A case study of Success Change Management in Manufacturing

ABSTRACT

 

STUDENT NAME                                 

DEGREE                                            

DISSERTATION SUPERVISOR   

DISSERTATION TITLE                         A case study of Success Change Management in Manufacturing

DATE                                                  1-April-2007

KEYWORDS                                        Change Management

 

Sometimes companies may be unaware that they are making any assumptions about the nature of change, the nature of the organization, or the implication of the intervention being made in terms of the theory of motivation. It will require the involved individuals to identify such assumptions and consider how far that may affect the conclusions drawn about the outcome of the change program. Change management must be planned carefully by managers in an organization, most importantly by the senior management. The vital importance of change management in today’s competitive climate has been widely investigated.  Many organizations have undertaken the business process reengineering projects to reorganize one or more part of their operations.  This thesis results from a case study of ABC Company, a large Hong Kong Toys manufacturing company, to improve the inventory level and effective the production cycle time in order to enhance the company’s performance. A radical change management process was designed by ABC Company and they focus on a major change in the Supply Chain System. It was an immediate success and reenergized the company through the implementation stage. Lessons can be learnt from the way the process was initiated and developed, the approach to the implementation of the new process and the resistance of the change. 

 

 

1.  Introduction

 

The focus of this research study is to provide appropriate information regarding the concept of change management and its resistance within the organization as it gives emphasis to the ABC company for investigation of pints and findings for the purpose of realizing its processes involved as the company are coming to grips with change management problems and for more experienced management teams who desire to reflect upon their experience in a structured way. There is also discussion and analysis of such change theories and studies involved on change and the resistance to change that is to utilized and describe in the process of further exploring of concepts and ideas within its justification upon using it. Thus, there must be showing of relevant literature having a reasonable range of resource materials and publication such as in books, peer reviewed journal articles and magazines so that issues will be addressed properly that will flow logically from the issues and themes to be discussed comprising of the integral part for the realization of the assignment’s purpose and gives a detailed a statement of the topic involving management of change and its resistance respectively.

 

1.1        Reason for choice of topic

 

Manufacturing companies constantly face pressures to change. Significant decreases in revenues and profits, forecasts of changing economic conditions, consumer purchasing patterns, technological and scientific factors, and competition, both foreign and domestic, can force top management to evaluate their organization and consider significant changes. 

 

 

 

Our case illustrated the applicable of a change process for the selected organization; the selected manufacturing company applied the Supply Chain System for over a year and as a result it improved the inventory level and effective the production cycle time in order to enhance the company’s performance. Although they have followed the integrated organizational change model approach that will be mentioned in the next chapter are quite successful, however, based on our research data, a lot of change resistance occurred during the implementation stage, which is related to the company cultural issues that the company needs to address are also important to prioritize as their long term business strategy.

 

Being a member of the Supply Chain Department in the selected company, it is a good chance to understand the details of the company background, the need of change, the change process and the resistance of change by working on this research.  The final draw and the conclusion of this thesis will help both of the individual and organization in further development.

 

1.2        Academic objectives of dissertation

 

The objectives of this research are:

-      Review the literature of Change Management;

-      Review the Change Process;

-      Provide study result to prove the change enhance the company performance;

-      High-light the resistance of the process;

-      Recommendations to the company for further change development.

 

 

 

1.3        Outline of chapters

 

More and more Hong Kong Manufacturing Company facing the pressure on change, it is a hot topic for discussion recently.  In Chapter 1, we have a general introduction on the why change management was selected as the topic of this thesis.  In the next chapter, we have briefly reviewed different change management approaches, the advantages and disadvantages of each approach, explain which approach was being selected to apply on our case.  In Chapter 3, the research method that was used in our study will briefly be discussed, to elaborate the different between the Qualitative research and the Quantitative research, and explain why a case study is the most preferable research method compare to the others.  The explorations of the research bias and limitations were also included in this chapter.  In Chapter 4, we have a clear description on the case study, to analyze the collected data and follow with the final findings.  In Chapter 5, we have provided some recommendations for the selected company on how they can monitor the change process and address the change resistance in order to maximize the company advantage.

