that “the stronger the organizational culture is, the more efficient in termsof performance it is”. In another hand, if the strength of the organizational structure canincrease the resistance to change. For instance, taking the eventuality that a company, pushedby situational factors, need to change radically its organization, the efforts for change may beweakened by a too strong culture. “Therefore, in short, organizational culture is a double-edged sword. People can also become immune or reluctant to change” (Franziska Fritz &Philippe Massart - 2007). The difficulties of implementing change can be strengthened if people have common(and usually wrong) assumptions about the market and the way to adopt change: changementalities when the whole group agree upon the same can turn out to be hard. Managers must reshape this organizational belief in order to relieve the resistance tochange. Nadler states that “for effective change to occur, and in particular cultural change,there is no substitute for the active engagement of the CEO and executive team. Top leadersmust assume the role of chief architect of the change process” (Kavanagh and Ashkanasy,2006, p. 83). The authors ranked the leaders‟ actions and influences as a top priority.Nevertheless, as we underlined above, managers must take into consideration employees‟involvement in the change process (participative management) in order to smooth the change. 45
  • 46. As stated by Cartwright and Cooper (1993), “one of the most common difficulties stems fromwhat might be called “cultural differences” (As cicted in Kavanagh and Ashkanasy, 2006,p.83). But, to be able to modify the corporate structure, managers first need to understandand to keep in mind the ways things are organized so far. The intrinsic quality of the socialsystem (involving people, work and systems in general) is to be resistant to change: it seemsdesigned to nullify the impacts of change implementation. But the complexity oforganizational cultures increases the difficulties of change implementation. Weiek and Quinn,(n.d.) maintain “that every cultural system will cover continuous, incremental changespunctuated on occasion by more episodic, radical change”. Finally, Sathe and Davison (n.d.)agreed that “culture change consists of changing people’s minds as well as their behaviour.”(Kavanagh and Ashkanasy, 2006, p.84) To sum-up, we have seen so far that the more people agree on commonassumptions, the harder the change implementation. Besides, an organizational culture iscomplex and changing; this increase the difficulties of understanding this culture in order tobuild the change process upon. Another step in the difficulty is made when talking aboutinternational mergers or acquisitions. Cartwright and Cooper (1993) have suggested that “thedegree of constraint placed on individuals when a change from one culture type to another isin progress, will depend on the types of cultures being merged.” (Kavanagh and Ashkanasy,2006, p.84). The authors linked this approach with the four cultures types, namely: power;role; task; achievement; person/support. Huge efforts in cultures adaptations would need to bemade if managers have to blend different kinds of organizations, one more “role cultureoriented” with one more “person/support oriented” for instance. 46
  • 47. Figure 10 - The Relationship between Culture Types and Individual Consequences - Kavanagh, Marie H. &Ashkanasy, Neal M., The Impact of Leadership and Change Management Strategy on Organizational Culture andIndividual Acceptance of Change during a Merger, 2007 It is important to bear in mind that change implementation there is always a winnerand a loser. Often, the strength of the winner during changes due to the fact that he hasnothing to lose and so therefore everything to gain. The personality of the winner ischaracterized by a strong motivation and a creative spirit. While the loser is conservativepeople, he wants to keep his gains. The loser is not risk taker, he is conservative and is thefirst to show resistant to change. To cope with this situation there are two types of solutions,negotiation or give and take agreement. Other authors discovered why some companies resisted change. According toMetzger (1981), for any proposed change or development project, the organization is facingresistance. The employees of a company want to feel safe, what this translates into a desire forstability, and thus does not change. Lewin (1951) identified three methods to reduce andovercome resistance to change, increase the Knowledge of staff, have the ability to putthemselves in the shoes of others (empathy) and employee engagement in the process ofchange. 4.3.2. Resistant of Management Change and Transition According to the Harvard Business School (2003), the company should not wait fora crisis to decide the change. However, the example Ford, "Change-or-die", has shown thatorganization could emerge stronger from a crisis situation. In addition, this article highlights 47
  • 48. the importance of the change leader, “as he can raise concern regarding a current,problematic situation, and urge management to challenge the complacency without resortingto “crisis mode” tactics” (Franziska Fritz & Philippe Massart - 2007). Beer (2002) hasdefined a number of tools in order to ease the change and challenge the complacencyapproaches: 1. Leverage information from the competition watch in order to make employees aware of current and future problems. 2. Communicate and proceed participatory management with employees in order to know their problems and concerns. 3. Make a discussion around the data with the shareholders in order to create an overall understanding of the corporate problems. 4. Setting high goals and encourage employees to achieve them The Harvard Business review (2003) highlighted that people resist to the changebecause they feel as losers in the change. When the resistance to change is characterized by anunwillingness to achieve the objectives or to follow the process outlined, resistance is calledpassive resistance. Resistance is called active when the resistance is direct or subversive. Thesame article also defines a method for manage resistance to change by identifying theplausible resistant to change. Here‟s a sample of this method: o Answer the question: “Where and how will change create pain or loss in the organization?” o Detect which are the people who have something to lose and try to anticipate their reactions. o To put across to the resistant the necessity to change by communicating with them. Establish a situation of emergency and explain the necessity of breaking with the status quo. o Demonstrate and emphasize the benefits of change to the resistant. Example: job security, wage increases… o It is important to find a place, a role in the change implementation for resisters. Their involvement in the change process is important to mitigate resistance to change. 48
  • 49. o Change is perceived as a loss of control by employees, which is why they oppose the changes. In this context, the role of the leader will be to make resistant active players in the implementation of change. If these attempts prove to be failures, the resistance should be transferred to anotherdepartment where their skills can be utilized. In summary, this research aims to identify and understand resistance to change andthe reasons motivating them to resist. Other authors have developed theories and tools useful in defining the strategy forchange or during the change implementation: 1. Change management, manage evolutionary and revolutionary change - figure 11Figure 11 - Corporate transformations as a countercurrent process - Source: Krüger (1994); (as cited in De Wit andMayer, 2004) Top-down management is characterized by a weak influence of the employees of theorganisation. The corporate strategy is defined by the enterprise management which imposeswell established way of acting. The functioning of the organisation is directed by a systemof strict regulations and the developments of the enterprise are exclusively going from "top tobottom".Bottom-up management is characterized by a strong influence of the employees of theorganisation. This type of organisation aims to involve the employees into the enterprise 49
  • 50. development: their role is to be the driving force within the organisation development. Thesalaried have a definite autonomy which allows to solve by themselves the difficulties theycome across. The organisation functioning is defined by a system of little restrictiveregulations appearing under the form of general instructions. The developments within anenterprise go from "bottom to top ". Business reengineering is one of the most well-known kinds of top-downmanagement; its aim is to entirely reconsider the strategy or the processes of the organisation.The realization of these tasks requires the help of somebody with strong capacities in order, aswell to implement a change as to encourage that change with the salaried.The most famous among bottom-up managements is the "Kaisen" (small improvements)Kaisen is a Japanese word meaning: improvement. The concept is based on a constantdevelopment of the processes of production and engineering, arising as well at the level ofbusiness processes as at the level of the enterprise management. The "Kaisen" is an approachthat could be so defined: nothing is good enough that deserves to be kept. Both these two concepts have their advantages and their drawbacks. That is why,nowadays, the concepts of top-down and bottom-up are associated. The top-downmanagement is used when there is an in-depth change (Strategic Developments) even whencontinuous evolutions are developed by the bottom-up management. A constant dialogueshould then be entertained by each part in order to guarantee a steady evolution of theenterprise. 2. De Wit and Meyer (2004) argued that the stronger corporate culture, the moreeffective it is, and it is more difficult for changing, as described in figure 2.7. Corporate Up to date Not up to date culture is: Strong „Accelerator‟ „Fossilisation‟ Weak „Mild Breeze‟ „Flat Tyre‟Figure 12 - Corporate culture and effectiveness in change implmentation - De Wit & Meyer 2004 50
