The Changes Experienced In Previous Employment Commerce Essay

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In this assay, a System Integration company's process improvement initiative would be depicted at first. Although the company finally appeared to achieve its objective, its processes and performance were not really improved. In order to understanding the reasons causing the gaps, we applied three models to evaluate this case. In addition, some critical reasons which we assumed would be analyzed further. At the same time, we attempt to suggest some possible improvements in the discussion by referencing academic literatures. In the end, we concluded that the change theories actually support our experience of change and could give us a comprehensive understanding of how to introducing a change initiative.

Case of Change initiative

Belonging to MiTAC/SYNNEX Group (NYSE: SNX), MiTAC Inc., founded in 1974, is one of the biggest systems integration companies in Taiwan. In the last couple of decades, MiTAC has participated in and implemented many important systems integration projects such as the Taiwan national tax system, the Taipei MRT and Taiwan Highway fare collection, traffic control systems, the flight message handling system, etc. Due to highly intensive competition, MiTAC sought to improve its processes and the quality of service. CMMI is one of such approaches that may help MiTAC to upgrade its business (MiTAC, 2010).

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Capability Maturity Model Integration (CMMI), maintained by Software Engineering Institute of Carnegie Mellon University, is an approach for organisations to improve their processes firstly and performance finally. According to their various scales and needs, organisations can apply it to facilitate integrations of organisational functions, setting goals and priorities, guidance of quality and so on across different levels, such as a single project, a portfolio, a department, and even the whole organisation (SEI, 2010). CMMI has been adopted by a wide range of companies, such as Accenture, Ericsson, IBM, JPMorgan, US DOD, etc. (SEI, 2007), mostly in high-tech industry and government.

There are many forces pushing MiTAC to adopt CMMI. The strongest one might come from the government because the sales of public sector account for over 50% of MiTAC's revenue. To improve the quality of projects implemented by suppliers, the government was also aware of the importance of setting recognized criteria. CMMI was considered a silver bullet at the time. More and more government's contracts demand that the contractor have to own at least CMMI level2 certificate (Lee and Wu, 2007). A growing awareness of CMMI also encourages other customers in the private sector to check the qualification of the contractors before they decided which one would implement their projects, even though they do not really understand what the approach is (Huang et al., 2006).

For increasing the chance of winning the contracts, within the organisation, the sales department and the marketing department started to urge senior management of MITAC to introduce the new approach. Until MiTAC gets the certificate, the sales department would tend to attribute its failure that is being beaten by competitors having it to the fact. The CEO, of course, did not want to see this situation happen.

The objective of this change initiative seemed to be quite obvious for MiTAC's management. The Instead of quality or extent of performance, the predefined levels of CMMI were regarded as objective. Five levels are clearly defined in this approach (SEI, 2010). From bottom to up, they are Initial, Managed, Defined, Quantitative Managed and Optimizing. Because it is not necessary for organisations to adopt it from the lowest level, considering its own current maturity, MiTAC decide to set the level 3 (Defined) as its objective. According to the definition (SEI, 2010), the level 3 (Defined) requires companies to maintain the consistency of their process performance by defining, standardizing and documenting these "AS-IS" processes.

Although the CMMI provides some guidance about what processes the company should implement and improve, it does not deal with how to achieve that. To solving this problem, the Software Engineering Institute (SEI) co-operates with external consulting firms (Staples et al., 2007). These consulting firms are authorized by the SEI for consulting and evaluating companies who are willing to introduce the CMMI. MiTAC also employed an India consulting firm, QAI India Limited, to help this work. The project team was composed of QAI's consultants, functional managers from each department, and top management due to the fact that MiTAC hope to apply it to the whole company. Except for consultants, all members in the project team were asked to attend a series of training program held by QAI.

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According to consultants' experiences, it might take about fifteen months for their clients to climb from one level to next higher level. After two-week discussion, the project team decided to set a fifteen-month schedule and 7 checkpoints/milestones (i.e. one milestone for every two months). MiTAC had to prepare all needed documents which required by processes before the date of each checkpoint. Then, QAI would send their auditors to audit these documents to ensure that MiTAC had followed the requirement of CMMI.

