Evaluating the Management of Change and Innovation in ABC Impex

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Introduction:

The intent of this paper is to critically analyze the technological change that took place in the company of ABC Impex. The framework used to analyze the change is the Kotter's 8 step model.

Organizational Change:

Schraeder and Self, 2008 state that change is a continuous process and organisations experience change on a regular basis. Sidorko, 2007 state that "changes have continues in response to, or indedd in anticipation of, technological advances, budgetary fluctuations, the need for greater collaboration in an increasingly competitive environment and shifting demands to name a few". Greenwood & Hinings, 1988 state that organization needs to survive and in order to do so they anticipate and adapt to these changes through strategies including organizational redesign. This adoption of strategies leads to the change in the culture of the organisation. Schraeder and Self, 2008 cite Collins, 2001 stating that organizations which fail to adapt or do not respond to the changes required in a timely fashion are prone to the risk of losing their market share to competitors, the further implications could be that they might lose key employees or lose the support of the shareholders and in extreme situations even demise. They have outlined two major challenges that the organisations face. The first would be to recognize the need for change and the second which is more significant is how to deploy strategies formulated to implement the changes recognised. They further add that one of the main reasons for the failures of the adaptation to change is that the managers in the organisations do not completely understand what is necessary in guiding their organisations through a period of change initiatives. If the change implementation is planned properly, then the chances of the failures are reduced a lot and it could also prevent the aftermaths of the failed change process such as reduced employee morale or diminished commitment. However, it is not impossible to effectively plan and manage the change process. There are various developed change strategies and the organisation leaders can use them to increase the likelihood of a successful change implementation.

AbC Impex:

The organisation chosen for this analysis is ABC Impex. ABC Impex is a very reputed whole selling firm that deals in the imports and exports of furnishing fabrics. The company has been established for over twenty five years now and enjoys a good reputation through its domestic market of India. The company's primary activity of business is buying furnishing fabrics from different countries and selling them in India, where it has a good dealer network of 200 retailers and sub-whole sellers. There were three very important departments in the company: The Warehouse, Sales department and the Sourcing department. The Sales department had a lot of sales executives who would travel all over India and book orders and collect payments from different retailers and sub whole-sellers in different cities. The sourcing department had executives who would source new designs and establish company's relations with the leading fabric manufacturers in different countries such as China, Spain and Turkey. The Warehouse of the company was located in Jaipur which also was headquarter of the company.

Background for the need of change:

The main issue the company was facing was the matching of the orders, supplies and stock. As mentioned earlier, the company had a number of sales executives travelling in different parts of the country to book orders. The sales executives were handed a file of the stock available before they left and the updates of the stock used to happen majorly by phones as that was the most accessible form of communication (mobiles) available to them. But still, it was not an instant process and required lot of time, effort and paperwork. In addition, if a sales team booked an order in one city, the stock was updated between them and the warehouse in a couple of hours but the warehouse had to co-ordinate again with the other sales team. This was very chaotic and not an efficient practice.

Also, the same process used to happen between the warehouse and the executives that were travelling in different countries.

Solution implemented to sort the issue:

The senior managers realised that this issue was major hurdle for them to convert from a small-medium size organization to an efficient large organisation. The senior managers decided to seek the solutions available for the issue and since software technology had now become efficient and accessible in India, the company decided to incorporate the stock and order software which is especially designed for firms in this industry and all major whole sellers were implementing the same solution. In this case, the software was to be installed in the warehouse of the company and the sales teams were to carry the PDA phones which also had this software installed. The system seemed easy to implement and was expected to smooth out the operations and reduce a lot of effort and time required by the warehouse to deal the situation. However, the change process wasn't as easy and it took almost a year for the change to be implemented. The technological change wasn't accepted as easily in the initial stages by the sales executives and the employees at the warehouse and it took almost a year for them to use the technology to it's maximum benefit. The aim of the paper is to provide insights to the change process and the efforts of the senior managers to overcome this resistance. The paper stresses on understanding the resistance to change by the executives and the employees of ABC Impex. In the latter part, recommendations have been written for ABC Impex to implement if any other change process is to be implemented in the structure of the organisation.