  • 51. “The imaginary sum of values shared by all company members, their mind-sets andbehavioural patterns form the central elements of corporate culture” De Wit & Meyer (2004) According to De Wit and Meyer, values and belief participate to the construction ofthe genetic code of the organization and in the same time to the structure of the industry, thenature of the competitive advantages and the corporate strategy. When the environmentchanges, a strong culture of the enterprise can incite to struggle against or anticipate thechange. A strong organization culture accepts that if there is a possibility of change, theorganization might be in a position of "fossilisation " or "flat tyre". This concept wouldexplain that some enterprises formerly successful are now in decline because the changewithin the organization is received as dramatic (De Wit &Meyer). 4.4. Change implementation process and keys success factors 4.4.1. Implement change, the Lewins three -Step model. In 1951, Kurt Lewin developed the Three-Step Model. This researcher in socialscience developed the concept of Forcefield Analysis based on the observation that the "statusquo" is the result of driving forces and resisting forces. (Michael A. Beitler PhD - StrategicOrganizational Change-2003) Figure 13 - Lewins Forcefield Analysis Driving forces favour the change for they push and motivate it, when resisting forcesare an impediment to that change by driving the salaried towards an opposite direction. 51
  • 52. In this context, Lewin developed the Three-step Model in the aim of analysing these forces asto unbalance the scales towards the wanted direction: the change.The Three-Step Model takes place in three stages: Figure 14 - Lewins Three Step Model - Adaptation from the author The present situation shows a state of equilibrium. It becomes necessary to unfreezethe current situation (status quo) to overcome the resistances to change (RobbinsS.OrganizationalBehaviour-2002-Prentice hall; 10edition) to unfreeze the situation threemethods can be used: - Increase the driving forces. - Decrease the restraining forces which negatively affect the equilibrium. - Find equilibrium between the two above mentioned methods. The second stage of this theory aiming to change the behaviours is the moving phase.To move the organisation or the unit to change behaviour requires a planned intervention.This will be a time of insecurity and fear for many organizational members (Michael A.Beitler, 2003). Three actions can be led to favourite the moving step (Kristonis A. –Comparison of change theories – International journal of scholarity academic intellectualdiversity – Volume 8 N°1 – 2004-2005): - Make the salaried understand that the status quo is not beneficent to them and encourage them to analyse the problem with a new perspective. - Work all together to find new perspectives. - Connect the perspective of the team with the leaders view in favour of change. 52
  • 53. In the third step, Lewin said: we must "refreeze "the situation. It is imperative that thisstage should be operated once the change has been implemented so that this stage is kept inposition during that period; if not, the members of the organisation will return to their formerand confortable habits (Michael A .Beitler2003). One of the actions that might be settled tofreeze the situation will be to reinforce the new concept through the use of formal andinformal rules (Robbins S.-2002). This Lewins concept shows off the influence of the forces favourable or unfavourableto change. Therefore, the change will be implemented when the joint driving forces are moreimportant than the resisting forces. 4.4.2. Keys success factor in change implementation The Kurt Lewins model of change previously brought in indicates the different stagesof implementation. In order to implement the change, the leader will have the possibility toinfluence its success through the development and the use of keys success factor. “Each keyallows to realize a function (put the change into effect, mobilize the employees, manage theemotional aspects, etc...) and that is necessary for the success of the change” (Grouard B .&Meston F.-1995- The enterprise on the move , be successful while implementing a change -(Dunod-2nd edition) John Kotter (1996) has defined "The Eight-State Process of Creating Major change" inhis book "Leading change". This method doubled with "The ten keys of change" by BenoitGrouard and Francis Meston(1995) permits to obtain a more complete approach of the keysfactors when implementing a change. It is defined in 15 points:Please, refer to the next page 53
  • 54. Key 1 Establishing a sense of urgency - Examining the market and competitive realities - Identifying and discussing crises, potential crisis, major opportunitiesKey 2 Creating the guiding coalition - Putting together a group with enough power to lead the change - Getting the group to work together like teamKey 3 Canalize - Define the structure of the project - Associated functioning method able to sustain, make easier and speed up the change.Key 4 Developing a vision and a strategy - Creating a vision to help direct the change effort - Developing strategies for achieve that visionKey 5 Communicating the change vision - Using possible vehicles to constantly communicate the new vision and strategies - Having the guiding coalition role model the behaviour expected of employeesKey 6 Mobilize - Create a dynamics of change near the employees - Ratify the stakes defined in the vision (project) - Define the main axes of improvement.Key 7 Organize the participation - Make sure of all concerned employees‟ participation, not only to enrich their vision but also to make its "concretisation" easier.Key 8 Empowering broad-based action - Getting rid of obstacles - Changing systems or structures that undermine the change vision - Encouraging risk tacking and non-traditional ideas, activities, and actionKey 9 Put into effect - Implement the change - Realize the vision of project in a daily operational reality - Change the structures, the ways of doing, the attitudes, the culture.Key 10 Train and coach - Bring a training as technical as relational to help the employees to participate, in the best conditions, to the implementation, and furthermore, make them live the vision day after day.Key 11 Generate short term wins - Planning for visible improvements in performance, or “win” 54
  • 55. - Creating those win - Visibility recognizing and rewarding people who made the wins possibleKey 12 Manage the emotional aspects - Get rid of resistances and "freezing" entailed by the change in order to permit its concretisation (realization)Key 13 Manage the stakes of power - Redirect the relations of power to guarantee their coherence with the vision - Make it participate efficiently to the process of change.Key 14 Consolidating gains and producing more change - Using increase credibility to change all systems, structures, and policies that don‟t fit together and don‟t fit the transformational vision - Hiring, promoting, and developing people who can implement the change - Reinvigorating the process with new projects, themes, and change agentsKey 15 Anchoring new approaches in the culture - Creating better performance through customer - and productivity – oriented behaviour, more and better leadership, and more effective management - Articulating the connections between new behaviours and organizational success - Developing means to ensure leadership development and successionFigure 15 - Keys success factors in change management - Adapted from the author 4.5. Human factor Management a leaders key success factor in the process of change. My school training and my professional experiences have led me to understand thatwith regard to his stage of development and his abilities, each person could not have the sameattitudes, the same needs, and the same expectations. In a management context, the role of theleader within the organization is therefore to analyse and know the needs and expectations ofthe persons forming his teams. This knowledge of the others will then allow the manager toadapt his management style with regard to his interlocutors. The objective being to implementa climate of confidence adapted to each personality. “Within the today fluctuating context,it is obviously necessary for the senior executive and the team to develop confidence withinthe organization, to remove all brakes preventing everyone from concentrating on theobjectives to be reached." (Paul DAMASCENO – CadredeSanté.com – According to A .DAHMANI in hisbook "Confidence and Management of Human Resources”, the confidence would arise as an 55
  • 56. "invisible social lubricant" and that confirms the P. DAMASCENOS approach. Confidenceallows to limit the resistances to change, for, if the subordinates of a manager do not trusthim, all attempt to change will bring up to the emergence of an opposition to change. Themanager will be confronted to people who will not only refuse the project, but also will noteven make the effort to understand the stakes of change. Consequently, confidence is a crucialvariable for a manager who wants to assert his leadership within the team. 4.5.1. Identify the stages of competence development. As previously stated, the needs and expectations of the employees are differentaccording to their stage of abilities development. Of course, it would be tiresome, indeedimpossible for a manager to define a level of abilities development for each person. There aresome simple tools which allow to classify the stage of the development of ability. PaulHersey, Kenneth H. Blanchard and E. Johanson (Management Organizational Behaviour:Leading Human Resources) have defined four stages of the competence development towardwhich it should be good to adopt a specific style of management with regard to the situation.This approach is called :"situational leadership ". 56