 

2.  Literature Review on Change Management:

 

 

Change is the process of going from one state to another as for example, when ABC company brings in a systems analyst to model the existing structure, ABC is likely wanted a new supply chain system to be implemented, thus creating change in embracing it, creating massive change in companies across the globe. Moreover, it could be a reality that ABC will be resisting certain changes in lieu to its workforce, as for ABC change can be a negative indicator as the company will change its system and employees or staff might feel that their jobs are being threatened for instance, through the implementation of certain supply chain process and a good change management is crucial for the company from such unplanned changes in the business.

 

The present review of the change literature will focus on three important process-oriented perspectives, which illustrate significantly different conceptualization of how change affects organizations:

 

(1)        The change is typified by certain patterns that affect organizations similarly (1958;  1987);

(2)        The organizations are challenged to maintain their entities and identities throughout a transition ( 1987;1993); and

(3)        The change affects the individuals within an organization more fundamentally than it does the organization as a whole (1986; 1990).

 

 

 

Each perspective is described below.

 

2.1.      Patterns in the change process

 

 (1958) presents a fundamental description of change that has been incorporated into many organizational consultants’ and managers’ emergent models ( 1977) of organizations in their attempts to understand and direct the process of systemic change.  Lewin’s perspective describes three basic steps that are inherent in any change process. The first stage he called “unfreezing”.  It involved overcoming inertia and taking apart the existing “mind set”. Defense mechanisms have to be bypassed. An example of this unfreezing would be a series of management training sessions in which the need for change is incontrovertibly revealed.  The second step is called movement and involves taking action to change the organization’s social system (1978) from its original level of behavior or operation to a new level. This is typically a period of confusion.  We are aware that the old ways are being challenged but we do not have a clear picture to replace them with yet.  Finally, the third step is called “refreezing”. This involves establishing a process that ensures the new levels of behavior will be relatively secure against reversion to prior modes of operation.

 

 (1987) provides an example of a contemporary approach to organizational change that develops from Lewin’s three-stage process.  For him, unfreezing is the process of creating motivation and readiness for change.  In general, there are three ways of accomplishing this:

 

·         Disconfirmation, when members of the organization experience a need for change which, in turn, motivates them to embrace change;

·         Induction of guilt or anxiety involving the establishment of a perceived gap between what is not currently working well and a desired future state; and

·         Creation of psychological safety, providing an environment in which people feel safe enough to experience disconfirmation and induction.

 

The second step for  is changing, which is similar to the movement in Lewin’s model.  This is the process of helping people to see things differently and react differently in the future.  Changing can be achieved by identification with a new role model, boss or consultant, which enables one to see things from another’s viewpoint, or by scanning the environment for new and relevant information.  The third step, refreezing, involves integrating the change process through personal refreezing, which involves taking the new, changed way of doing things and fitting it comfortably into one’s total self-concept, and relational refreezing which involves successfully integrating the new behavior in interactions with significant others.

 

2.2.      Challenges to organizational identity

 

 and  (1987) focus on the importance of the transition state through which the organization must navigate in order to evolve from its “present state” to its “desired future state”.  Members of an organization first realize their dissatisfaction with the current state and then identify a desired future state, thus describing the new role, function, or structure that the organization needs to adopt.  To manage this transition effectively,  and  recommend creating a transition management team (TMT) composed of leaders who are respected by the organization and have wisdom, objectivity and effective interpersonal skills.  This team must also have the resources and power to manage the change process.    and  further recommend “activity planning” as a mechanism for creating a detailed road map of all the tasks that must be accomplished during the transition state in order to achieve the desired future state.   (1993) expands on  and  approach, highlighting the dynamic nature of change and the importance of an effective transition management team composed of people who report directly to the top management and can commit all their time and effort to managing the change process.  