Resistance to Change:

Del Val, 2003 state that a very important component of planning the strategy of the implementation of a change process is to realise the possible factors of the resistance by the employees to change. Maurer, 1996 has defined resistance as "a force that slows or stops movement". Kotter, 1995 states that resistance is an obstacle in the structure of the organization that prevents change. Schraeder and Self, 2008 have outlined few domains of resistance to change namely personal factors, organizational factors and change-specific factors. In regards to personal attributes the individual may have characteristics of low tolerance to change or the individuals refuse to change simply because of the uncertainty of the future and the fear of the unknown. The second domain which is the organisational factors for resistance could be the perceived credibility of the organisation or the track record of the organisation related to change. The third domain of resistance is the change process which is to be implemented. Some employees of the organisation might think that the process which will be implemented is flawed; their degree of resistance will be higher than that of the people who might think that the process which is to be implemented is logical and reasonable. There are other factors as well which could lead to the resistance of change such as if the individuals face a direct impact to change and they are not included in the change process; they might offer resistance to the process (Mink, 1992 as cited by Schraeder and Self, 2008). Other factor can be when the employees do not understand or lack clarity of the change process; they might offer resistance.

According to Overton, (2005) many change management theories follow a linear approach which sometimes over simplifies the complex issue. She further states that a change process can be incremental or transformational in a business and that there a quite a few leadership styles that work behind the change success.

Kotter's 8 step model:

Kotter, 1996 elaborated his model of change in 'Leading change'. Sidorko, 2008 states that Kotter's model is one such model that insists and emphasizes on a logical sequence of action that can assist with successful organisational change. The model highlights eight reasons why the change process fails or to say in other words if the organisation implements the 8 steps in the logical sequence, then the possibility of the failure of the change process is diminished. Kotter, 2007 states that "Leaders who successfully transform business do 8 things right (and they do them in the right order)". Sidorko has further classified these eight steps into three divisions namely preparing for change, action and grounding.

1.) Establish a sense of urgency:

Armstrong 2006, has reviewed kotter's 8 step model and says that establishing a sense of urgency is realised by examining market and competitive realities and by identifying and discussing crisis or potential crisis or major opportunities if any. Sidorko, 2008 state that the urgency for change is established from the factors that are necessitating the change. These could either be internal or external factors which have been identified by the existing firm.

The senior management at ABC realised that a change in their system of operations was necessary in order for them to grow in business. Hence the ABC Impex did not delay in addressing the issue and realised the need for technological innovation required in the company operations. These were the internal factors that the company was sorting out after reviewing the auditor's report. All in all, it can be said that the sense of urgency was established.

2.) Form a powerful guiding coalition:

Armstrong, 2006 states that forming a powerful guiding coalition is important and a group with enough power should be assembled to lead the effort and also strategies should be formulated in order to implement the changes. This is the second step of Kotter's model and ABC Impex failed at the very second step. The change was driven by the top management but it was unclear who exactly was leading the change effort. In fact, the whole initial process of introduction of the technology was scattered between people. So, there was no team formulated to oversee the change process and the senior managers did not realise the importance of the need of a proper team to lead the change process. The only step the senior management took was to hire a team of professionals for the initial training of the employees at the warehouse. The rest of the employees were unclear to exactly whom to look to in case of a doubt. According to Kotter, 2007 when just a few people are not supported by a larger population, then their efforts to implement the change are lost. He also stresses on the need for the major players to get involved in the process.

3.) Creating a vision:

The third step of the kotter's 8 step is to create a vision which would help direct the change effort and to develop strategies to achieve that mission (Armstrong, 2006). The management had a vision as to why they needed the change and basically the change was a result of the vision. Or, in other words we can say that the change implemented was one of the supplements to achieve the vision of the company.