  • 57. Stages of competence developmentD3 : When motivation and competence increase D2 : High motivation, weak competence= D2 becomes D3 when able to utter suggestions. = new post, new activity, new tool, new organization.Indicators: new dynamism, nascent interest. Indicators: Smile, goodwill, voluntary wish, availability.Needs: - Ability to speak up ones worries and to be Needs: understood. - Precise objectives - Ability to listen and to carry out ones ideas. - Instructions and orders of action - Congratulations and acknowledgement of - Delays, duration and priorities. ones high level of competence. - Frequent feed-back on hit results - Encouragement and help to develop ones - Precise definition of the limits of abilities. responsibility - Opportunity to work with others and share - Acknowledgement of ones enthusiasm. common objectives.D4 : High motivations and competences. D1 : Weak motivation, medium competences= Senior executive or responsibility job. = doubts, uncertainty, questioning, "breathlessness"Indicators: is able to train new ones without state of Indicators: negative expression, rattle, overloaded soul, to convey his knowledges, to be well breath established in his responsibilities.Needs: Needs: - Diversity and challenges. - Clear reminder of the objectives and stakes. - Acknowledgement of his contributions. - Explanations of the meaning of tasks to - Autonomy and responsibilities. realize. - Training of people. - Reinsurance when mistake. - Encouragement and congratulations when improvements. - Participation to the process of decision and the solving of problem.Figure 16 - Stage of Competence development - Hersey & BlanchardD1: High motivation and low confidence.This stage sticks to the period of an arrival in a new enterprise or a new service. No matter thelevel of qualification, we here deal with a phase of discovery which demands a closemanagement in order to inculcate its own enterprise culture, its objectives, its priorities... 57
  • 58. D2: Weak Motivation and medium competences.Its a complex stage to manage. The associate begins to understand the enterprise functioning,improves his autonomy, but has not got yet the competences to allow him to impose himself.He begins to doubt, develops a critical attitude and shows an anti- establishment inclination.He attempts to be "proactive" but quickly reaches his limits.D3: Motivation and competence increase.The associate shows more independence and autonomy. He begins to integrate theorganization expectations and the objectives of his function. He is competitive and does notrequire any longer to be strongly managed.D4: High motivation and competence.The collaborator has become a senior manager within the activity or the post, he isautonomous, experienced and efficient. He no longer needs to be motivated, he does ithimself.According to Hersey and Blanchard the style of management must adapt itself to the level ofmotivation and competence of the collaborator. 4.5.2. Identify the styles of management.“Management is the art of getting things done through and with people in formally organizedgroups, the art of creating an environment in such an organized group where people canperform as individuals and yet cooperate toward attainment of group goals, the art ofremoving blocks to such performance, the art of optimizing efficiency in effectively reachinggoals”. (Koontz – Cited in Contextual Management, a global perspective – R. S. BASI) This definition shows that management is an art, an art to create an environmentadapted to each person in order to guarantee their personal success and make them adhere toand reach common objectives. In other words, the leader manager must make sure ofeveryones blossoming so that they may stand as driving forces within the organization. 58
  • 59. Besides the analysis of the stage of development of the competence previously studied,Hersey P and Blanchard K.H. have defined four kinds of management. STYLES OF MANAGEMENT Figure 17 - Styles of Management - Hersey & BlanchardS1: To ManageDirective Management is meant to structure the tasks in a precise way, and to assure a regularcontrol of the accomplished work. The manager is little encouraging, he adopts a verydirective behaviour and precisely defines each task to reach a given objective.S2: To TrainThe training management is always very directive, because the collaborator is stillinexperienced. After a while, the manager becomes more and more encouraging. The managerkeeps much nearer relationships with his associate; he takes time to communicate with himand explain his decisions. He never hesitates as to consult him and takes his advice intoaccount. This type of management requires some kind of vigilance: it may be too explanatoryor asking for a high personal investment. The manager may sometime adopt a paternalisticattitude in this kind of circumstance. 59
  • 60. S3: To SupportThe management of supporting type is characterized by a very encouraging and little directivebehaviour. The collaborator has the abilities, proves to be autonomous and generatespropositions. In partnership with the manager the collaborator takes full participation in theprocess of decision. Concerning this kind of management one must be attentive and vigilant inorder to avoid mixing conviviality and familiarity. Furthermore, in this kind of situation, themanager may be inclined to adopt an attitude of manipulation.S4: To DelegateThis kind of management is characterized by a weak encouragement and a weak support. Thecollaborator is entirely autonomous. He is little assisted and needs no longer to be supervised.The collaborator has the required abilities to achieve the missions he has been entrusted with.When this kind of management is practiced, "to delegate "does not mean laxity, and it istherefore convenient to be vigilant to remain available and to reaffirm ones support so thatthe associate will not feel abandoned . 4.5.3. What kind of management, and for what kind of associate? The final touch to the theory of Hersey & Als situational leadership has therefore beento associate a kind of specific management with regard to the stage of the ability developmentof the fellow workers of the organization .It was done in the aim of creating a favourableenvironment for each person in order to guarantee their personal and collective blossomingwithin the organization.Please refer to the next page 60
  • 61. Management Style & Stage of competences development Figure 18 - Hersey & Blanchard - Situational leadership As the stage of ability development is not fixed, this chart synthesizes the kind ofmanagement to adopt by the manager in relation with his associates abilities. An appropriatemanagement based on the needs and the expectations of the collaborators is one of the waysto counter ill-being at work. It is primordial to counter this ill-being because any person whodoes not feel at ease constitutes a potential brake as the changes intervene within theorganization. The leader manager must bring his support and an appropriate follow-up andalso be sure that nobody should feel either too isolated, mothered or controlled, that nobodyshould feel ignored compared to the competences of his associates. This represents a dailyattention which will allow the leader manager to establish a climate of confidence betweenhim and his fellow-workers. Therefore, through this confidence he will favour the flexibilityof his associates within a period of change. 61
  • 62. Chapter 5 : Empirical study The objective of this empirical part is to contrast the theoretical approach of changemanagement with the field work of change implementation. To enable a better understandingof the field approach, four case studies will be detailed in this chapter, and the study of eachcase will take place following the same method, the same plan, for each case. I have chosenthis method with the objective to provide equal criterias in order to permit comparisonsbetween each case. The usefulness of this choice is reinforced by the fact that, some of thesecase study are revealed to be successful whereas others failures. Moreover, it allows the lectorto analyse section by section, and identify clearly the sources of success and the reasons offailures for each case study. 5.1. Case Study one: Yacht Brokerage Insurance Agency 5.1.2. Presentation of the case study The building trade of insurance brokerage agency is to find the best insurance at 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 and represents his clients.Within a desire of confidentiality, the insurance yacht brokerage agency will be called“Alpha”. Customers Alpha Insurance Companies Figure 19 - Insurance brokerage agency work process 62
