The Aims Of Introducing Strategic Change
This paper aims to introduce Strategic Change theoretical background in the business practice, highlighting strategic change tools and models utilized in Corus Strip Products UK (CSP), an operating division of CORUS. The change approaches herein described are critically evaluated on where and how they have been effective within the study case context.
1. Context for Change
The concept of strategy becomes known from the mission of the organisations in general and it can be defined differently according to several schools of thought. We can introduce it as the direction of all sort of organisations which raise the questions on how they grow, innovate and how they change (Johnson, Scholes, and Richard, 2009). Accordingly to a recent global survey by McKinsey and Company (2008), they concluded that 'Organisations need to change constantly' in response to internal and external influences to their business - driving forces. This is the reason why their operation in multiple environments creates extensive changes in the business, resulting from globalization, development of new technologies, legislations and the current intensification of market competition (Biloslavo and Friedl, 2009). As a result, these organisations get involved on strategic change programmes entailing development and implementation of new strategies, structures and working methods introducing new management techniques and tools which in turn lead them to examine and change internal aspects such as leadership and management styles, team working, reward systems, performance management and their culture in order to improve their business success (Graham, 2010).
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In 2005, CSP UK introduced a cultural plan for change - "The Journey" which was meant to look at 'people's way of doing things' contributing to the sustainability of their business. The Journey focused on values and beliefs of stakeholders, including employees, contractors, suppliers and partners. This Journey plan was supported with drivers for change and these were identified as the inefficiencies within the business. For illustration purposes see the listing in the following table.
New competitors - higher rivalry with lower cost in production;
Change on costumers requirements - substitutes replacing CORUS products;
Change on costumer expectations - higher expectation due to technology developments;
Negative perception of the industry regarding the environmental agenda;
Poor delivery on time;
Current low competitiveness - product low price;
High wastage - failing in producing right first time;
Low staff morale - low motivation of employees within their work environment;
Health &Safety issues;
[Source: CORUS Case study]
Table 1 - CSP UK Triggers for Change
Although is not detailed the starting point for change in the case study, Schein cited in Graham (2010) defends that 'disconfirmation' whatever its source, functions as a primary driving force. However it leads to either accept the status quo or change the current situation. This concept is very much based in Kurt Lewin's change theory - driving and restraining forces (Schein, 1996). Although disconfirmation may be a start for change process in the organisation, it is not enough to trigger change, though it can be ignored, dismissed as irrelevant or denied its validity (Graham, 2010). This context leads to what Balogun and Hailey (2004) highlight about how change occurs in organisations, which is through 'a continuous process of adjustment with the organisation's environment and a process of "punctuated equilibrium" where small changes take place periodically interspersed with radical changes.'
The above author also defends that change is very much within people and not in the organisations itself, thus change is a result of how people change their way of doing business (Balogun, 2001). These changes require overall understanding of those involved in this exercise. Therefore, the challenge is to understand the difference between the current state and the uncertain future. Thus issues of capabilities, skills, creativity and innovation are primary concerns for many managers that struggle to keep their organisation at the forefront of their industry and the market. Awareness of changes is very important in the current environments to efficiently accommodate them.
2. Change in CSP UK
To cope with this complexity and uncertainty of change, Pettigrew and Whipp cited in Burnes (2004) maintain that organisations need to become open learning systems, with strategy development and change emerging from the way the company as a whole acquires, interprets and processes information about its environment, therefore responding opportunistically.
CSP UK required a major change and 'Corus employees were encouraged to understand what was happening in the business'. Change agents rather than controlling employees, they have to make employees understand the need for change instead of directing and controlling change which may in turn become unsuccessfully. Thus, there is the need to identify the critical range of factors that must be taken into account when planning and implementing change, in particular in the CSP UK business environment. These factors are normally qualified as the restraining forces or barriers to change: people's current abilities, experience, customs and practices that may not be aligned to the requirements of the new strategic change. The employees may feel they loose influence in the business, as a reduction or limitation of their status and power, leading to further job dissatisfaction and lower productivity. These factors emerge from employees' fear of uncertainty, translated by a perception of a potential threat to their jobs or by addition of new resources due to current ageing workforce in the company (i.e. layoffs or job roles redesign). For these reasons, change agents must have the necessary skills, diligence and power to endeavor the change process. Wilson cited in Burnes (2004) agrees that to effectively attempt change, managers must not only accept the way they perceive and interpret the need for change, but they also have to pass the message across to everyone else in the organisation.
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In CSP UK the approach used to overcome the above factors, in the case study described as barriers, was to work closely with the employees to get them involved as much as possible in the change programme. This meant to share with the employees the business forecast in case of no taking any change. The employees were also led to take ownership of the new values in order to get their buy in to the change programme, adjusting them to the new ways of working - group dynamics, enabling them to contribute and gain recognition. Also, various channels of communication were used (i.e. newsletters, workshops, etc) to get across the continuous idea about what was required from the stakeholders. In addition, some sort of exercises were implemented to make employees feel embarrass regarding company's current presentation and operational attitude that was requiring change.
