Risks Related To Change Management In Shell Business Essay
Published: Mon, 5 Dec 2016
In the very beginning it is already mentioned in the finding of this report about the factors which cause resistance to change. The two major reasons apparently identified for resistance to change are the fear of losing the job status and job security. The mentality of an individual varies accordingly and there are multiple factors which influence the human thinking. Attitude towards change is a similar example of this and not everyone take it positively. Fear of losing here refers to the risk of carrying out the change process unsuccessfully. The moral of the individuals could go low if the results of the change are unsuccessful and the individuals are mainly scared of failure so they don’t want to experiment new things which acts as a barrier to change. Another major reason found which resists change was the job security and the job status of the employees. Here the fear is that the individual could lose their strong position and command due to change being adopted and most of the employees in the organization are not really keen to risk their status or job itself. As far as literature is concerned on this topic Lewin’s (1940) views were in support of this research, he presented his views on resistance to change linked to the human behavior which was also the case at shell, the staff resisted when the idea was presented to implement SAP over JD Edwards. Besides that the findings can also be related with the research of Schermerhorn, Hunt, and Osborn (2005) who said that the individuals resist change to protect their interests and also to defend the elements which are valuable to them, findings in this research present a similar picture as it can be concluded from the research that individuals resist change mainly because of fear of losing and protecting their job and job status. Eight step reasons identified by Schermerhorn, Hunt, and Osborn (2005) are also very similar to all the reasons for resistance to change mentioned in the findings section.
Coch & French (1948) also researched on this topic and their research was conducted in Virginia in a Harwood, manufacturing company, their findings suggests that the individual’s lack of interest in the change process and no participation from their side is the major cause of resistance to change. Somehow there is a disagreement with his concept on this as the findings above do not include any such factor of lack of interest or participation in the list of resistance to change. His work was also challenged by Lawrence (1954) and he said that the findings of Coch and French were misleading as they were away from the reality in their research. He then suggested a list of reasons why people resist change, that list is mentioned in the literature review section and again a disagreement on his concept as his reasons given were also close to the findings above. The most important reason suggested by Lawrence was that people resist change because the outcome is unknown to them and the other major reason given was that there is a lack of trust amongst staff and thus they resist change and this reason was also mentioned in the findings so the idea of Lawrence on resistance to change is in support of this research .
5.2-Models for dealing with resistance to change
There are many models which have been suggested by different scholars to deal with the resistance to change. Kotter & Schlesingers six step model is widely accepted in the industry besides that Lewins 3 stage model is very popular as well. Few other models for dealing with resistance covered in the research are force field analysis, Greminis 4 R’s, Greniers Organisational growth for organisational learning etc. However after conducting the research and surveying in the industry and getting feedback from individuals from different organisations, it can be concluded that the Kotter six steps and Lewins three stage model of unfreezing, change and refreezing are the most accepted and understood models for change used in the organisation. These two models cover all the important aspects which are normally required in an organisation when dealing with change. Discussion has been made in the findings on the concepts of organisational learning and organisational growth and the Greniers model for organisational growth since these topics are no different from the subject of change management. The findings from the research conducted in Barclays and Reckitt Benckiser is in support of Kotter idea of managing resistance, the commonly found resistance in both the companies is usually managed by one of six steps presented by Kotter or sometimes multiple steps could be used to deal with resistance.
5.3-Business Process Re-engineering
The topic has been covered in the literature review since the case study of Shell is an example of business process re-engineering. BPR usually involves radical redesigning of a process in terms of cost, quality, speed or service to improve the conditions dramatically within no time, the BPR process also requires fundamental rethinking of the ways operations are carried out in an organisation. Shell desired to change its ERP system JD Edwards and implemented SAP over it in order to standardize its process and remove complexities, this could be termed as an example of BPR. The primary findings of this research can be related to the literature presented by Hammer and Champy, and Wenrich and Ahmed, they felt that the concept of BPR is usually linked to the ERP implementation and the case in Shell was one example of this. Besides that this concept is also supported by the idea of Chan and Peel who conducted their research on this topic in many different companies and their findings suggests that the main reason for BPR is improving on the organisational efficiency in operations and also raising the level of customer service. Shell implemented the BPR to increase its efficiency.
