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Organizational Change

ORAGNISATIONAL CHANGE 7010

ASSESSORS REMARKS Overall Grade - PASS The assignment met all the Learning Outcomes. The assignment can further be improved. For example:o You could have reduced the theoretical content to keep it under 3500 words. o You could have given a more focused response for Learning Outcome 3.

Introduction Organizational change occurs when a company makes a transition from its current state to some desired future state. Managing organizational change is the process of planning and implementing change in organizations in such a way as to minimize employee resistance and cost to the organization while simultaneously maximizing the effectiveness of the change effort.

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I have picked an organization UNILEVER Group for the purpose of this assignment as I haveUnilever[3] is a BritishDutch multinational company specialising in fast-moving consumer goods. Its products include foods, beverages, cleaning agentsand personal care products. Unilever is a dual-listed company consisting of Unilever N.V. in Rotterdam, Netherlands and Unilever PLC in London, United Kingdom. This arrangement is similar to those of Reed Elsevier and Royal Dutch Shell prior to their unified structures. Both Unilever companies have the same directors and effectively operate as a single business. The current non-executive Chairman of Unilever N.V. and PLC is Michael Treschow while Paul Polman is Group Chief Executive.

In this assignment, I have tried to explain In the beginning of 2000 the organization came up with a 5 billion five-year growth strategy whose goal was an important improvement in the companys performance. This plan was named Path to Growth Strategy (PGS). The activity meant wide-ranging restructuring of operations and businesses. This move received a mixed reaction from the analysts and observers, as many questioned the huge organizations ability to carry out the divestment successfully. (ICMR, 2004) To accomplish the PGS Unilever focused on:

Change the present organizational structure Concentrate on leading brands Sustain these principal brands with well-organized research and development and focused marketing plan Downsize the supply chain Shorten business processes reorganize and remove under-performing businesses and brands

Unilevers new structure was planned to focus on Unilevers two major divisions, and Home and Beauty Products. Numerous divestments were made which included European bakery supplies business, and French culinary business Benedicta, Bestfoods Baking and its subsidiaries, Elizabeth Arden and Unilever Cosmetics in addition to its Dutch refinery and industrial cleaning businesses just to name a few. (ICMR, 2004) From these changes the organization expected cost savings of 1.5 billion by 2004 and global procurement would lead to additional savings of 1.6 billion by 2003. In addition 25,000 workers were laid off. The focus of the restructuring was global but it was concentrated in the US and Europe. It was believed at that time that annual cost savings would be a billion Euros. The major cost cutting took place in the foods segment as the home and personal care sections were already much more organized. (ICMR, 2004)

1.0 Understand How to Apply Solutions to Organizational Change

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1.1 Identifying a range of organizational change models or frameworks Lewin 3-stage: Kurt Lewin theorized a three-stage model of change that has come to be known as the unfreezing-change-refreeze model that requires prior learning to be rejected and replaced. Edgar Schein provided further detail for a more comprehensive model of change calling this approach cognitive redefinition. Stage 1 becoming motivated to change (unfreezing) This phase of change is built on the theory that human behavior is established by past observational learning and cultural influences. Change requires adding new forces for change or removal of some of the existing factors that are at play in perpetuating the behavior. This unfreezing process has three sub-processes that relate to a readiness and motivation to change. Disconfirmation where present conditions lead to dissatisfaction, such as not meeting personal goals. However, the larger the gap between what is believed and what needs to be believed for change to occur, the more likely the new information will be ignored. Previous beliefs now being seen as invalid creates survival anxiety. However, this may not be sufficient to prompt change if learning anxiety is present. Learning anxiety triggers defensiveness and resistance due to the pain of having to unlearn what had been previously accepted. Three stages occur in response to learning anxiety: denial; scapegoating & passing the buck; and maneuvering & bargaining. It is necessary to move past the possible anxieties for change to progress. This can be accomplished by either having the survival anxiety be greater than the learning anxiety or, preferably, learning anxiety could be reduced. Stage 2 change what needs to be changed (unfrozen and moving to a new state) Once there is sufficient dissatisfaction with the current conditions and a real desire to make some change exists, it is necessary to identify exactly what needs to be changed. Three possible impacts from processing new information are: words take on new or expanded meaning, concepts are interpreted within a broader context, and there is an adjustment in the scale used in evaluating new input. A concise view of the new state is required to clearly identify the gap between the present state and that being proposed. Activities that aid in making the change include imitation of role models and looking for personalized solutions through trial-and-error learning. Stage 3 making the change permanent (refreezing) Refreezing is the final stage where new behavior becomes habitual, which includes developing a new self-concept & identity and establishing new interpersonal

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relationships.