According to Burnes citing Pettigrew and Whipp (2004), there are four key factors that direct influence the complex task of change:
readiness of key players to implement the change process;
degree of information utilized by change managers to convert ideals, assumptions and beliefs;
extent to internal and external environmental issues are recognized;
structural and cultural characteristics of the organisation or people within it.
As per above we can conclude that managers are seen as facilitators rather then doers, thus change requires managers to 'facilitate an open and organisation-wide communication via groups, individuals, and formal and informal channels' (Burnes et. al, 2004).
3. The tools and models in the CSP UK
Accordingly to Rigby cited in Biloslavo and Friedl (2009), a research study including 451 world companies recognized that methods of change depend very much on the organisation's situation, therefore the change success depends on the organisation's operating environment, type of organisation, current phase in the organisation's life cycle, culture of the organisation and style of leadership (Nohria and Rigby cited in Biloslavo and Friedl, 2009).
The above summarises what strategic change is by Huczynski and Buchanan (2007, p.592):
'â€¦an organisational transformation that is radical, frame breaking, mould breaking or paradigmatic in its nature and implicationsâ€¦the term strategic denotes scale, magnitude or depth. Deciding on whether it is strategic or not, depends on organisational circumstances'.
Although there is an extensive literature about different tools and models referred above as methods, there are limited scientific research studies to advise on suitable methods for cases in particular (Cesnovar cited Biloslavo and Friedl, 2009). Some relevant methods to the case study are introduced in the remainder of this document.
Balogun (2001) defends that change can differentiated by the speed of change, as the way change it is implemented and that it ranges from a continuous process, or a radical to a step-by-step as an incremental type of change. In CSP UK is more about a continuous process that looks at an adaptation within the existing way of doing things incorporating the continuity of the past keeping pace with the changing environment to actually implement change through time. Burnes (2004) supports that continuous process, if the environment in organisations change, it will continue to change rapidly, radically and unpredictably, therefore continuous change enable organisations to be aligned with their business environment. The incremental change model differs from the continuous model by the way change takes place, by a series of small "steps". It also tends to be implemented in periods when the industry is in equilibrium with focus on doing things better rather than differently, i.e. transformational change (Graham, 2010). Balogun (2001) stresses that transformational change is the transformation in the way people behave and think about their work and this is a change in culture and culture here is to do with shared assumptions and beliefs of CSP UK employees. This transformation change is therefore implicit in our case.
On the other hand, the planned approach also used in this case study, deals with change as an outcome of multiple causes, therefore not a single tool or model can be used, especially in large organisations. (Lewin cited in Graham, 2010). That is the case of CSP UK that has previously used the Total Quality Management (TQM) tool to improve productivity and competitiveness. The TQM incorporates a principal of continual improvement and this may have resulted in this new change. However, we have no evidences if this new change is under the TQM umbrella. In addition, TQM forces change in culture, which is completely the opposite of the evidences found in the case study.
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In contrast, to the previous tool the company has used, the current Journey plan sis using the Force Field Analysis (Kurt Lewin) as a change tool. This tool is useful for looking at all the forces for and against a plan (i.e. drivers and barriers). This exercise helps to weight the importance of these factors and decide whether a plan is worth implementing. Other tools such as Cultural Web (Johnson and Scholes) and 7S Framework could also be applied. The Cultural Web facilitates in identifying that the existing culture becomes inappropriate and hinders rather than supports progress with an active participation of stakeholders. This tool is useful to expose cultural assumptions and practices. Similarly, 7S model helps to identify where the gaps and inconsistencies are between its 7 elements.
When change is taken from one fixe state to another, is when the planned approach is considered and its change can be previously planned by understanding the 'force field' of organisational environment. Thus, Burnes supports the approach as being suitable to stable environments and very much dependent on change managers. This is vey much the case of the stakeholders this case study and how managers have approached the barriers to change.
The change process in CSP UK is very challenging and requires a lot of effort from change agents and from the employees. The change plan is designed to achieve a successful change, however the rate to what success is measured may vary according to the participation and effort of those individuals that form the organisation and how they actively participate in the change process. As a result, the success tends to be perceived and measured along the time and milestones were set to get to know the achievement of targets allowing the review and measurement of progress. Actually, the case study shows that key performance indicators have shown significant progress.
In the current economic climate CSP UK is thriving and this is due to the appropriate use of tools and models change managers have made available in order to achieve external adaptation and internal integration. Conditions for successful change were created and the change management at CSP UK involved the stakeholders in the overall process to effective deliver change.
The suitability of such methods is key to successfully implement change, otherwise it may lead to over-use of resources, reduction in the financial capabilities, deterioration in the work climate and in some instances the company ruin (Kotter cited Biloslavo and Friedl, 2009).
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