5.4-Risks related to change management in Shell
There are various risks related to the transformation process in Shell which have been identified in the findings section, the major ones being the reputational risk, high project cost and desired results not being achieved. As Shell is a big name in the global market and holds a respectable reputation in the industry so failure to carry out this process would have damaged the reputation of the organisation and as the investment was of more than 100 billion euros so the level of risk went higher with the massive cost. Primary findings of this report are more close to the views presented by Butterworth-Heinemann, as he has described the risks related to the system changeover in his research and the risks covered by him are very similar to findings above. He has only focused on the risks related to the system changeover and the common risks identified in the findings above and his research are data conversion, user acceptance of change, system interfaces and integration and end user involvement. So in comparison to Proscis concept discussed above, it is clear that Butterworths idea of risks faced in change management is more agreeable as the literature is more similar to the research above. On the other hand Proscis view on risks is more general and related to the specific project and the organization as a whole. The risks identified by him are more general like the customer and supplier view, resistance in general, budgeting issues, negative impact, stress, conflicts and misunderstandings amongst staff, etc, it is not specifically linked to the system changeover so the primary findings are in more support of Butterworths work over Proscis concept
5.5-Change Process at Shell
Shell transformed its ERP JD Edwards to SAP as discussed above, and the primary reason being to increase the efficiency and to standardize the global policies. The reasons for the change have already been discussed above and to sum up, the major factors which pushed Shell towards the change were simplification of processes and make the use of latest technology. The change at Shell would be classified as a planned change, various views have come in front regarding planned change but the most attractive view on the topic was presented by Burke & George Latwin, and Kotter. Burke & George presented a model in which the change was classified as transactional or transformational. The change adopted in Shell could be termed as transactional change, as the fundamentals of the organisation remained same and only some features of the company changed. Another scholar making sense is Kotters, he presented his ideas on planned change in the eight steps model and all of the components in that model are all completely linked to the heart of the organisation and are specifically focused on the concept of change. The other theories discussed in the literature review are mostly the example of incremental change which is the change applied in steps, and after conducting the research on the types of change it was found that Quinn concept seemed appropriate, he suggested that the incremental change was leading to a slow death while the radical change headed towards irreversible transformation. The change at Shell was not an incremental change. In Shell Pakistan the change was implemented in formal steps and a proper procedure was being used which has been discussed above in the findings. At the end of the research it was found that the process of change in Shell was much organised as the management conducted surveys, authorities and responsibilities were very clearly defined and they made the use of a change agent who initiated the process and pushed the others to follow it. The change at Shell in terms of organisational level was an example of operational change. This can said since the operational change talks about the concepts of BPR, TQM, continuous improvements, JIT etc, and all these were considered at Shell during the transformation stage. Pettigrew differentiated the types of change and said in his research that the operational level change are taken at a small score and are not important in the organisation. I firmly disagree with his ideas and feel that the operational level change is equally as important as change at any other level. The change in Shell was an operational level change but it was very much required and wasn’t a small scale project since a massive investment was made, the findings suggest that the change implemented was very effective and the organisation succeeded in achieving their goal.
From the findings above it can be concluded that the employees in Shell Pakistan were not very satisfied with the performance of JD Edwards as an ERP. The feedback was taken through a questionnaire completed by them to find out how they feel about the system and to summarize their views in a nut shell they did not feel that JD Edwards was a flexible enough tool for the product reconciliations and it they also felt that it was not the ideal system which could be used for reporting purposes. Rowena Hawksley had a different view about the system and She said it is a valuable system for the business to use for Asset lifecycle management, inventory control, supply chain execution, manufacturing and engineering purposes etc, but a disagreement is reached from his ideas as the findings in this report on Shell differs from the views presented.
With regards to ERP many scholars have presented their views and few of them have also been covered in my literature review, ERP was best described by Gale, he viewed ERP as an important tool for business to manage operations, which will integrate used in Shell Pakistan during the implementation of SAP. According to Richard Goekey and Robert Faley the SAP implementation in chemical and Pharmaceutical industry has not been very successful in terms of inventory management in the organisation, it can not be agreed as the implementation of SAP in organisation from any industry has resulted in dramatic turnarounds and even in Shell the results obtained after the SAP implementation has been positive and the objectives were achieved. Duplagia and Astani said that the integration between functional areas and information system is the primary reason for companies implementing ERP, the same was the case at Shell as the organisation planned to standardise its processes so implemented ERP, therefore the views of Duplagia and Astani could be related to the research conducted above.
5.8- Effectiveness of SAP implementation
SAP implementation has been successful in Shell Pakistan and the results obtained have been positive. The moral level of the users has improved and the implementation has resulted in cost saving and reducing complexities in the organisation. Suzanne Gaut, presented a best practice approach for the SAP implementation, the approach was split into two major categories defined as the key individual required in the SAP implementation and the important elements needed in the implementation stage. The details have been discussed above and the best practice support was pretty much followed in Shell Pakistan during the implementation of SAP. Suzanne focused on the fact that the project manager, users of the system, maintenance member, account member, etc should all be involved and participate during the implementation phase to get the desired results. The findings of this report suggests that yes Shell had most of its key members involved during the implementation and the survey undertaken describes the attitude of staff towards of change, it says that most of the members were open to change and welcomed the idea of SAP implementation.
The line managers were assigned responsibilities in Shell for the SAP implementation and the staffs expressed their satisfaction with their performance and accepted that the managers fulfilled their responsibilities properly and also were keen to provide training and transfer knowledge on the project in order to help the group as a whole and make this project successful. The other part of the practice suggested by Suzanne was including important elements required in the SAP implementation. Few of the important elements were aim and objectives of the project, people expectations, purchasing, operational, financial and contracting strategies, and computer based training etc. Again the case at Shell seemed to be following all these instructions and the management got all the important procedures completed before and during the implementation. The change agent appointed by Shell helped in carrying out the process and helped in selling the idea of change and recorded the vital steps to be understood and carried out. At Shell the control methods were in place to protect the data loss and only authorise individuals were granted access. The use of multiple passwords of ten digits each was made to maintain the integrity. Results obtained in Shell post implementation of SAP were better and the issues of product traceability, reconciliations and flexibility were resolved which was not the case when JD Edwards was in use. The views of Suzanne Gaut are more related to the implementation process carried out in Shell, most of the points presented by Suzanne have been covered by Shell during the implementation.
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