Kotters 8 stage Model: In 1996 John Kotter wrote Leading Change, which looked at what people did to transform their organisations. This is summarised in Kotters 8-step modelfor change (see below.) In The Heart of Change (2002) Kotter worked with Dan Cohen to look into the core problems people face when implementing change. They concluded that the central issue was changing the behaviour of people and that successful change occurs when speaking to peoples feelings. See, Feel, Change According to Kotter and Cohen, successful change leaders find a problem or a solution to a problem and then show people using engaging and compelling situations to change behaviour. They recommend a people-driven approach that helps people to see the reason for change. They argue that people change when they are shown the truth because this influences their feelings. That is, emotion is at the heart of change.

See Compelling and eye-catching situations are created to help show people what the problems are and how to resolve them. Feel Visualising ideas evokes a powerful emotional response that motivates people into action. Change The new feelings change or reinforce behaviours that make people work harder to make a good vision reality. The change is more immediate but must be reinforced to keep up the momentum. STEP 1 ACTION Increase urgency NEW BEHAVIOUR People start telling each other, Lets go, we need to change things! A group powerful enough to guide a big change is formed and they start together well. The guiding team develops the right vision and strategy for the change effort. People begin to buy into the change, and this shows in their behaviour.

Build the guiding team

Get the vision right

Communicating for buy-in

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STEP 5 ACTION Empower action NEW BEHAVIOUR More people feel able to act, and do act, on the vision. Momentum builds as people try to fulfil the vision, while fewer and fewer resist change. People make wave after wave of changes until the vision is fulfilled. New and winning behaviour continues despite the pull of tradition, turnover of change leaders etc.

Create short-term wins

Dont let up

Make change stick

1.2 Applying a range of creative problem solving techniques to address change challenges There are many techniques which can aid in problem solving and also in implementing change. Brainstorming: In composition, an invention and discovery strategy in which the writer collaborates with others to explore topics, develop ideas, and/or propose solutions to a problem.The purpose of a brainstorming session is to work as a group to define a problem and find a plan of action to solve it.

PEST Analysis: A type of situation analysis in which political-legal (government stability, spending, taxation), economic (inflation, interest rates, unemployment), socio-cultural (demographics, education, income distribution), and technological (knowledge generation, conversion ofdiscoveries into products, rates of obsolescence) factorsare examined to chart an organization's long-term plans. SWOT Analysis: in which internal strengths and weaknesses of an organization, and external opportunities and threats faced by it are closely examined to chart astrategy. SWOT stands for strengths, weaknesses, opportunities, and threats.

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The management of BTFG used the brainstorming technique to look into the problem and suggest a good change strategy. All Board directors got together for a brainstorming sessions and discussed the problem at length. The followed steps were followed:Every MNC is measured by the standard it set in the environment in which it operates. Unilever is not an exception. Unilever has a mission to add value to life of both its present and potential customers. Accomplishing this mission will not take place in a vacuum, but in an environment which is very turbulence POLITICAL/LEGAL ENVIRONMENT Unilever, as a matter of policy, set a standard as to the way of tackling political issues. Unilever has its tactical way of handling political issues. First, in the 1960s, many countries began to nationalize foreign firms which also affected Unilever. This was a call for local equity participation in foreign firms. Thus, so many companies were subject to local control on prices, imports, employment of expatriates and so on. As a result of the adverse effect of nationalization policy, in the 1970, many US companies e.g. IBM and coca cola left India. There was fear by foreign companies on certain issues such as knowledge leakage, loss of trademark etc. 2 this was also hazardous for Unilever as its control over operation in the market was reduced. For example UAC, a subsidiary of Unilever, whose operation was in many African countries (Cameroon, Ghana, Ivory Coast, Nigeria, etc.), was focused on as its profit margin and rate of easy remittance of profit to its Anglo-Dutch parent was enormous. Nationalizing UAC hampered Unilevers control over the market where UAC operates. 3 However, Unilever use its experience and goodwill to make contacts in many countries to bargain with government so as to modify their regulations. In central and south America, Unilever only engaged in lobbying rather than active politicking. In other words, Unilever never get involved in sponsoring political parties. Today, Unilever has gained political ground using its tactical strategy and experience. Unilever is a member of many organizations all over the world. 4 The aim is t to create favorable business environment, and also facilitate corporate reputation management. 2 ECONOMIC ENVIRONMENT Unilever market environment is becoming highly competitive especially in the Western Europe. Procter & Gamble (P&G) is one of the major competitors in the European market. More so, there are so many discounters in the European market resulting from EU free trade policy. This has had adverse effect on Unilevers profit potentials.