4.) Communicating the Vision:

Armstrong, 2006 stresses on this step and insists that the vision should be communicated using every vehicle possible. This is another step where ABC Impex failed as the vision that the senior management had was not communicated among the employees or the sales executives of the company. In fact, the executives just felt that the company was upgrading technologically. They had no clue why the technology was upgraded and what the company wanted to achieve through it. The technological innovation also required a change in culture and change in the behaviour of the employees. This is crucial in any change process as the need for change 'understood' can only be implemented when the actions and mindset supports it.

5.) Empowering others to act on the vision:

This would mean that all the obstacles that were in the way to achieve a successful change process had to be removed. In ABC Impex this was not the case. Overton, L. (2005) states that people shy away from change particularly when we are asked to alter what we've been doing and enjoying for years. Executives or employees who could easily adapt change were using the technology whereas the other staff who were in the company for long time and did not want to alter their habits or the way of doing things for long time chose not to use the technology at all and still communicated with the warehouse by phones. Now, the technology was implemented and some people were using it and some were not. So the change process could not have been successful as the communication of information was being done by the old system as well as with the new system. This was getting more chaotic. Kotter, 2007 states that everybody should work together to make the change process a success else if you keep those who refuse to change then the whole process would fail. Quinn, (2002) writes after his interview with Kotter cites his belief that though business strategy, organizational structure and systems play a role in any change process, they are all secondary to the most primary factor or the most important of all factors which is changing people's behaviour.

6.) Planning for and creating short term wins:

The Company did not plan initially the short term wins or rewards. Since, there was no motivation to look onto to something for bringing in a change; those who wanted to do the things they had been doing did not bother to use the technology. After a period of six months, when the company again looked into the matter as in why the change process wasn't successful, they realised this as a major step and then introduced incentives for the successful use of technology. After this time, everybody was using the technology but before this everyone was doing the things as they wanted to do.

7.) Consolidating improvements and producing still more change:

In the case of ABC Impex, the change project was not implemented successfully initially so there was a lot of scope of improvement and the company had realized that they had failed to bring in the change successfully and so they knew they had to form a strategy and make as much improvements as they could. Kotter, 2007 states that the change process takes time and people loose momentum and they need to be appreciated and congratulated when they display their capability of successfully implementing change.

8.) Institutionalizing new approaches:

The management at ABC Impex had realised the need of new strategies to implement change and had introduced incentives for the employees who would implement the change successfully. The company also saw to it that they communicated what they wanted from the employees successfully through conferences, emails and meetings.

Conclusions:

After viewing the change process from the perspective of Kotter's 8 step process of change I have identified some gaps that were there while the change process was implemented. The company had successfully completed the first step as a sense of urgency was established. It is clear that the firm did not establish the importance of forming a team to oversee the successful implementation of the change process. If it would have been done, a lot of time and effort would have been saved and the energies could have been directed towards a quick implementation of the technological advancement. The management had a vision for the company but where it lacked was the fourth step where the vision should have been communicated right through the organisation so the need to adapt change would have been established. The process failed in the fifth step as well where not everybody was responding to the change initiated and according to Kotter this is the main reason why the change processes fail. The company though late, recognised that establishing short term wins was necessary and after it initiated strategies for implementation of the process, it seemed all the employees were more responsive towards the acceptance of the process.

Recommendations:

According to Smith, 2005 the role of people in achieving is central to Kotter's framework. This would highlight the fact that it is people who are an essential factor in achieving success in a change process and also they are the biggest obstacles to change. This establishes the fact that the managers need to focus on the people side of the organizational change.

I would recommend ABC Impex for future change processes that they need to impart more importance to the process of change. They need to establish the fact that just by buying technology the change is not implemented. they need to form a team of change implementing managers who should have considerate amount of power and should involve all the people in the change process. The vision after for which the change is implemented should be communicated throughout the organisation so that the need for the change is established. Just imposing change will not solve issues. Lastly, I would recommend ABC Impex to realize the fact that the change is a never ending process and in today's dynamic environment the speed of change is increasing even faster. The pace at which the technology or product change, it becomes very important for any organisation to be ready for the change processes and plan in advance the strategy they are going to implement in the future.

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