  • 63. Process to create and insurance contract:1- A prospect sends to Alpha an insurance quotation request by our website or by phone2- Alpha, turns to insurance companies to realise quotations and suggest the cheapest one to his prospect.3- If the prospect agrees with the proposition, he sends back the quotation duly signed and dated with the payment of the insurance.4- Alpha receives the document and sends it to the right insurance company, who will establish the final contract before sending to Alpha who will send it to the client.5- In case of sinister, the client declares the sinister to Alpha who will inform the insurance company. The insurance company manages all the sinister resolving process. Alpha has been bought out by the actual owners (a couple of insurers) in 2008. At thistime, because all the management of the firm was made without management software andwith a poor marketing investment, the actual owner reorganized the major part of themanagement and developed the major marketing tools of the firm.The implement of a management software package was necessary for two reasons. The firstone was to facilitate the operational operations (new contract creation, contract renewal,accountancy, sinister management…) and the second one, to ensure the credibility of the firmregarding insurance companies. The particularity of this firm is to have a mandate with one insurance company. Onlythree companies in France enjoy this type of special agreement with this insurance company.This mandate allows the firm to manage by itself all the process of contract creation, contractrenewal, sinister management, and sinister payment without the help of the insurancecompany. Comparing with the usual work process previously described, this represents amajor competitive advantage for our firm. All is managed in our office, and all theinformation‟s are kept by us. It allows us a major reactivity, the customer‟s satisfaction andthe reduction of intermediates. Of course, to benefit from this special agreement, Alpha has to complete special rules,transmit reporting and funds every month. In this context, implement a software package wasfundamental to facilitate the complex insurance company‟s requirements. Alpha has to be 63
  • 64. completely transparent vis a vis the insurance company which can send, at any time, anauditor to control the management of our firm. The software package intervened as a tool to answer the necessity of simplifying theoperational processes and guaranteeing a perfect following of the company functioning.In July 2009 I integrated this firm as an apprentice. When I arrived, the owner of the firmasked me to evaluate and facilitate the using of the software package. Like an internal juniorconsultant, I started my investigations by asking and working with users of the softwarepackage. This led me to understand the using and the complex functioning of the software.The results of this investigation revealed several trouble spots. - The first observation was that the software is complex to understand and requires preliminary skills to be used. Most of the actions on the software depend on the human capacity to use it and the software presents a lack of barriers to prevent errors. - The second observation was that nobody in our firm had a complete knowledge and good use of the software. Every week, users of this software have to call the helpline of the software supplier to solve problems they have create by the lack of required skills to use this software properly. These types of problems occurred in production department as in accountancy department. - The third observation. In this management software, like in others, users have the possibility to generate request to have access to information kept in the software data base. This type of request allow users to exploit accountancy information, make production reporting, clients or prospect segmentation, emailing… and even more. The huge number of existing requests, with similar titles have created confusion: which one should they use ? Additionally, similar requests were giving different results, this creates a major interrogation, are they reliable ? But the major problem of some of these requests was their reliability. A list of requests was used to create the insurance company‟s reporting. We discovered two years after the software package implementation that, reporting‟s figures were false, and consequently, the funds sent to the insurance company were also false. - The fourth observation shows that the software helpline people and the Alpha‟s employees were not speaking the same language. Alpha‟s employees had strong 64
  • 65. difficulties to make helpline people understand their requests, and vice versa when helpline people wanted to explain solutions of our problems. - The last observation shows that, because of the previous identified problems, tensions were palpable between Alpha‟s employees. In general, when problems are identified in the production department, the production manager attempts to solve problems directly with the software helpline. When problems are identified by accountancy department, the accountancy manager, who owns the firm with her husband, instead of trying to find solutions together to solve problems, or make a clear request to the software supplier, starts to create conflict before searching to solve them. If I had to describe the personalities of my colleagues, I should have to speak about theowners of the firm and the production manager. Denis, one of the owners, is the main motor of the firm. He is a real developer and isalways going ahead, but without regarding if people are following him and have a goodunderstanding of what he is expecting. Likewise, because of frequently directive changes,employees don‟t have a clear vision and mission. In addition, some internal troubles makethat people don‟t trust him. He is not working on full time in Alpha, most of this work time isdedicated to another own company. The accountant manager, the second owner, shows paranoid rigidity. She disapproveschanges because of ancient experiences. She doesn‟t reappraise the reasons of herdissatisfaction vis à vis of previous change. If she comes across a problem, she concentrateson it rather than attempt to find a solution. Furthermore, she is a conflict generator in the firm. The production manager has some doubts, incertitude, questioning and show somebreathlessness. She needs a clear objectives reminder and definition of the stakes. It‟simportant to explain to her the meaning of the tasks she has to realize. She needs to bereassured. Regarding change, she is neither a break, nor a motor for change. She accepts thechange if she understands the goal of change. In France, based on experience, most ofchanges are perceived as unfavourable by employees. 65
  • 66. Afterward, my role in this company has therefore been to improve the use of thesoftware package, to develop its capacities and to manage the correction of errors existingsince the integration of the software package. According to that, I learnt to use the softwarewith the help of the helpline. As my fellow workers and my managers did not understand thelanguage of the developer, I decided to act as a translator between my company and thesoftware provider. Concerning the use of the software package, I did my utmost to create a great numberof tutorial programs with the help of the hotline, by meticulously listing each stage to applyfor the various actions. Once they were realized, I put them at everyones disposal through ashared server .With the feedback of each one, these tutorials have improved up to beunderstood by everybody .We can still make mistakes but the risk of errors has been lowered.These tutorial programs have consequently showed much interest not only for today users butalso for the training of newcomers. As to the developments to bring up to the software program, I had to understand andevaluate the needs of each part. To reach that target, I had to concentrate on the way toapproach each personality of the company. DENIS, the manager of the company, knowing that he was little available, I compelledhim to spare some time with me to understand his expectations in order to define thespecifications for each subject he would like to be realize . I have drawn up thesespecifications myself so that they could be understood by the developers of the softwarepackage. With the accountant manager who owns the company at equal parts with DENIS, Ihave examined the problems she was confronted to and I made her duly understand thatseveral days of work were not a loss of time as far as we would find appropriate solutions.These few days or intense work for each problem might then allow an improvement andsimplification of daily tasks. With the production manager I developed a confident relationship in order to show herthat I was not there to control her but to help her. Therefore this gave me the opportunity to 66
  • 67. implement changes of functional level. The realization of my tutorial programs has allowedher to reduce the amount of errors of daily input. Furthermore, as we were entertaining arelationship of confidence, it allowed me to set up tools of follow-up, asked or not by themanagement, and at the same time showing her that it could be done not only for the companyinterest but also for her own interest. We have developed, together, tools which up to now were non-existent, and which ismore, of which they cannot do without nowadays. Little by little, after having solvedimportant subjects with each one and achieve precise specifications, I turned to softwarepackage developers in order that they should create or correct the applications we were inneed of. Experience teaches! As I had noticed before, that the requests and the developmentsneeded when the software package was integrated, did not correspond to the initial requiresfor each solutions brought by the furnisher of the software package, I forced myself to checkeach result. To control each solution was for me not only a requirement but also a token ofreliability. Nowadays it is still necessary to carry out some small adjustments but we work ona sound basis! Most of the difficulties we came across were due to a lack of control of thetools created when the software package was set up, and also at a lack of knowledge of thefirst users. 5.1.2. Type and origin of change In this company, the aim of the change was reengineering software. It appears as anorganizational revolution in the management process for the firm. For the employees, theimpact of this change was nil because Alpha was just bought out and there were only newemployees that came to the firm. The firm was working without management software; consequently it was an easy taskfor managers to complete the first step of reengineering Hammer‟s theory: “recognise andbreaking away from the outdated rules and fundamental assumption”. Regarding the secondand the third steps “The reengineering team must ask Why ? and What ?” and “Reengineering 67