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Retailers are pressurising FMCG producers to reduce prices of their products. 5 Consumers on the other hand would not want to buy expensive product or brands due to current economic tide. Competition in EU has grown so strong that Unilever is facing difficulties in places like France, Netherlands. In the developing countries and the emerging economies (Asia and Africa), where there are political instability, Unilever has adopted its company strategy to ensure that its profitability drive is sustained. Some Products are packaged in small size for low or regular income earner, for affordability. In some developing countries, Nigeria to be precise, there was uncertainty about duties to be paid by companies due to inflation and fluctuation of currency. The effect on Unilever was a decrease in profit in 2005 compared to 2004, though there was increase in turnover. In 2004 and 2005 the profit after tax were N2.167 billion (naira) and N1.616 billion (naira) respectively, while in the turnover in 2004 and 2005 were N28.6 billion (naira) and N33.4 billion (naira) respectively, which indicates increase in turnover but decrease in profit. Also the low per capital income of people affects Unilevers market. Over 30% of Africa population lives on less than $1 per day. 5 SOCIO-CULTURAL ENVIRONMENT Unilever has continued to maintain momentum in its socio-cultural environment in line with its sustainability drive. The company is working relentlessly to bring improve hygiene and better nutrition to people in Asia, Africa and Latin America, esp with its sustainability drive. The company is working relentlessly to bring improve hygiene and better nutrition to people in Asia, Africa and Latin America, especially the poor and obesity. 6 Over 30% of Africa population lives on less than $1 per day. By this, Unilever strengthens it goodwill. However, the low literacy of consumers affects marketing vehicles such as advertisement in print media. This therefore requires employment of more resources, for instance to enhance face-to-face communication. 7 Besides, Unilever employs about 100 nationalities. It ensures that diversity works for everybody both employees and consumer alike. 8 In order to achieve and ensure that diversity works amongst employees, Unilever employed the strategy of diversity toolkit 9 so as to manage and leverage diversity. Unilever is focused on building an exclusive culture and embracing difference, which resulted in high demand of its products in the developing and emerging markets. TECHNOLOGICAL ENVIRONMENT

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Right in the 1930s, Unilever continue to diversify. Business continue to boom in the 1950s with new technology being invented to boast production and enhance quality products for consumer, competitors improving their products using new inven entions. Unilever did not relent its effort in R&D. Since 2000, Unilever has been spending on IT to improve its business especially in the area of e-business so as to improve brands communication and market through internet, making transaction simple along chain. Today, Unilever is trying to minimize cost through IT efficiencies at global level. In addition, Unilever Technology Venture works in collaboration with Unilever R&D group to help Unilever meet consumers needs. Area of concern is genomics, advanced bioscience, advanced materials science and nanotechnology. In 2003, Unilever installed and commissioned pallet live storage system from Bitto Storage System Ltd. This was meant to store its frozen products. The facilities include: pallet live storage systems, carton live storage systems, pallet racking, boltless shelving, plastic bins and containers, wide span and heavy load shelving, cantilever racking, and multi-tier shelving systems. 10 1.3 Identifying and justifying change solutions that link to organizational strategic plans The main strategic plans of the company were: Prior to the merger, in 1888, Jurgens and Van den Bergh had already entered Germany through FDI and established factories because of market prospect, before merging with two European companies, Centra and Schicht, to form Margarine Unie ( Margarine Union) in 1927. In the mid 1890s, Lever brother also expanded its operations to Europe, America and British colonies through FDI (established factories for soap manufacturing), and exports. These were rational decisions due to economic prospect of these areas at that time. 13 Lever began to diversify into food business through acquisition in 1917. Margarine Unie on the other hand also grew through merger with other margarine companies. The merger in 1930 thereafter gave room for improved technology. After the merger, the first company was lunched in Latin America. Unilever international strategy is driven by competitive advantage and technology. 14 Today there is a serious competition between Unilever and producers of similar products. Thus Unilevers strategy is to sell some of its business line and focus on priority portfolio. Unilever has shifted concentration to developing and emerging markets, Africa and Asia where it has more competitive advantage. 15 Besides, Unilever is back to Zambia in Africa after experiencing some set back in past years. Unilever bought 79% share of Refined Oil Product (ROP) of Zambia for US $4.5million in its course of internationalization. 16

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In this regard, Unilever will provide technical and managerial training to the staff of ROP in consonant with the companys international standard. 17 Since in the 1990s, Unilever has been facing competitive problem in Europe. Unilever is investing more on R&D so as to provide goods that best satisfy customers and at reasonable price. Unilever is also connecting its business unites to promote cross-border synergies. In 1999, Unilever lunched the Heart Brand (slightly modified 2002). 18 This is a logo strategically designed to create international brand awareness and promote international synergies in manufacturing and marketing centralization drive. This strategy is to provide recognition of Ice-cream brands and to show that other units are integral part of Unilever. Global brand can carry the same brand name and logo, but with dissimilar product standard (Mooij, 2005). Unilever has set a 5-year program since 2004 which focuses to cut 1200 underperforming brands, caused by lack of clear brand recognition in the market, so as to yield six percent of sales growth. 19 Further, Unilever opened a global procurement centre in Shangai China in 2002. 20 The reason is that this centre will serve as a source of raw material to Chinese companies so as to compete favorably internationally. It should be noted that since 1989 when Shangai Van Den Bergh; a joint venture between Unilever and Shangai Sugar, Cigarette and Wine Company, was established, Unilever has expanded tremendously in China through joint venture and acquisition. 21 Instigate a process to refocus the company.

