Table of Content
Assignment Description
Executive Summary
Introduction
Brief Company Profile
Diagnosis of the Case
External Change Driver
Internal Change Driver
Current Scenario
Sources of Resistance
Style of Leadership/Management
Prognosis for the Case
No Change Scenario
Proposed Change Strategy
Key Issues for Implementation of Change Program
Conclusion
Bibliography
References
Assignment Description
Prepare a report for senior management of an organization of your choice acting as a consultant commenting on an organizational change process.
Your report should be constructed to address the following aspects:
Diagnosis
- External change drivers
- Internal change drivers
- ‘Current state’
- Sources of resistance
- Styles of leadership/management
Prognosis
Use scenario planning to envisage two alternative future states:
- A no change scenario if organization continues on current path
- A change scenario achieved through organizational development
Conclusion
- Identify key issues a change programme will need to address.
Executive Summary
This assignment discusses and analyzes a specific company, which encountered a variety of problems, in relation to the changes that happened in its internal and external environments. A brief profile of the company would be provided, including the general issues and problems that the company faced. The evaluation and analysis of the organizational change process of the company would be done by using the different tools of analysis.
The company chosen for this analysis is PCCW Limited, which is regarded as the leading company in Hong Kong and in all of Asia that provides communications services and information technologies. This is because this company plays an important role in the development and improvement of telecommunications in Hong Kong, being regarded as the leading information and communications hub in the Asian Pacific region[1]. As such, this paper would prepare a report for senior management of the company, with the researcher acting as a consultant for the management of its organization change process.
Introduction
Given the many changes brought about by the environment, technology, economy, politics, and society, changes in the organization must be taken note of in order to cope up with the changing demands of the employees and the consumers. In this output-oriented society and generation, every organization must have the skills, capabilities, endurance, and the strategies to be able to meet the demands and the needs of their market. As such, the continuous changes that organizations must undergo may be considered as their only edge in order to cope with the overall changes observed in the society. Thus, appropriate change management must be done in a company to effectively and efficiently facilitate and govern the changes needed by organizations.
Brief Company Profile
As mentioned, PCCW Limited is the largest telecommunication company in Hong Kong and is one of Asia’s leading competitors in Information and Communication Technologies (ICT). The company contributes in enhancing the image of Hong Kong as a center of technology and business superiority, with its outstanding innovation, especially in terms of IP-based business services, New Generation Fixed Line services, broadband pay-TV, Internet access, media content, large-scale IT solutions, mobility, and wireless innovations[2]. However, it experienced some problems, concerns, and issues lately, which prompted the company to undergo necessary changes that are perceived to be advantageous on its part. Its problems commenced when PCCW Limited offered Cable and Wireless PCCW stock with US billion in bank loans, as many residents in Hong Kong are stockholders in the company, and with the purchase, the company’s stock price was reduced by 96% in 2003, from its peak in 2000. In 2003, Cable and Wireless (C&W) finished paying in all the stock from the 14.7% stake it had, which amounted to US billion at the time, and produced only .9 billion of sales in the end. Due to this, Richard Li resigned as the company’s CEO and agreed to sell his indirectly held 22.66% shares in the company for a total of HK.16 billion[3].
In the intent of PCCW for market expansion, protect its position, and create strategic agreements with other Asian companies, it has borrowed greatly to finance the billion bid for Hong Kong Telecom, which resulted to its debt of US billion. Further decline of its performance is brought about by its lack of confidence in the debt repayment plans among stockholders[4], which contributed to its standing as the worst performing blue-chip company on the list of the Hong Kong Stock Exchange in 2002 and 2003[5]. In addition to its debt and change in ownership and management are the increasing pressures of competition among the industry. It has been reported that in August 2000, there were 165 external telecommunications services operators and 187 Internet market service providers. The increase in competition led to another cause of the company’s problems, which is the existence of monopoly for domestic fixed telephony. This became a major blow for the company, as many telephone operators no longer need the gateways and local networks provided by PCCW[6].