Like what was used in other MiTAC's projects, a top-down, company-wide conference was held to announce this change by top management. In addition, several announcements were posted in the bulletin board as an official mean. Apart from these, each manager was responsible for communicating what rules should be followed. The method of communication depended on each manager's characteristics and workload. Some managers, especially from engineering departments, just told their subordinates that all things they had to do were due to the company's policies and that they also did not like these things.

An interesting point is that although the internal forces from sales and marketing departments were strongest, the heaviest workload of adopting the CMMI was put on the engineering departments. Owing to the features of its industry, during the whole service lifetime, one or more complicated processes would be applied to deliver its service with numerous documents. Without the CMMI, the engineering departments' project managers could follow their original customs to produce some rubbish documents no matter what actually were written and whether they were useful or not. With the CMMI, they thought that they had to spend more time to produce more rubbish than ever before.

Because the performance of following the requirements was an important measurement to everyone, some employees who may not have enough professional skills to do their work well but were good at paperwork could have more opportunities to be promoted by their supervisors who were struggling against the CMMI. The majority of employees did not resist this change project explicitly but implicitly. Sometimes, the project managers of customers' projects would tell their supervisors that the customer's project may be badly delayed if they spend time following the CMMI's requirements. Under the pressure of punishment for delay, employees almost were told to skip the time-consuming, critical contents and just keep it having some necessary headings. And, if the documents required by the CMMI are vital for passing the appraisal, senior management would promise to allocate more people to help their works.

In Nov 2007, following fourteen months of intensive works, MiTAC was finally appraised at the level 3 by QAI. The CEO of MiTAC stated that the next objective of MiTAC would be to continue to move forward to the level 4 or level 5 (MiTAC, 2007). However, since it got the level 3 certificate, all works have been done by the old methods. Employees may just feel a huge surge of relief from the change project temporarily. Lastly, MiTAC achieved the objective which it set in the beginning successfully. However, it is doubtful whether it really improved its processes and performances.

Theories and Models

Just as Beer and Nohria (2000) said in their article "Cracking the code of change", seventy per cent of all change projects fail. In fact, the failure rate of all IT-related projects is at least as much as this figure (Lewis, 2001). In order to lower the failure rate, we have to critically assess the case above and learn from it by combining past experience with knowledge.

Beer and Nohria (2000)'s study showed that change initiatives could be compared along a model with two archetypes (Theory E and Theory O) and six dimensions (Goals, Leadership, Focus, Process, Reward System and Use of Consultants). After evaluating the MiTAC case, we could describe its change project as follows:

(Source: Beer and Nohria (2000:137)

According to the above form, almost all dimensions of MiTAC's change project applied theory E (which emphasizes economic value) except for Use of Consultants. Beer and Nohria thought that if companies want to change successfully, they have to balance the two theories simultaneously and carefully. It seems that the change project was heavily biased towards the theory E and neglected to develop soft factors such as corporate culture, trust, commitment and communication (Beer and Nohria, 2000).

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Beer et al. (1994) thought managers could achieve the change task through a sequence of six steps "critical path" and the timing is most important for the management of change. That means some change actions are appropriate only under certain specific order. These six steps are (Beer et al., 1994):

Using this six steps as model, we could find that in MiTAC's case, the step five started too early because it have not even neither developed a shared vision nor foster consensus for that. This situation may cause that employees resist the change project. Moreover, the change project did not diagnose the internal problems but just wanted to obtain the certificate.

In Kotter (2007)'s research of why change initiatives fail, he suggested another eight steps model implementing the change project to avoid some big errors that even very capable managers could make (Kotter, 2007:61):

By using Kotter's steps to analysing the case, we discovered several errors due to skip some vital steps or pay less attention to them. These errors are lacking a clear vision, not communicating effectively, not cleaning obstacles, declaring victory too soon, and not connecting changes with the company's culture (Kotter, 2007).

Next, according to the analysis above, three particular issues which we thought are critical for this initiative would be discussed further in detail.