  • 68. efforts strives for dramatic levels of improvement”, because employees was new, managersdon‟t had to face to revolve employees behaviour. This change have been decided by the initiative of the managers in order to facilitatethe days to days management and ensure their firm credibility regarding insurance companies,and with the objective of developing new agreements. This motivation for change isconsidered as Endogenous change force, this is a response, or anticipation, related with thelife cycle of the firm. According to the Larry E. Greiner‟s theory (1972), Alpha was characterized as a firmin the creativity phase, while Alpha set up for more than 20 years… In this context, the RobertE. Quinn & Kim Cameron Cameron approach (Organisation Life Cycles and Shifting Criteriaof Effectiveness: Somme Preliminary Evidence – 1983) is more appropriated and Alpha isconsidered in an entrepreneurial stage. 5.1.3. Strategy and process of change Strategy The strategy adopted by this manager was a Top-down strategy. Because of none holdemployees, the managers could not integrate employees in the process of defines the softwarerequirements. So, they have chosen a software package provider, and then implement thesoftware in their enterprise. Process The ordered software was composed of a common base to which it is possible to add alarge number of applications based on the requirements and needs of buyers. To ensure thatthe application requests correspond to the requirements of the Agency, the business ownershave been created a list of their requirement with all of their needs.Thinking that the use of the software was easy to learn, just one people of the firm had theopportunity to have a trainee about the software, the accountant manager, which is one of theowners of the firm. These trainees have been during two days. 68
  • 69. The owners of the firm decided that the production manager will learn about the use of thesoftware by using it and calling the helpline centre in case of doubt, or problem solving. 5.1.4. Rigidities management strategy Because of the specifically context (New company for the owners and newemployees), the implement of change was really simply. The software was installed, andpeople started to work with.At the choice of the change and the implement of the change, the owners of this businesstherefore did not have to manage potential resistant to change. Which either allows aconsiderable time gain and turns out be a real asset. 5.1.5. Conclusion In this case study, the conduct of change took place without difficulty. However, theemergence of complication occurred within months, years that followed.Indeed, from the outset, in everyday use, it was necessary to consult very frequently (severaltimes a week) the helpline to support the lack of skills of users to ensure a normal use of thesoftware. Moreover, it was also necessary to call the helpline to correct some application.The consequences of this change: - Loss of time - Frequent problems - Tension in the enterprise - Tensions between Alpha and the software provider - Incorrect information - Questioning the competence of the supplier of software - Reliability of the company affected by insurance companies It is difficult more than three years after this change to say what could have been thesolutions to be applied at that time in order to don‟t have to suffer the complicationsencountered since then. However, it is possible to determine the factors that will have to allow 69
  • 70. for the downgraded. Indeed, the application of certain key success factors presented in section4.4.2. “Keys success factors in change implementation of my research could allow toanticipate these problems, notably the key number 10, "Train and Coach" from b. Grouard &f. Meston (1995). If users of the software had all received full training to learn how to use it,the daily work of users would surely not been so penalized. Furthermore, once a new application is created or integrated in the business, it seemsnecessary and indispensable to control all the details of this application. This control couldthen have allow to avoid the mistakes of reporting and therefore funds errors.My intervention in this enterprise as apprentices and my ability to communicate with mybusiness managers, and developers of the software allowed me to manager these problemresolutions. Were now not protected from human error and fear the emergence of newproblems.One of the solutions envisaged by the motor of the development of this company, Denis (non-user of the software), will be to change the software. Its strategy, do it lonely… 5.2. Case Study two: French Company 5.2.1. Presentation of the case study Meeting with Mr A. R. , Operational Manager in a French Company. This firm is specialized in the manufacture of effervescent granulated powders sold assuch in bags or under the shape of tablets. If the work instrument of production of this enterprise 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. When the shareholder of this company has offered to improve the information systemmanagement of the firm, Mr R. has right away understood the possibility to change of IT. Theobjective being to move from archaic systems, to a modern one allowing then a simplificationof the tasks and productivity improvements. 70
  • 71. The role of Mr R. when leading this project has then been to build and manage itentirely. Right from the beginning, A. R. has included the key elements of the team by givingthem the sense of their responsibility and appropriates the project for themselves. Threepersons were concerned: the production manager, the quality manager and the commercialassistant. Mr R. asked them to organize altogether a meeting where they should think overwhat they would like to change and what they might wish to be settled. "Their reaction wasinstantaneous! A true envy, a real sense of responsibilities, and a genuine desire to be partand parcel in this project and make it their own." As and when the first report of this meeting was established, the team possessed atangible basis for working. As the team was working on its own, Mr R. played the role ofdecision-maker; he would then choose according to the suggestions formulated by the team incharge of the project. To realize this project, an informatics team joined the initial projectteam and perfectly integrate itself in its frame of mind.The project was built together with the achievement of synthesis documents which were eachtime more sophisticated in order to determine exactly the needs of the enterprise and build anoptimum solution. The settlement of this new system of information was quickly established,without any revolution nor nerve crisis, and the wished results were reached."I think that the success of our project rests above all on the spirit of mind that motivates us,that is to say: a real team. Everybody must play his role, feels at ease at his post and muchconcerned by the change." The delegation and the sense of responsibility of each one have proved to be essentialin the implementing change process and of course they are due to the capabilities of themanager leader. In all organization, all project management you need a leader who will beable to induce his team with him and take the decisions which will involve the organization. 5.2.2. Type and origin of change For this firm, the change of IT was a real organizational revolution. The goal of thischange was to make possible the replacement of different IT with a single solution systems.The requirements for this new IT was to consolidate all features necessary for the properfunctioning of the business and ensuring the traceability from orders to the end product. Thistype of change is characterized of discontinuous change. 71
  • 72. The characteristics of the discontinuous renewal perspective are revolution overevolution, disruptive innovation, creative destruction, radical pace of change, sudden break ofthe status quo, a stable and unstable possible of states and a punctuated equilibrium (De Witand Meyer, 2004, p.182). According to P. Daudi (2011), revolutionary change makes a clearbreak, has clear fracture with the past and its usual ways of thinking and doing.The motivation for change emerges from the shareholder. The old informational technologieswere working well, but were complex. So this change emerged from inside the firm, it was anendogenous change force who wanted to improve the IT. 5.2.3. Strategy and process of change Strategy The strategy adopted by the firm‟s shareholder was to mix top-down management anddown-up management. The shareholder perceived the need to improve the businessinformation systems to simplify and facilitate the process of management of the firm. In thiscontext, employees were directly impacted. To that aim, the shareholder has therefore decidedthe change (top-down management) and directly integrated the employees of the firm (Down-up management). ProcessAccording to the Lewin‟s theories, the shareholder in the first step of change unfreeze thecurrent situation by increasing the driving forces, offering development possibilities andadopting a participative management.For the second step, the Moving phase, employees understood quickly their interest inchanging IT systems. They had the opportunity to make the most of this situation. From thebeginning of the project, the shareholder used one of the levers presented by Lewin: “Workall together to find new perspectives”.Once the change has been implemented successfully by the employees and the help of aninformatics team, the Lewin‟s third step was simple to implement. “Refreezing the newsituation” was in fact, refreeze employees‟ job. 72