 

 

From  perspective, for successful change to occur it is critical for the TMT to manage the “dynamic” view of change, not just the individual pieces of it.  The highlight of this process is effectively communicating, throughout the whole organization, the new work processes that will define the changed organization.  In addition, the transition management team must be responsible for managing the emotional connections that are essential for the successful completion of any transformation ( 1983).

 

2.3        Impacts on individuals

 

The third set of approaches to change concerns the experiences of individuals in the change process.  (1990) and  (1986) focus on the psychological adjustment that individual members of an organization must make during change.  These authors magnify a frequently overlooked aspect of organizational change – the impact on the individual.  presents a three-part individual transition process that accompanies Lewin’s three stages of change.  The first stage involves letting go of one’s old situation and identity. For example, a manager who is being encouraged to develop a more participative climate in her work group may have to accept the loss of the more control, which she may have worked hard over a number of years to secure, if she is to be successful. The second stage is described as the “neutral zone”, where organizational members move through a period of contradiction as they search for a new framework and identity that they can use to establish themselves in the changing organization.  Following  (1969), Bridges state that the “new beginning or final stage of transition” cannot occur until the various losses experienced in the first two stages are acknowledged, accepted, and resolved.

 

 

 

 

2.4        Integration of change process models

 

Each of the theoretical frameworks briefly described above focuses our thinking about organizational change from the broader, general patterns of change that affect the organization as a whole, down to the difficult psychological adjustment individual members of the organization must make during the actual implementation process.  Taken alone or together, however, these three perspectives do not provide a comprehensive or integrated understanding of the organizational change process that is useful for managers who find themselves in the position of planning or implementing change.  The Managing Change model (1988; 1990; 1991, 1993) offers just such a perspective (see Figure 1).  This framework integrates the strengths of the theoretical perspectives presented above and incorporates important issues involved in evaluating the overall effectiveness of the change process.  The model consists of the following dimensions:

 

·         Individual response to change: concerning the nature, prevalence, and utility of resistance to change.

·         The general nature of change: concerning whether effective large system change is evolutionary or revolutionary in nature and the characteristic patterns that stand for the change efforts in organizations.

·         Planning change: concerning the causes of change in organizations, connection of the vision, how to get from the present to the future, and barriers to effective transitions.

·         Managing the people side of change: concerning how, when and how much to communicate about the change within the organization, and psychological issues related to transition.

·         Managing the organizational side of change: concerning the design and structural issues of systemic and long-term change efforts.

·         Evaluating the change effort: concerning indicators of a change effort’s effectiveness.

 

 

 

2.5        Change resistance – organizational culture

 

When organizations form for a period they typically settle into patterns of behaving, thinking and relating.  Habits grow up around such elements as: how do things get done?  How to relate to authority?  Who socializes with whom?  How do informal communication networks operate?  How is influence exerted?  How are successes and failures dealt with…?  These patterns become the organization’s “unwritten rules” and they constitute what we would call the “atmosphere” in an organization.  Individuals who change organization or department notice the difference between working in one situation and another.  This difference is often intangible and hard to describe.  It is partly about atmosphere and mostly about established traditions around the important issues of working and relating.  Informal rules are in places which help keep the group “unique” and help the survival of the team or group. 

 

 

 

When new members join an organization they are socialized into the organization’s patterns of behaving and thinking.  The new member learns the ropes and learns how to get on in the organization.  A group’s tradition is handed on from generation to generation, so that after a while the organization is unaware that these “rules” exist and are influencing them. These deeply embedded assumptions constitute the organization’s culture (1992).  When it comes to issues of change, the deeply embedded traditions and assumptions which are held by the members of the organization play a key role in how change is facilitated or resisted.