Issues/Discussion

Vision/Objective

In Barsoux et al.'s case of leading organisational change (2007), firstly the target organisation understood that its primary objective was to improve the performance of its whole process. However, after it assigned the major change leaders, the actual objective started to shift to only half part of the process due to the limitation of leaders' background and experience. Even though there were significant improvements in its proposed metrics, the final performance still did not have obvious difference (Barsoux et al., 2007). The similar situation also could be found in MiTAC's case. In fact, CMMI level 3 was not its real objective but only a certificate. A piece of paper (certificate) may fulfil the sales and marketing departments' hope and be beneficial to winning new contracts, but did not add value or improve its processes and performance at all. If employees or even management did not realize the objective behind the change project, they were likely to resist the change or just do some superficial works (Campbell and Alexander, 1997).

Organisational structure

MiTAC's matrix organisational structure also influenced the introduction of the change project. As Carnall (2007) stated, it may be difficult to build a good working relationship between project and functional management in the matrix structure even though this structure has advantage of flexibility. McKenna and Beech (2008) also mentioned that the managers' responsibility is one of the matrix organisation's challenges. In this case, MiTAC's change project leaders were all functional managers, who have power to allocate, promote and punish human resources. Nevertheless, the project managers in the front line had to be responsible for failures of their own projects. Some conflict of interests existed in this circumstance. If the top management cannot clarify functional managers and project managers' roles and responsibilities in the change project and failed to establish clear game rules which they can follow, it was unlikely to align everyone's action with the company's objective (Bartlett and Ghoshal, 1990).

Resistance/Communication

Is CMMI really nothing but a piece of paper? Why the majority of MiTAC's employees resisted the change project implicitly? Kegan and Lahey (2001) thought sometimes people do not really resist change but apply their energy toward "competing commitment" which resulting in immunity to change. Kegan and Lahey suggested that by uncovering competing commitments and by examining and questioning the big assumption behind the commitments, managers could find out the real reason why employees won't change and solve it. Kim and Maugorgne (2003) also proposed a four-step process (also four hurdles ) to explain how leaders achieve quick, drastic and lasting change. They thought that the most difficult thing is to let people understand the causes of problems and the need for change, otherwise they will resist change. Kim and Maugorgne concluded an approach from Bill Bratton's case, which is putting people face-to-face with problems and using new methods to communicate (Kim and Mauborgne, 2003).

Both of above theories encourage managers to find out the real reason behind the problems and adopt another perspective to persuade these people. In MiTAC's case, the "competing commitment" may be "I am committed to maintaining the original working habits" and the "big assumption" may be "I assume I will increase my workload and produce more rubbish if I follow the CMMI requirements." The biggest mistake which the change leaders made may be that they did not let employees understand the value of this change project and how this project could benefit their day-to-day works rather than a large amount of paperwork. As the way Kotter and Schlesinger sugguested (1979), managers could pick some problems which employees usually encounter as examples and then tell them what implication of the CMMI requirements could provide a way of dealing with these problems exactly and that it may increase the short-term workload but also could largely increase the quality of services and decrease their future cost of maintenance. That could help employees "break through the cognitive hurdle."(Kim and Mauborgne, 2003:62; Kegan and Lahey, 2001)

Conclusion

Although many scholars have proposed their own theories or models of change, we still could discover the similarity among their concepts. By using these theories to analyse the case, we concluded that the change project was heavily biased towards the economic value and neglected to develop soft factors such as corporate culture, trust, commitment and communication. Without trust and proper communication, establishing formal policies, system or structure may produce an opposite effect on the change project.

We assumed three critical reasons affecting MiTAC's management of change: no sustainable improvement caused by lacking of clear objective, vague responsibility caused by matrix structure and resistance caused by ineffective communication.

Going through the process of analysing the case, we believed that the change theories actually support our experience of change. Even though no "one best way" to manage organizational change (Burnes, 1996:11), these theories still could give us a comprehensive understanding of how to introducing a change initiative and avoid some obvious errors.