Uniting the staff and repairing the damage incurred both internally and externally. To get people focused on the future and where the organization was heading. To identify and agree on a clear strategic direction, and demonstrate their commitment by being accountable for the outcomes.

Following are some problem solving techniques which are normally use to solve a particular problem. From these techniques we can use a single one or a combination of two as well.

Change path: the change path option seems to be a simple one revolutionary or evolutionary the revolutionary: which Enforce the change from the top levels using whatever tools, incentives or levers are available Evolutionary which Focuses more

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effort on involving and engaging the participant groups in order to achieve a fuller, less disruptive change in the longer term Changes start point: top down or bottom up. Top down appears to be favored when time is short, the change scope is relatively limited, change style : Attention: Reactions to crises: Role modeling Allocation of rewards: Selection and dismissal criteria: Change interventions: 'power tools' (coercion and financial reward) used where there is little agreement about what should be done and little agreement about what actions will lead to which outcomes, to 'culture tools' (democracy and creating new heroes or values) Change Roles: is not about the 'how' of change, but about the 'whom'.

A change solution was required to boost the morale of the employees and identify the priority strategic initiatives; and provide a mechanism for measuring and thus monitoring the progress of this transformation. To tackle the problem, BTFG came out with new problem solving technique which was a blend of change roles and change start point. A specialist team was constituted to look after the performance of each individual in every unit. The flow of orders and responsibility started to flow from CEO to employees of the company (i.e. top to bottom). Senior management was able to clearly and succinctly articulate the companys strategy. It provided everyone with a common framework for discussion of key strategic issues across the diverse business units. In other words it was a planned change and planned change refers to initiatives that are driven top-down in an organization with a long run goal achieving policy. Therefore there were two crucial responsibilities for the team to meet: Communicating the vision for the change. Establishing the support elements necessary for the change to be successful.

2.0 Understand How to Develop a Change Strategy Using Implementation Models 2.1 Evaluating a range of change implementation models Many change implementation models are available to use to implement change initiatives.

EFQM The EFQM Excellence Model is a framework for organizational management systems, promoted by the European Foundation for Quality Management (EFQM) and designed for helping organizations in their drive towards being more competitive.

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The EFQM Excellence Model is a practical, non-prescriptive framework that enables organizations to: Assess where they are on the path to excellence, helping them to understand their key strengths and potential gaps in relation to their stated vision and mission Provide a common vocabulary and way of thinking about the organization that facilitates the effective communication of ideas both within and outside the organization Integrate existing and planned initiatives, removing duplication and identifying gaps Provide a basic structure for the organizations management system Balanced Scorecard The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. The balanced scorecard suggests that we view the organization from four perspectives, and to develop metrics, collect data and analyze it relative to each of these perspectives:

The Learning & Growth Perspective The Business Process Perspective The Customer Perspective The Financial Perspective

Investors in People (IIP) Launched in 1991 Investors in People is a business improvement tool administered by UK Commission for Employment and Skills and supported by the Department for Business, Innovation and Skills (BIS). The Investors in People framework (consisting of The Standard and the wider framework) has three fundamental principles: Plan developing strategies to improve the performance of the organization; Do implementing these strategies; Review evaluating and adjusting these strategies. These three principles breakdown into 10 indicators; each indicator is subdivided into a number of evidence requirements. These detail the criteria organisations are required to meet in order to achieve the Standard. There are 39 evidence requirements in total. Business process re-engineering (BPR) BPR is the analysis and design of workflows and processes within an organization. According to Davenport (1990) a business process is a set of logically related tasks performed to achieve a defined business outcome. Re-engineering is the basis for many recent developments in management. Business process re-engineering is also known as business process redesign, business transformation, or business process change management.

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2.2 Identifying the criteria to select a change implementation model that supports organizational change. As mentioned earlier that BTFG adopted the Balanced Scorecard model to carry out the required change and the main reasons for implementing this change model were:

There was a need of Focusing for whole organization on the few key things needed to create breakthrough performance and boost the low employee morale. There was a need to integrate various corporate programmes (like quality and customer service) and the firm could manage to have long lead time between management action and financial benefits. Breaking down strategic measures to lower levels of the organization, so managers and employees both know what is required to achieve excellent overall performance.