  • 73. 5.2.4. Rigidities management strategy To prevent rigidities to change, the shareholder of the firm used some of the keyssuccess factors presented in this research (4.4.2. Keys success in change implementation):Key 2: Creating the guiding coalition - Putting together a group with enough power to lead the change - Getting the group to work together like teamKey 3: Canalize - Define the structure of the projectKey 6: Mobilize - Create a dynamics of change near the employees - Ratify the stakes defined in the vision (project) - Define the main axes of improvement.Key 7: Organize the participation - Make sure of all concerned employees‟ participation, not only to enrich their vision but also to make its "concretisation" easier.Key 13: Manage the stakes of power - Redirect the relations of power to guarantee their coherence with the vision - Make it participate efficiently to the process of change. Furthermore, we can establish a relation with the shareholder‟s behaviour and Hersey&Al. theory of situational leadership. Indeed, the shareholder adopted a delegatingmanagement with A. R. He doesn‟t really encourage and support him, giving him theopportunity to show he had the ability to lead a project by himself and prove he could beconsidered a senior executive. This demonstrates the confidence of the shareholder to A. R. ,and it surely played an important role in this project. A. R. felt that a mission whose outcomedepend directly from his leadership abilities. 73
  • 74. 5.2.5. Conclusion The success of this change was made possible by an appropriate management. Theshareholder first decided change, convinced of the merits of this approach. The goal of thischange of IT had three main implications: - A single database for the company, and therefore increase the visibility and transparency of company managers and shareholder of this company. - Simplify the daily tasks of employees. This allowed, once the change has been completed, to free up some time for employees and enable them to focus on other tasks. - Free time, why? What goal?  Think about new developments. Implicitly, the shareholder has made what is called a change of culture of theorganization. Thus, the shareholder has activated the eighth lever described by John Kotter in"The Eight - State Process of Creating Major Change":Anchoring new approaches in the culture: - Creating better performance through customer - and productivity – oriented behaviour, more and better leadership, and more effective management - Articulating the connections between new behaviours and organizational success Developing means to ensure leadership development and successionConclusion: This is an example of leadership ! 5.3. Case Study three: Spanish subsidiary 5.3.1. Presentation of the case studyConversation with Mr G.L.J General Manager within a French Multinational.This subsidiary is a firm which produces and commercializes two kinds of magnesia: 74
  • 75. - Caustic magnesia for animal feeding, fertilizers and varied industrial uses such as pulps or flames retarding panels. - Fireproof Magnesia for iron and steel industry. This firm extracts its raw materials from its own mine then transforms them accordingto complex industrial processes before the commercialization of fully or semi-finishedproducts. Therefore this firm is depending on the natural resources of this mine. In 2007, a study of the soils meant to evaluate the capacity in raw material of the minerevealed that at the rhythm of the actual working, the lifespan of the enterprise would be of 9years. Within a few weeks an enormous organization was set up under the direction of MRG.L.J.“The first thought was a strategic one.” What must we do? Close the site at endterm? Envisage a strategic alliance? Sell our "know-how"? Could we find some more oresnear at hand? All hypotheses were then studied, analyzed and fully examined in totalimpartiality.” Considering the different strategic aspects (place of the leaders on the Europeanmarket, cutting in the Chinese exportations, etc...) and the project of research meant on thepossibility to open other mines having been well conducted and proved to be possible, itwas finally the strategy adopted by the company. A team was then formed to have the projectstepped forward. “On the whole, open-mindedness demands a considerable human energy.” The groupof study was composed for the greatest part, of engineers and members of the financial andlegal direction had to be organized in a very rigorous way in order to respect the time allowed,the procedures, as well as other regulations and environmental constraints. To realize thisproject, the role of G.L.J. has consisted in making the members of the team face their ownresponsibility, control the smooth running of the process on its whole, bring his support to theteam and most obviously take the decisions based on the formulated suggestions. The analyze of the ores of the new work site proved a superior quality whencompared to the one from the first mine .The very important prospects of need of magnesia inEurope as well as the industrial incapability in answering to this increasing demand (thereasons being : the limited capability of production, the age of the active equipment and other 75
  • 76. manufacture networks),all that made the managers conscious that their thought had not to beonly limited to the supplying of raw material. The productive equipment had to be optimized. Therefore, the direction had to answer that question:" What must we doto ensure the permanence of our enterprise but above all its global development? "“From that moment, my role was to launch various strategic thoughts by summoning up allthe resources of the firm and make them responsible masters of their destiny ". Thesedifferent reflections have been meant to determine what the products will be, for whichmarkets and in which quantities."Concerning my teams, these two last years have been absolutely exceptional .We made up atrue enterprise project that proved to be as federative as exiting ". The first project team which had been organized for mining subjects, was followed bytwo others: one to study the commercial side and the possible axes of development and thesecond having to concentrate on industrial sets of problems: think out the tomorrow plant..."It was inconceivable that these three teams should work independently". Starting from that,Mr G.L.J. has aimed to make these three teams work together .To make theseteams understand that they had a common objective has proved to be the key factor in thisimplementing change process.From Mr G.L.J s point of view ,the key factors which have allowed the success of this projectare as follows : - The ability to make teams face their responsibility by appropriating the subjects. - To have known to give time, to compel to respect the time allowed together with results, respecting of course the constraints of each one. - To have succeeding in letting skills and ideas be expressed, by pushing the teams to have confidence in themselves, be imaginative and rich in propositions. - To have known to reassure the teams not only as to the future and the potential of their enterprise but also as to the role they were now playing and that they will be playing in the future. Coming back to this last key factor, the objective to make each team to be confident initself was to make them project onto future and to allow these persons to feel their works werein danger and thus fearless recruit the real necessary skills that the enterprise needed. As to 76
  • 77. the recruitment, three very heavy potential key jobs were created: one mines engineer, anindustrial project manager and a purchase manager. Two new commercial directions of zone were created to accelerate the commercialdevelopment: South America and Pacific Asia .Besides, it was also the opportunity to set anew organization for the commercialization of caustic magnesias on a worldly scale.It, was quite something to find solutions for their enterprise, but it was something harder toconvince and "succeed in selling the project" to their shareholders. Although the shareholdersof this enterprise have the soul of enterprising developers, they neverthelessremain financiers. All the same, to invest 40 million euros in two years require someexplanations, guarantees of profitabilities and returns on investment. 5.3.2. Type and origin of change In this enterprise, change has emerged as a necessity. This type of change is regardedas a discontinuous change but do not generate the different characteristics developed by DeWit & Meyer (2004): evolution over revolution, disruptive innovation, creative destruction,radical pace of change, sudden break of the status quo has stable and unstable alternation ofstates and a punctuated equilibrium. And appears more like an evolution than a revolution.Indeed, the search for new mines in order first is a discontinuous change, the companyworked on a mine which began to be exploited in 1945. However, despite the fact that thechange is discontinuous, it is characterized by evolution over revolution. Indeed, such changesoccur as continuity in the life cycle of the firm. This change occurs in a context where the company suffers from an alteration of thoseresources in raw materials. It must therefore respond to its environment. The origin of thischange is due to an exogenous force of the company. 5.3.3. Strategy and process of change Strategy The strategy adopted by the shareholders was to mix top-down management anddown-up management. 77