Moreover, another cause of its problems is the reduction of its staffs and workforce, which contribute to the decline of its operations. An additional cause is the failure of the bid between the company and China, for at the time, China resisted to make negotiations with a company that is connected to the Singapore government, which also became the cause of the problems of the Sing Tel’s bid in the past[7].
Furthermore, the problem for the company is the overall failing revenues in Hong Kong, with its failure to make significant progress to the China mainland. With this, heavy investment in infrastructure throughout East Asia must be needed before the full potential of PCCW can be appreciated[8].
Diagnosis of the Case
External Change Driver
The PEST Analysis sets up an effective investigation of the external impacts on a specific company by breaking the components into essential and noticeable elements or factors. The noticeable elements under this type of analysis include Political, Economic, Sociological, and Technological elements.
Political – Political factors include the restrictions in the policies of the Chinese government with regards to company negotiations and mergers; the government’s choice of companies outside the country, with which it would make negotiations with; distinct superiority in China’s legal system; influence of British legal system in Hong Kong’s international financial transactions
Economic – Economic elements include the development and underdevelopment of infrastructures in East Asia; telecommunications monopoly; debt of PCCW; dollar inflation and deflation rates; financial crises; collapse of asset prices; rate of economic growth
Sociological – Sociological factors include PCCW’s conflict with consumers that are major stockholders; unemployment; changes in communication, marketing and management; retaining distinct superiority over human resources, language, competition and rivalry
Technological – effects of e-commerce to PCCW; development and improvement of its website; utilization and maximization of the Internet; faster negotiations, development of new high-tech tools, enhancement of R&D through the Internet
Internal Change Driver
One of the internal change drivers of PCCW is the change in its ownership, along with the change in its management and its organizational culture. The culture was then changed with the change in the workforce. After the acquisition, most of the staffs working in C&W HKT are now employees in PCCW. This led to the change in the culture of the company, from a conservative, seniority-based, and non-market driven, it turned to a strongly competitive, performance-based, and customer-focused company. Another internal driver is the change in the company’s priority. The quality of service is now the company’s primary concern, and the company has been investing millions of dollars in quality and customer service training. The third internal driver is the change in internal processes. Such changes in internal processes include implementing different quality programs, including quality improvement teams and six sigma programs. These changes in the culture of the company brought about the company’s restructuring process, such as changing the divisions from a cost-center to a profit-center, thus, making all employees motivated to make negotiations and transactions[9].
Current Scenario
Based on the situation of the company, it can be regarded as having a theoretical model of Revolution, as discussed by Greiner (1972). According to the author, the term revolution is used to describe those periods of substantial turmoil in organizational life, or turbulent times, wherein a serious upheaval of management practices can be observed. In addition, traditional management practices, which were appropriate for a smaller size and earlier time, are brought under scrutiny by both top and lower-level managers[10]. In this sense, the changes undergone by PCCW can be considered indicators that the company is undergoing “Crisis of Red Tape” which is the revolution stage between phase 4 & 5 in the following graphic of Greiner. As indicated by its internal change drivers, the changes in its internal processes, culture, and priorities were brought about the combination of the two separate companies.
In line with the company’s agenda for change, several aspects in the organization can be taken note of, namely, its strategy, structure, processes, and people. In relation to its strategy, PCCW provides solutions for port management, security and CCTV systems, audio and visual solutions, and technical support and maintenance services to various sectors in the industry, such as governments, public services, aviation, and broadcast engineering operations. In addition, it re-entered the mobile market, collaborated with real estate and broadband companies, and improved its telephone directories. In terms of structure, the contribution of its large team of professionals, experiences and knowledge in the IT industry provide excellent ICT solutions that would help customers develop innovative and challenging business opportunities. In terms of processes, the company facilitates outstanding innovation, especially in terms of IP-based business services, New Generation Fixed Line services, broadband pay-TV, Internet access, media content, large-scale IT solutions, mobility, and wireless innovations. In terms of people, it has approximately 17,000 employees, located in different parts of the globe, including mainland China, South America, Japan, Korea, Thailand, Malaysia, Singapore, Taiwan, Europe, the United States, India, and the Middle East[11].