Developing BTFGs scorecard began with the end in mind by reviewing and refreshing the vision to reflect the current ambitions of the company. The different perspectives which redirected the BTFGs mission and policies are as followed: The Learning & Growth Perspective at BTFG In the learning and growth perspective, the focus was on the question what infrastructure must the firm build to create long-term growth and improvement and how to boost the employee morale while retaining and training them. This initial step was critical because it was not only going to articulate the direction of the company from a holistic point of view, but perhaps more importantly, it would enable the team to gain a shared understanding of the key priorities. The Business Process Perspective at BTFG The internal business perspective focused on what must the firm do well internally in order to support the product/market strategy and to achieve its financial objectives. Typical outcome measures include those relating to innovation (product and process) and operations (cycle times, defect rates). As for the customer perspective, the outcome measures for the internal business perspective will require sub-division into driver measures which flow from the specific strategies the firm is adopting to achieve its internal business objectives. The Customer Perspective at BTFG The focus on customer perspective was what the firm must do to satisfy its customers so as to achieve its financial objectives. To answer this question, Managers initially identified the firms target market and clarified its marketing objectives. The measures chosen for the customer perspective were focused on the achievements of the firm in reaching and satisfying its target market. The measures consist of two types, outcome measures and driver measures (i.e., measures which cause or drive the outcome measures).

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The Financial Perspective at BTFG The financial perspective concentrated more on how the firm appears to its shareholders and considers what the firms financial objectives are. The measures used to assess whether these objectives are being achieved highlight the observable financial results of past management actions and typically include, profit, sales, ROI, cash flow or economic value added (EVA).

3.0 Be Able to Analyse an Organizational Response to Change 3.1 Demonstrating the use of analytical tools to monitor the progress and the effect of change. In the starting phase of this change at BTFG, though there was some resistance from the staff members but once the need for the proposed change was perceived more broadly and the reasons for change were communicated more widely by the top management officials and change leaders, the resistance started settling down. Also the change leading team knew that if the leader paints and effectively communicates a positive vision and establishes the support elements, resistance to change can be minimized. Therefore, to minimize the resistance and to bring in a positive attitude a simple and easy analytical tool called USEM model was suggested and implemented at BTFG. To maximize a positive response to change, BTFG was then committed to put following USEM parameters in place: U = people must understand what were doing and why S = people must have the knowledge and skills necessary to execute the change E = we must remove barriers in the environment that will prevent the change from being successful M = people must have motivation to change, i.e., they must want to help achieve the change Change leading team in BTFG tried its best by putting in place the U, S, and E parameters, and was sure that the motivation will follow. An advisory team was also formed to guide the affects of change. The advisory team was representative of all stakeholders within and affected by the organization. Members of the team were in close communication with people throughout the organization, both to receive information about needs, problems, and concerns, and to share information about the proposed change and how it will affect others. Performance Charts, a type of monitoring mechanisms, were also introduced. These charts depicted, among other statistics, the savings that can be made through the implementation of change initiatives. Since one of the objectives of the initiative was to make employees focus on their efforts towards strategic goals of BTFG, it was expected that employees will not waste their time and effort in doing non- productive tasks.

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3.2 Assessing monitoring and measurement techniques to change within an organization All change efforts are results-oriented - leaders implement change to realize new, different and better results. If the change is not monitored, effectiveness cannot be measured. Monitoring is particularly crucial during change processes due to the many forces that will challenge, resist or disrupt efforts. BTFG has also adopted some of the common monitoring and measuring techniques as used by some of the recognized companies. There were some of the basic steps taken before monitoring the changes at BTFG: Provide people the authority to implement changes. Keep people informed about the progress of changes. Listen to people's needs and concerns. Reward those who support the change efforts and achieve milestones. The key to monitoring change effectively is to stay in touch with the people. BTFG used a combined approach i.e., Enable Others to Act and Encourage the Heart to monitor and measure the affect of this change. First of all the Leaders foster collaboration and built spirited teams. Then they actively involved others. Leaders understood that mutual respect is what sustains extraordinary efforts; they strive to create an atmosphere of trust and human dignity. They then tried to strengthen others, making each person feel capable and powerful. Also to keep hope and determination alive, leaders recognized contributions that individuals made. In every winning team, the members shared in the rewards of their efforts, so leaders celebrate accomplishments which made people feel like heroes. The assessment of Performance Charts indicated that there was a significance increase in deadlines being met in time. Since employees attention was more focused, they had more time to complete their tasks.