  • 78. In the present case, the role of top-down management was evaluating "life expectancyof the mine" to anticipate the future. The results of this study have allowed the shareholder torealize their future. The down-up management. G.L.J. , General Manager in the French Multinationaldecided to integrate the managers of the Spanish subsidiary in the project of change. Theirmission: build the project, find new sites of exploitation, build an action plan, an investmentplan and create a business plan in order to propose and convince the shareholders. Process According to the Lewin‟s theories, the shareholders in the first step of change unfreezethe current situation by increasing the driving forces. To increase the driving forces, G.L.J.decided to play it straight: At the actual rhythm, in 9 years, in there is no solution, theenterprise should have to close.For the second step, the Moving phase, employees understood quickly their interest to findsolution. If there are no new mines, they should have to dismiss the 200 employees of the firmand find another job. They were master of their future and had the opportunity to make themost of this situation. From the beginning of the project, G.L.J. used one of the leverspresented by Lewin: “Work all together to find new perspectives”.The project has been build and all the requirements were complete (find new sites ofexploitation, action plan, investment plan, business plan). An investment plan of 40 millioneuros in two was presented, and compare with the business plan perspectives, the shareholdersaccepted to finance the change. Once the change has been implemented successfully by theparticipation of managers of the firm and the new employees (Mines engineer, industrialproject manager and a Purchase manager), the Lewin‟s third step has not been problematic,“Refreezing the new situation” was refreeze the project made by the employees of the firm. 5.3.4. Rigidities management strategy To manage and anticipate rigidities, G.L.J. expressed his strategy and the keys successfactors he used to decrease the resistant forces of the Lewin‟s theory, but unconsciously heused another key success factor previously presented in the theoretical framework: 78
  • 79. Key 1: Establishing a sense of urgency (Kotter – 1996) By playing it straight, establish the sense of urgency, and this factor acted as a drivingforce. 5.3.5. ConclusionThe difference between failure and success in implementing change in an organizationdepends highly on the people themselves (Ph DAUDI).The success of this change was made possible by an appropriate management and strategy.G.L.J. empowered the manager of the firm by giving them the opportunity to save theirenterprise. The keys success factor previously presented in the case study by G.L.J. and thelast one describe above had played a major role in the project of change and during the changeimplementation.This case study highlights the role of the leadership in change management and theimportance of the people within the firm. 79
  • 80. 5.4. Case study four: French Multinational 5.4.1. Presentation of the case studyConversation with C. Ramon, Information System Manager in the Groupe Roullier. This French multinational has a turnover of 2 milliards euros, employs more than 6000persons among which more than 50% work abroad in more than 60 countries.C. Ramon been working in this firm for roughly 20 years and started as a dataprocessing manager. During this interview, C. Ramon explained me one of his worst experience in changeprocess during his career in this firm. Few years ago, CEOs of the multinational had decidedto change its French IT, and therefore to shift from systems often mostly developed at hometo an ERP system. The stake was a thumping great one. To deal with this situation the firm recruited a project director specially well-trainedfor this kind of change, and made sure to be assisted by a consultant agency, as well for theanalyze their needs as for helping the company to manage the change for the chosen ERP. Several software programs have then been studied; together with a great number ofdays of consultancy entirely aimed to what should be the best choice.The software program was selected... And the project was launched ... and totally stopped after two long years during whichthe company went from failures to failures and also after having spent nearly 2 millioneuros...“What were the reasons ? They were at the same time simple and complex, human andtechnical”. After a few years the company has to admit that it all appears more obvious... At first, concerning the technical side ,the home software packages had beendeveloped and freely adapted by each line of work, sometimes leading to enormous deviationsin the systems of informations between the two companies. Each one wanted to keep its own specificities, refusing then to focus on the samestandard even when it was imposed by the ERP and not the other way round...even beingaware that some likely adaptations were unavoidable... 80
  • 81. But the main reason of this failure was a human reason. To have willed to impose choices bypeople from outside the firm has been an important mistake.The home teams have never appropriated the project. They basically lived through it as animposed event and their resistance to change has been almost automatic.The management felt itself rejected, even for instance in what concerned the financialmanagement .The administrative and financial managers who had almost not been integratedin the primary brainstorming sessions, have right away alerted and informed of the risk ...“Today it is obvious that we ought to have integrated them to the project of change.They could have acted as levers but instead, bit by bit, they changed into brakes.”People entirely disagreed with the project manager who found himself gradually isolated, thenwithdrew into himself and his convictions rather than playing his role of leader.“To draw a conclusion: in change management, one should never underestimate the role ofthe leader who should be carefully selected and make sure that he will know how to giveothers the deep desire to participate , to totally handle things in order to make the projectbecome a success.” 5.4.2. Type and origin of change For this French multinational, the change of IT was an organizational revolution. Thegoal of this change was to make possible the replacement of different IT with a single solutionsystems. The principal difficulty of this change was to develop an IT able to manage variousenterprise having different business trade. This type of change is characterized ofdiscontinuous change. As it was describe in the previous case study, he characteristics of the discontinuousrenewal perspective are revolution over evolution, disruptive innovation, creative destruction,radical pace of change, sudden break of the status quo, a stable and unstable possible of statesand a punctuated equilibrium (De Wit and Meyer, 2004, p.182). According to P. Daudi(2011), revolutionary change makes a clear break, has clear fracture with the past and its usualways of thinking and doing. The motivation for change emerges from CEOs of the multinational. The oldinformational technologies were working well, but this structure enables the holding to haveeasily access to the whole information. So because this change emerged from inside the firm,it was an endogenous change force who wanted to improve the IT. 81
  • 82. 5.4.3. Strategy and process of change Strategy In this case, it clearly appear that the strategy adopt by the CEO was a top-downmanagement. The CEO decided to employ a project manager and a consultant agency in orderto develop the future IT. This change was impacting all the French enterprises of themultinational group, and consequently all the employees. Process According to the Lewin‟s theories, this firm never over pass the first step of change:unfreezing the current situation. At no time the project manager of the firm attempt toincrease the driving forces to find the equilibrium between driving and resistant forces, on thecontrary, his change strategy has the result of increase the resistant forces. 5.4.4. Rigidities management strategy As I said previously, the project manager has to face to strong rigidities. And mostsurprising was the instance in which he tried to force change. As a result, rigidities increasedand employees have refused to make any concessions. 5.4.5. Conclusion As I did not take part by myself in this change project, I would like only to makecomments according to the information which had been transmitted to me.From my point of view, to impose change in all of the French firms of the multinational,without considering or engaging nor manager, no users of the using IT at this time, hasdirectly had a negative impact on the realization of the project.In this context, person not wished to consider the interest of change. And therefore, nobodymade the effort to try to consider the possibility of making concessions to reach a solution.The persons concerned by the change is only seen that they imposed their a revolution of theIT and their uses. 82