Sources of Resistance
The sources for the resistance to change of the employees of PCCW are the different internal drivers of change, which include change in ownership, change in management and organizational culture, change in the workforce, change in priorities, and change in internal processes.
There is an observed resistance to changes in the part of the employees and the managers due to personal impacts, such in relation to changes in relationships with new employees. Another rationale for the resistance to change is the self-interests of the employees, which would not be given priority due to the changes in the structure and policies in the company. Comfort with one’s status quo would also be a source of resistance, along with the loss of power and control over situations in the organization due to the presence of new employees, managers, and leaders. Loss of jobs can also be a cause of resistance, along with the lack of confidence with regards to current skills and competencies that would hinder an employee to perform effectively in the organization.
Due to the employees’ resistance to proposed changes, they might not support the new policies and strategies imposed by the organization, leading to different dilemmas and conflicts within and outside the organization. This lack of support would make some employees to ignore or stop the proposed changes, thus, delaying the processes and operations in the organization. Another impact of their resistance is doing new processes and strategies wrongly, thus, leading to more errors in the processes and causing more delays. Interpersonal conflicts might also be a possible reaction, thus, resulting to resignations, personalism, and unprofessionalism. The resistance of employees and managers can lead the company to fund more training and development programs, which can yield additional expenses with ineffective results, due to the skepticism and lack of trust of the employees of the organization.
Style of Leadership/Management
As mentioned earlier, the management of PCCW was transformed from a conservative, seniority-based, and non-market driven, to a strongly competitive, performance-based, and customer-focused company. From this transformation alone, it can be stated that the style of leadership in PCCW is a Proactive style of leadership. This is because a proactive leader focuses on achieving performance outcomes of his or her team and shares a vision, which compels the team to move towards that vision or goal[12]. However, the presence of conflicts and resistance on the part of the employees may indicate that the type of leadership or management they experience from the company might not be sufficient to fulfill or satisfy their needs.
Prognosis for the Case
No Change Scenario
If PCCW Limited did not take any action regarding their problems, a domino effect of negative events would happen. Its debts would further increase, which would afford the company to sell their assets and resources in order to make up for the debts it have in other companies. Resignation of managers would also be another effect of a no change strategy. The increase in debts would lead to further loss of company assets, and later on, to further loss of human resources. Due to the lack of adequate resources and assets, there would the delay, inefficiency, and ineffectiveness of processes and operations in the company that would lead to the decline with the number of its customers, as becoming less satisfied. The loss of customers leads to the loss of profit, thus, resulting to bankruptcy and immediate closing of the company.
Proposed Change Strategy
It has been identified that one of the problems of the company is the lack of infrastructure development in East Asia, which hinders the development of the company. With this, the company must not wait for the development of the region, but must try to find alternative solutions and materials that would suit its processes and the trend of infrastructure in Hong Kong. If the company is bold enough, it can initiate in setting the trend in the city in terms of infrastructure development, given the right resources and the right skills and expertise. In order to do so, the company can invest in its Research & Development in its quest to find new supplies and materials. Another proposed change is the implementation of performance management strategies that would help develop and improve the overall performance of the organization. Since the management of PCCW has already been transformed into a performance-based management, performance management of the employees must be done in order to help guide them with their tasks and responsibilities in the organization. This is because performance management serves to focus the efforts and attention of employees in critical tasks using performance feedback[13]. This would then allow the employees to gain more knowledge and develop new skills in relation to their work in the company. Another change strategy is the implementation and use of Information Technology or Information Systems, which would facilitate in the organization and information retrieval in the company and in effective communication. Through the use of an IT or IS, the company would be able to organize its customer database that would allow it to have an effective and efficient product inventory, customer follow-ups, and evaluate customer feedbacks for product improvement. Lastly, the organization can improve its operations strategies through the improvement of its supply chain. In the management of its supply chain, both the suppliers and the company would be able to have an effective and efficient relationship, thus, preventing the delay of supplies and materials needed by the organization.