With the help of these change measurement techniques and analytical tools, some of the main reasons for resistance were identified. It was observed that lack of communication and/or inaccurate information was creating low morale among employees. Secondly it was noted that employees were having some issues with regards to new policy where they were required to refocus their efforts in a new direction. It was also seen that despite sincere efforts by the top management, some employees were inciting other members of BTFG not to cooperate with the change team as they perceived that the new change initiative might threaten their hold on some operations.

3.3 Analyzing strategies to minimize adverse effects of change

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Given the overall corporate scorecard, supporting scorecards were also developed for each department within the firm. Within each department, a scorecard was developed for each manager and even for each individual member of staff. As every individual performance was going to be transparent and visible on scorecard against the set objectives, there was a sense of discomfort and fear amongst the employees. The main reasons for the resistance were outlined and a change leading team was organized to come up with a strategy to minimize this effect of change. Some of the main reasons for resistance and their solutions at BTFG are as mentioned below: Education and Communication In the first phase it was revealed that most of the resistance comes from lack of information or inaccurate information and analysis. Therefore to overcome this resistance to change, a change leading team was organized to educate people about the change effort beforehand. Up-front communication and education helped employees see the logic in the change effort, thus reducing unfounded and incorrect rumors concerning the effects of change in the organization

Facilitation and Support secondly it was observed by the change team that people were resisting change due to adjustment problems. So Managers could head-off potential resistance by being supportive of employees during difficult times. Managers were told to support employees deal with fear and anxiety during a transition period. The basis of resistance to change was actually the perception that there some form of detrimental effect occasioned by the change in the organization. So the employees were also provided with special training, counseling, time off work Explicit and Implicit Coercion As BTFG was already going through a bad phase so there was no question of giving any liberty to employees. Therefore some harsh and strict parameters were also adopted by the Top Management. Managers were given the power to explicitly or implicitly force employees into accepting change by making clear that resistance to change can lead to losing jobs, firing, transferring or not promoting employees.

4.0 Understand How to Evaluate the Impact of Change Strategies 4.1 Identifying the processes to review the impact of the change The generic goal of most evaluations is to provide "useful feedback" to a variety of audiences including sponsors, donors, client-groups, administrators, staff, and other relevant constituencies. There are many different types of evaluations depending on the object being evaluated and the purpose of the evaluation. The evaluation process used in BTFG was one that comes under Formative evaluation, called Brainstorming.

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It is a group creativity technique designed to generate a large number of ideas for the solution of a problem. Brainstorming is not just about generating ideas for others to evaluate and select. Over a short, but intense period BTFG drilled into the core of their business issues. This process of analysis gave them an understanding about why and not simply what their actions contributed to the business model. Therefore this technique played a vital role in boosting the employee morale and provided the team with a level of togetherness. Another approach used by BTFG was Impact evaluation. This involves counterfactual analysis, that is, a comparison between what actually happened and what would have happened in the absence of the intervention.. It is a form of evaluation that assesses the net effect of a program by comparing program outcomes with an estimate of what would have happened in the absence of a program. A powerful example of this impact, the New Zealand division of BTFG was named Funds Manager of the Year, 2001 by Morningstar and 85% of the staff felt so positive about their improved workplace that they voted it the Best place to work, receiving the top award in a recent survey by Unlimited Magazine. Some of other techniques like PERT/CPM was also used by BTFG in middle stages of its program.

4.2 Analyzing the results of the impact review BTFG used a blend of quantitative and qualitative methods in its Balanced Scorecard to deal with companies objectives. The qualitative approach was used during the early phase for preliminary exploration. The data and literature were reviewed for developing the balanced scorecard and setting up the objectives. Once change leading team had created an aggregate view of the business in the Group-level Balanced Scorecard, the business units underwent a similar process. Each business unit developed a Strategy Map that reflected the unique priorities of the unit, while being aligned with the broader strategic themes of the group. Strategic performance indicators were developed to measure progress against objectives. Initiatives for improvement were also identified. As a result, the Balanced Scorecard of each business unit told the story of its role, contribution and approach to achieving the BTFG vision. Each business head communicated this story to their staff, once their Balanced Scorecard was complete. During the secondary phase the consideration was on implementing the quantitative methods which include gathering of quantitative data -information dealing with numbers and calculations. These calculations were very crucial for the clear and effective transformation of performance of units and individuals on to the scorecard. As the Balanced Scorecard began to unfold, the sense of accountability important to Change leaders began to emerge. Ownership for outcomes of the new Balanced Scorecard strategic themes, measures and initiatives were distributed across management, at the group and business unit level. Individual performance objectives were set and

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aligned to the Balanced Scorecard; this helped everyone to recognize the importance of their contributions. Delivery against results became transparent. Shared understanding of the strategy and vision became shared commitment.