  • 83. The impact for the multinational has been an investment of EUR 2 million who finally provedto be a deadweight loss for the multinational, since the project was abandoned.I will end this case study with a citation of Albert Einstein: "A person who has nevercommitted error has never, innovated”. 83
  • 84. Chapter 6 : Conclusion In this final section, I will present emerging findings of my case study and theconcepts discussed in my research and that seem to me crucial in the conduct of change. Mycase study focusing on to SMEs or national implementations, these recommendations willfind more interesting in the context of management of proximity than in an internationalcontext. The change management is not an easy task. The research that Ive developed thanksto both a theoretical and empirical framework showed that the great difficulty of changemanagement was due to human behaviour. "Human behaviour" is a relatively broad term, inthis approach the goal is to demonstrate the importance of behaviour, both at the level of themanagers and of leading people through change. Of course, the four case study analysed in this Master Thesis will not allow me tomake any conclusions or theories that can be generalized. However, I hope that my commentswill find a useful in any way. Manage the change requires special skills, and is today one of the most complicatedtasks for leaders. My theoretical research as well as the different case study examined allowed me tohighlight the role of the leader in the conduct of change. Two case study showed that top-down management found its limits as a mix between top-down and down-up managementboosters on evidence-based optimizations. The success of implement change is thus directlydependent of the leaders of the company, or persons having the capacity to decide the changeand its application. Whether the change is one thing, have the ability to implement it isanother. According to my approach, one of the main strengths of the leader is its ability tocreate a favourable environment for the personal development of employees of the company(ref: Situational leadership - 4.5. Human factor Management, a leader‟s key success factor inthe process of change). The aim being to create a climate of trust mutual between the leaderand staff of the firm. Confidence is an "invisible social lubricant". This means that the trust isa real asset. The simplest example that illustrated this idea is friendship. With a close friend, atrust is created. We are listening to his advice, and giving him our support in case of need.Create a climate of confidence is a daily work and often takes time. Once this objective isachieved, it is necessary to cultivate it because confidence is fragile. In an environment or 84
  • 85. employees do not trust to the manager, he will face to important brakes when he decides thechange. In this context, the trust is a factor promoting the flexibility of a business, andtherefore its ability to change. Another factor highlighted in the case study presented in this Master Thesis is theimportance of participative management. Empowering employees, and make them master oftheir destiny is a technique proven in the cases presented. For any strategic changes, it isessential that the manager leader framework the change and define objectives. However, inorder to make the employees following the change, it is important to integrate them in thesolutions research. In this approach, the quality of leadership depends implicitly to his abilityto lead employees to make by themselves the solutions expected by the leader. The last point that seems to me essential is a phase of control. The bad experienceencountered during my apprentice will have taught me one main thing in the implementationof change, especially when working with external suppliers: control the functioning of thedesired application delivery. This observation may seem to be evident, however the presentedcase shows that this was not always the case. 85
  • 86. Literature ReviewAlexandre-Bailly F. & D. Bourgeois & J-P. Gruère & N. Raulet-Croset & C. Roland-Levy, 2009, « Comportements Humains et management » 3rd edition, Pearson Education,ISBN 9782744073977Atlas du Management –, M. and N. Nohria, 2000, “Cracking the code of change”. Harvard Business ReviewBeitler Michael A., 2003, “Strategic organizational change: a practitioner‟s guide formanagers en consultants” ; Practitioner Press International ; ISBN 0972606408Burke, W. W. (2002). “Organization change: Theory and practice”. Thousand OaksCartwright, Sue & Cooper, Cary L. , 1993, “The psychological impact of merger andacquisition on the individual: a study of building society managers” , Human Relation.Chemers Martin M. , 1997, “An Integrative Theory of Leadership”; Lawrence ErlbaumAssoc Inc ; ISBN 9780805826791Christensen CM, Marx M. & Stevenson H.H., October 2006, “The Tools of cooperation ofchange” ; Harvard Business ReviewCoch, L., and French, J. R. P., 1948. “Overcoming resistance to change”. Human Relations.A .DAHMANI - "Confidence and Management of Human Resources”Daudi Philippe & Lundgren Makael, 2009, “Leadership in Different Arenas – Leading forthe future” ; Verlag Dr. Müller ; ISBN 9783639166163 86
  • 87. Paul DAMASCENO – CadredeSanté.com - Wit B. & R. Mayer, 2004, “Strategy: Process, Content, Context--An InternationalPerspective” , South-Western College Pub; 3rd editionEisenbach R., Waston K. & Pillai R., 1999, “Transformational Leadership in the context ofOrganizational Change”; Journal Of Organizational Change Management; Vol. 12Elrod, P. David II & Donald D. Tippett. , July 2002, “The “Death valley” of change” ;Journal of Organizational Change Management.Hatch, M.J. & Schultz, M.S. , 2004, “Organizational Identity: A Reader” ; OxfordUniversity PressHersey, P. and Blanchard, K. H. , 1977, “The Management of Organizational Behavior” 3e,Upper Saddle River N. J.: Prentice Hall.INSEE - Larry E. & Virginia E. Schein, 1988, “Power and Organization Development:Mobilizing Power to Implement Change”; FT Press; ISBN 0201121859Greiner Larry E., 1972, “Evolution and Revolution as Organizations Grow” ; HarvardBusiness Review ; Vol. 50(4)Grouard B .& Meston F. – 1995 – “The enterprise on the move, be successful whileimplementing a change” - (Dunod-2nd edition)Hammer M., July-August, 1990, “Reengineering Work: Don‟t Automate, Obliterate,”Harvard Business Review. 87
  • 88. Hersey Paul, Blanchard Kenneth H., Johnson Dewey E., “Management of OrganizationalBehavior: Leading Human Resources”, Prentice Hall; 8th edition (October 3, 2000) ISBN978-0130175984Kavanagh Marie H. & Neal M. Ashkanasy, Feb 2006, “The Impact of Leadership andChange Management Strategy on Organizational Culture and Individual Acceptance ofChange during a Merger” ; British Journal of Management.Kaynak E. & R. S Basi, 2010, “Contextual Management: A global Perspective” ; Routlege ;1 edition; ISBN: 0789004194Kerber, K.W. & Buono, A.F. 2005, “Rethinking organizational change: Reframing thechallenge of change management”, Organization Development Journal.Kotter J., March-April 1995 & 1998, "Leading Change: Why Transformation Efforts Fail"by. Harvard Business Review.Kristonis A. – “Comparison of change theories” – International journal of scholarityacademic intellectual diversity – Volume 8 N°1 – 2004-2005Lawler III Edward E. & Christopher G. Worley, January 2006, “Reward Systems,Motivation and Organizational Change”, Center for Effective Organizations.Lewin K. , 1951, “ Field theory in social science”. D. Cartwright, Ed.McNamara C. “Basic Context for Organizational Change” ;( P. , 1981, “Managing a programming project” ; Prentice Hall IncNikkilä J. , 1994, “The environment of the administrative work. Towards a productive andattendant administration” (Hallintotyön ympäristö. Kohti tuloksellista ja palvelevaa hallintoa).Valtionhallinnon kehittämiskeskus. Helsinki: VAPK -kustannus. 88
  • 89. Porter, M.E. – “How Competitive Forces Shape Strategy”, Harvard business Review,March/April 1979Pullen A. and Linstead, 2005, “Organization and Identity” ; London: Routledge. ISBN0415322316Quinn Robert E. & Quinn Cameron, 1983, “Organizational Life Cycles and Shifting ofCriteria of Effectiveness: Some Preliminary Evidence” ; Management Science ; Vol. 29, No.1, pp. 33-51Robbins S. – 2002 – “Organizational Behaviour” - Prentice hall; 10editionRobbins Stephen P. &David A. De Cenzo, 2005, “Fundamentals Of Management”, PrenticeHall ; ISBN 9780131972957Ropo A. , 1989, “Leadership and Organizational Change” ; Acta Universitatis TamperensisSer. A ; vol. 280 ; ISBN 9514425472Service – Administration Française -, 2009 – “The corporate culture survival guide” – Revised edition. Jossey-Bass, USAStewart J. , 1991, “Managing change through training and development”, Kogan Page, ISBN0749404272Tushman M. & Romanelli E. , 1985, “Organizational Evolution: A metamorphosis modelof convergence and reorientation In L.L. Cummings and B. M. Straw (EDS)” ; Research inorganizational behaviour. 89
  • 90. Linnaeus University – a firm focus on quality and competenceOn 1 January 2010 Växjö University and the University of Kalmar merged to form Linnaeus University. This newuniversity is the product of a will to improve the quality, enhance the appeal and boost the development potential ofteaching and research, at the same time as it plays a prominent role in working closely together with local society.Linnaeus University offers an attractive knowledge environment characterised by high quality and a competitiveportfolio of skills.Linnaeus University is a modern, international university with the emphasis on the desire for knowledge, creativethinking and practical innovations. For us, the focus is on proximity to our students, but also on the world around usand the future ahead.Linnæus UniversitySE-391 82 Kalmar/SE-351 95 VäxjöTelefon 0772-28 80 00