Key Issues for Implementation of Change Program
Primarily, the implementation of the change program would surely raise resistance among the employees and managers of the organization. The sources and the perceived impacts of this resistance were already mentioned in the previous discussions. Resistance to change of the employees leads to stubbornness and lack of support, resulting to the delay of the change process and in internal processes and operations. Second issue to take note of is the differences in the preferences of the management and leadership styles of managers in the organization, resulting to varied inter-departmental cultures and practices. Due to such differences, employees would be having a hard time dealing with other employees, which can be a possible source of conflicts. Third issue is the possibility of needing to lay off employees or reassigning them to new job positions that may require new skills, technologies, and knowledge. This may also lead to grave threats and conflicts in the organization. Fourth issue is the need for restructuring in the departments that may or may not be contributory to the welfare of employees. Fifth issue is the adequacy of resources, which would be essential in sustaining the needs of the company. Lastly, the implementation of new policies would be an issue for PCCW.
Conclusion
From the discussion, it can be perceived that in order for a company to undergo and implement a change program, it must be able to take note of different internal and external issues that would present a variety of impacts to the employees and the performance of the organization itself. As such, an effective organizational change process would consist of important elements including its external environment, internal processes and operations, the welfare of employees, the support of top management, and the satisfaction and demands of customers. Putting each element in coordination and harmony would possibly ensure an effective change process.
Bibliography
Bernardin, J. and Russell, E. (1993). Human Resource Management: An Experimental Approach, USA: McGraw-Hill.
“Cable and Wireless: Jobs Surveys”. (2003). Vault. Retrieved January 25, 2008, from http://www.vault.com/survey/employee/Cable-and-Wireless-EMPLOYEER-5960.html
“Company Profile”. (2008). PCCW-HKT DataCom Services Limited. Retrieved January 25, 2008, from http://www.pccw.com/eng/AboutUs/CompanyProfile.html
Cook, R (2001). Management of Change(MC) Thames Valley University, London
Darlington, R. and Cooke, N. (2000). “Hong Kong: Overview”, Research Briefing.
“Economic & Trade Information on Hong Kong”. (2008). TDC Trade. Retrieved January 25, 2008, from http://www.tdctrade.com/main/economic.htm
Greenlees, D. (2006). “Politics, as well as Price, Matter in Hong Kong Deal”. International Herald Tribune, 1-2. Retrieved January 25, 2008, from http://www.iht.com/articles/2006/07/09/business/telecom10.php
Greiner, L.E. (1972). “Evolution and Revolution as Organizations Grow”. Harvard Business Review, 50(4): 1-11.
Holmes, S. (2008). Leadership and Motivation Training. Retrieved January 28, 2008, from http://www.leadership-and-motivation-training.com/reactive-proactive.html
“PCCW”. (2007). Wikipedia, the Free Encyclopedia. Retrieved January 25, 2008, from http://en.wikipedia.org/wiki/PCCW
References
[1] http://www.tdctrade.com/main/economic.htm
[2] http://www.pccw.com/eng/AboutUs/CompanyProfile.html
[3] http://en.wikipedia.org/wiki/PCCW
[4] Darlington, R. and Cooke, N. (2000). “Hong Kong: Overview”, Research Briefing.
[5] http://en.wikipedia.org/wiki/PCCW
[6] Darlington, R. and Cooke, N. (2000). “Hong Kong: Overview”, Research Briefing.
[7] http://www.iht.com/articles/2006/07/09/business/telecom10.php
[8] Darlington, R. and Cooke, N. (2000). “Hong Kong: Overview”, Research Briefing.
[9] http://www.vault.com/survey/employee/Cable-and-Wireless-EMPLOYEER-5960.html
[10] Cook, R (2001). Management of Change(MC) pp.50-52.
[11] http://www.pccw.com/eng/AboutUs/CompanyProfile.html
[12] http://www.leadership-and-motivation-training.com/reactive-proactive.html
[13] Bernardin, J. and Russell, E. (1993). Human Resource Management: An Experimental Approach p.72.
Credit:ivythesis.typepad.com
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