4.3 Presenting the findings of the change analysis In order to test the leadership competencies framework in a multinational company we followed a traditional approach to qualitative data collection and ethnographic fieldwork (Miles and Huberman 1994; Uzzi 1996). First, we tried to understand how Unilevers management perceived Russian societal culture and adjusted behavior to this culture. For this purpose we interviewed the expatriate manager HR Director at Unilever subsidiary in Russia. Second, we surveyed managers of this subsidiary who were native Russians and tried to understand the priorities in competency building as well as the cultural peculiarities of these perceptions. Third, we explored how Unilever bridges culture and the process of building leadership competencies. (a) Linking culture to strategy Our monitoring of Unilevers cultural and leadership practices began in 2001. In 2002, in order to test the behavioral profile of Russian management and to better interpret, examine, and enrich the GLOBE results, we interviewed expatriate HR country Director. On each GLOBE dimension, this manager was asked two sets of questions. First set of questions asked if the Russian score on selected dimensions had provided strategic advantage or strategic disadvantage to Unilever. The second set of questions was linked with the first one: if it provided an

advantage, did Unilever capitalize on this or not? If it provided a disadvantage, did the company try to correct this or not? This interview displayed the perception of the advantages of the Russian GLOBE configuration (Figure 4). One of such areas was high scores on Collectivism. The country HR Director positively assessed the ability of Russian managers and employees to work in teams and to follow group norms, to create space to share achievements widely, and to integrate efforts and

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to build organizational commitment. Unilever has developed a sophisticated system to exploit this factor and motivate the high loyalty of its Russian managers, sometimes pushing them to sacrifice individual interests. Environment with high Collectivism helps Unilever to combine innovative efforts within the company and target specific groups in the market. The respondent, however, indicated an unusually high influence of trendsetters within collectivist environment.

Unilever expatriate manager indicated low Performance Orientation as the other advantageous cultural attribute for the company. Low score on this dimension reflects the heritage of the previous command system and painful realities of current economic transition. They are difficult to change in the short period of time. However country HR Director underlined that additional performance-oriented rewards and recognition have enormous impact on personnel, and Unilever have been using these motivators effectively. The expatriate HR Director pointed on Russian cultural disadvantages. One such area was low score on Uncertainty Avoidance. Unilever tried to correct the influence of this factor by providing clear corporate guidelines, and by avoiding bureaucratic practices. Low score on Assertiveness was also considered as significant negative factor. The respondent explained this score referring to conformism and lack of leadership initiative. He also mentioned that assertive expatriates have stronger voice in the Russian subsidiary. To balance the negative impact of this factor, Unilever designed specific programs encouraging initiative and focused on selecting assertive Russian managers for quick promotion. This interview displayed Unilevers serious consideration of low Future Orientation and high Power Distance, and their impact on company policies. Per interviewee, low Future The

Orientation was considered as negative factor, but it provided advantage to Unilever.

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company was trying to be more future-oriented and to make this orientation an advantage over less future-oriented competitors. (b) Extracting leadership priorities in the cultural setting The main input in the second stage of our research is based on interviews with the Russian managers of Unilevers subsidiary. Figure 5 displays sample composition. We

interviewed 20 managers of which 19 transcripts were valid. In these interviews we used 51 cases transferred into behavioral indicators which could be further categorized into competencies. All interviews were conducted in English and tape-recorded.

The interviewees were native Russians, with good command of English language (only one was not fluent English but could effectively communicate with interviewer), responsible for a team, assignment or another organisational unit, and living abroad less than three years (to ensure that they are not influenced too much by other cultures). Our research focused on what Unilever defines middle management, covering managers in leading positions with a work experience of at least 3 years and with organisational or functional end responsibilities. In these interviews we focused on the following major issues: Which leadership competencies lead to business success? Are the competencies which lead to business success part of Unilevers LGP? Are the competencies which lead to business success country-specific for Russia? The interview format was based on the Behavior Event Interview technique (BEI) that permits to assess and predict future effectiveness of leaders (Dunnette 1976). The interviews were semi-structured and focused on examples/cases - at least 2 per interview - which visualize the behavioral aspects of successful business achievements. Based on the business

examples/cases given in the interviews, behavioral indicators have been written down and translated into competencies.

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During the interviews we asked the interviewees to talk about business success cases. To make sure these cases were real and the interviewee had an actual role in the business success case they described, we used their Personal Development Plans (PDPs) for verification purposes. To increase reliability two interviews were analyzed by a second expert person HR manager from Unilever. In this way the inter-observer reliability was checked. This expert analyzed the tapes, wrote down the critical behavior indicators, and matched these behavioral indicators with one of the 35 competencies. After conducting and analyzing the interviews we sent a report to the Russian subsidiary HR director for comments, approval, and feedback. Based on leadership competency dictionary we constructed the set of leadership contributors/factor to business success (Figure 6). Out of 35 competencies eleven fit Unilevers LGP and the other support it as periphery factors. Those eleven competencies were set upon extensive benchmark of those Unilever leaders who created high growth figures in different units and subsidiaries.