 

Anyone attempting to bring about change in an organization which is well-established must take the elements of that organization’s culture and norm into account and attempt to maintain them or facilitate the organization to understand how the culture and norm are blocking potentially beneficial change (1987).  Then, the organization can go about creating new norms once the limitations of the existing norms have been identified and agreed on.  Enforcing change which breaks up the organization’s culture and breaks what holds the organization together invites resistance. 

 

The ABC management is basically responsible for whatever change programs the company is undertaking. There are times when change is slow and is not taking in areas where it is needed. This could be considered as a human resource function (2003), but senior management also plays a role. The senior management must therefore look into such situations and take appropriate action. For ABC Company, change management is an important aspect of the organization and their mission is to ensure that changes made to the production environment are tracked, reviewed, tested, communicated, implemented and validated; reducing/eliminating negative impacts to the business. The forces of global competition have sent shock waves that have left very few organizations untouched ( 2001).

 

 

 

Survival in today’s world demands that organizations develop the capabilities to compete on many fronts: speed, cost, quality, service, technology, innovation, knowledge management, and new products, to name a few. Increasingly, the only sustainable competitive advantage is the ability to organize effectively, respond to change, and manage well ( 2003). The element of change is inescapable and it is most unwise for any business to ignore it. The pervasive nature of change affecting so many aspects of the business scene has suggested the observation that the only permanent element in the environment of business is change. Of particular importance are perhaps the changes related to the following factors: automation, science, electronic data processing, simulation and models and many other factors related to production, distribution and economy. The simplest idea of change is probably the incremental model (2004), and should be what ABC company must follow.

 

Here, the shift is a change in process, perhaps associated with implementing changes. Devolving a plan of action for such change underpins many different planned change schemas. They often involve steps which are offered to the prospective manager of change and relate quite well to problem solving schemas, too. A typical example of such a schematic change model would be as follows: (1) develop a strategy, (2) confirm top level support, (3) use project management support, and (4) communicate results ( 2004). It might seem so simple, but in reality it isn’t. Each step requires other sub-steps which have to be efficiently dealt in order for the change to be successful. The content of the change process is identified by large by the senior management. If such a change process developed by senior management has a good chance of proving itself well-founded, it is still not enough on its own to build the strategy of change ( 2002).

 

 

 

Analysis of change programs and plans must therefore be pushed to its conclusion. This is done partly in order to find and identify other priorities that may exist, but also and above all in order to draw up the reasoning on the levers to be used in order to change the strategy of the actors, including that of the most powerful of these. Different organizations would benefit from different change strategies. Whatever the change strategy the organization chose to undertake, there are important elements for success of such change that are uniform throughout any organization. This would include the readiness of a company, leadership and management, support of the employees, clear communications, and careful planning.

 

After reviewed the four change management approaches, we believe that the integrated change process model is the most effective way to manage the organizational change, but, it is not efficient to influence all of the individual to adopt the change within a short period of time, to reduce the change resistance is a long-term process which is mainly affiliated to each organization’s imbedded cultural background. 

 

In our case study of ABC Company, the integrated change process model was being used and they have gained the immediate success through the implementation stage. However, as mentioned that the change resistance occurred and cannot be fixed within a short period even though ABC Company understand the importance of the need to address this issue at the process design stage.  Further change and cultural development are preferred to carry on for ABC Company as a long-term business strategy in the next couple of years to overcome the raised change resistance. For ABC company, there needs to have behavior for utilizing research study as it will involve the change process and the related information regarding the social change theory and its aspects that may result to a certain resistance to change such as in the field of social communication and how to manage change and strategies to avoid resistance to change in terms of social perspectives within a business and or a company’s context as well as point of view.

 

 

 

Thus, any theory that purports to explain how these systems work and how oppressive social inequalities are maintained must not be so framed as to imply that those who benefit from them are not free to change them. Otherwise, ABC would not be morally culpable for their part in perpetuating the system. The problem involved a kind of change responsibility and resistance level problems, in order to avoid this problem any explanation of how process of social change are supported in a way that implies that both those who benefit and those who are responsible for challenging and resisting such sources of change.

 

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