The survey displayed about 50 percent of leadership competencies identified by Russian managers that fit LGP. This reflects the validity and instrumentality of LGP. However the other half of standardized competencies that lead to business success were not considered by the Russians as the part or growth strategy. Three competencies were scored most frequently: holding people accountable (9 cases), building sustainable relations (8) and building confidence/trust (7). This reflects the relational nature of current Russian business practices with high Power Distance and low Uncertainty Avoidance. Relatively lower scores on seizing the future (5), passion for growth (6), low strategic influencing (1), and ignoring the competency creating a clear and shared vision (0) correlate with the low Future Orientation. Modest score on human care (5) reflect moderate Humane orientation in societal culture.

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Low scores on action oriented/risk taking (1) competency reflects the low Assertiveness. Lack of interest to developing self and others (0) and to organizational

awareness (0), low score on change catalyst (1) reflect low Performance Orientation in societal culture. What came as surprise in our study was the ignorance of collectivism and team orientation so critical to effective leadership worldwide and traditional to the Russian society. In particular, there was no interest to team commitment (0), team leadership (0), empowering others (0), teamwork (0). This raises serious questions about the nature of leadership in the current transitional Russian business environment and additional efforts that multinationals may put in teamwork that is imperative to innovative organizations. This survey leads to a set of recommendations for leadership development in a global company that is sensitive to local culture. It may help to improve leadership development programs, processes, and tools. In addition, this may make a contribution to the field of crosscultural leadership by adjusting competencies that lead to business success to particular societal culture.

5.0 Conclusion In this paper we discussed the relations among behavioral factors that contribute to corporate strategic success in multicultural environment. We relied on the theoretical

multidisciplinary framework linking advanced research in strategy and organizational behavior. Our exploratory research confirmed strong relations between cultural attributes and behavioral policies of multinational company in a particular environment.

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This study connected the fundamental results of a major cross-cultural study (GLOBE) and its practical implications at a leading multinational company. We learned that the effective company creatively adjusts its policies to the environment and that not all instruments for leadership competency that are traditionally considered as universal work successfully in a country-specific situations. competencies. A framework which takes both business environment and culture into consideration is recommended for organisational middle managers. Key principles for the framework are: (1) focus on competencies which lead to business success in a particular cultural environment; (2) differentiate and add competencies depending on business, functional or cultural needs, even if they may not be a part of the Leadership for Growth Profile; (3) balance between competencies that build international growth (LGP) and competencies that are necessary to achieve operational business success. The other valuable contribution of this study is detailed description of the cultural profile of a transitional country. We could summarize the most critical attributes of Russian culture that managers of multinational companies should take into consideration. The future avenues for research include statistical analysis of quantitative data and the development of a comparative framework that should help differentiating leadership development policies in international subsidiaries of a multinational company. This in turn confirmed the contingent nature of leadership

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BIBILIOGRAPHY The Balanced Scorecard, Harvard University Press, 1996. Strategic Management, J. Thompson with F. Martin Kaplan R.S. and Norton D.P. (1992), The Balanced Scorecard Measures That Drive Performance, Harvard Business Review, January - February, p 71-79. Kaplan R. S. and Norton D.P. (1996), Translating Strategy into Action - The Balanced Scorecard, Harvard Business School Press. Wade D. (1997), Measuring Performance with a Balanced Scorecard, Managers Handbook, July, Vol. 2, No. 7, p 6-7. Kaplan R.S. and Norton D.P. (1996), Linking the Balanced Scorecard to Strategy, California Management Review, Vol.39, No.1, p53-79. Kaplan R.S. and Norton D.P. (1996), Knowing the Score, Financial Executive, NovDec, Vol. 12, No.6, p30-33. Kersnar J. (1999) Hitting the Mark, CFO Europe, February, p 46-49. Kotter, John. Leading Change [Boston; Harvard Business School Press, 1996] Booth-Butterfield, S. (1996). Stages of Change Retrieved March 15, 2002.

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Brown, K. M. (1999). Transtheoretical model/stages of change Retrieved March 12,2002. Jensen, B. (1996). Was change management ever necessary? Retrieved January 17,2002. http://www.as.wvu.edu/~sbb/comm221/chapters/stages.htm http://hsc.usf.edu/~kmbrown/Stages_of_Change_Overview.htm hhtp://www.simplerwork.com/library/c27.htm

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