AN EVALUATION OF EMPLOYEE PERCEPTIONS OF ORGANISATIONAL CULTURE CHANGE AND HOW IT HAS IMPACTED ON EMPLOYEE AND COMPANY PERFORMANCE.
A case of Dairibord Zimbabwe Private Limited (2008 to 2010)
Daphne Mvududu – R900910N
A research proposal submitted in partial fulfilment of the requirements for the degree of Master of Business Administration, February 2010.
University of Zimbabwe
Graduate School of Management
Supervisor: Mr G. Magaramombe
In the past 25 years, the concept of organizational culture has gained wide acceptance as a way to understand human systems. From an “open-systems” perspective, each aspect of organizational culture can be seen as an important environmental condition affecting the system and its subsystems, Handy (1985). Organisational culture as a concept is therefore a potentially valuable analytical tool in so far as it provides an understanding of business performance and operations.
This research project seeks to study employee perceptions of the impact of organisational culture change on employee and company performance. The unit of study shall be Dairibord Zimbabwe Private Limited.
1.1. INDUSTRY BACKGROUND
Dairibord Zimbabwe Private Limited (herein after referred to as “Dairibord”) falls within the Food processing sub sector. Its main competitors locally are Nestle, Den Dairy, Keshelmer and Dorking, whilst regionally it competes with such companies like Parmaalat, Woodlands Dairy and Clover. Most of its products namely fresh milk, fresh cream, cheese, lacto and yoghurts are milk based. However, Dairibord has also moved to non-milk based products namely mineral water and juices and competes with Schweppes, Zimbabwe, Delta Beverages and Lyons Zimbabwe. In terms of national milk intake Dairibord takes up about 55% and the rest is taken up by competitors. The diagram below shows its market share of non-milk based products. On average, Dairibord commands a market share of 72%.
Domestic Market Share Comparison: Table 1.1
Source: Probe Market Research – 2008
According to Porter (1985) there are Five Competitive forces which can determine industry attractiveness. These Five forces are depicted in the diagram below.
PORTER’S FIVE FORCES
Bargaining power of suppliers
Threat of substitute
products or services
Source: Porter (1985)
In respect of Dairibord, Porter’s (1985) model can be summarised as follows:
Threats of New Entrants
The threat of new entrants for dairy industry is low given the decline of raw milk output as this is reducing industry attractiveness. The decline in farming activities, shortage of stock feeds and high operational costs in dairy farming is posing high entry barriers to new players. Economies of scale enjoyed by larger firms in acquiring raw materials and distribution of products will make it difficult for new players to enter this industry. The industry is characterized by a low switching because of the similarity of the product. In addition plant and equipment for the dairy industry is highly specialized and expensive.
Threat of Substitutes
The threat of substitutes of dairy products particularly milk is very low as there is no direct substitute for this commodity. This is a major advantage to Dairibord. However, the threat of substitutes is high on the beverage side which has major players like Schweppes Zimbabwe, Mr Juicy and Rainbow Beverages. Buyers can easily substitute juices with crushes and cordials.
Bargaining Power of Suppliers
The bargaining power of suppliers is high. This is driven by shortages and erratic supply of key raw materials like coal, dairy detergents, packaging (e.g. sheeting) and ingredients. Local suppliers are therefore charging high costs for the main inputs. Dairibord is responding to this by forward buying and importing some of its key raw and packaging materials.
Bargaining Power of Buyers
Buyer power is high as there is now a variety of dairy milk products, juices and mineral water on the market. This has been reinforced by the liberalization of the economy as buyers now have a large range of products to choose from. As such Dairibord has to continue to produce quality products and also cost its products correctly if it to is to win customer preference in a competitive and sustainable way.
Intensity of competitive rivalry
The industry has high and intense local and regional competition. In the regional markets major players are Pamalaat and Clover. Domestic competitors include Kershelmar, Keffalos, Dendairy, and Dorking. Many smaller farmers are also side-marketing their milk.
1.2. COMPANY BACKGROUND
Dairibord is a subsidiary of Dairibord Holdings. It is a leading producer and marketer of dairy foods and beverages for both the domestic and export markets. Dairibord was incorporated in July 1994 following the change in the legal status from a parastatal – Dairy Marketing Board (DMB), to a commercial Company.
In 1997, the company became the first state-owned company in Zimbabwe to privatise, and listed on the Zimbabwe Stock Exchange the same year. In April 2006, the company rebranded to Dairibord Holdings. The company has performed consistently well and has been named as one of the top ten listed companies. Other subsidiaries of Dairibord Holdings include; Lyons, Dairibord Malawi Limited and NFB Logistics. The company also has a 40% stake in Charhons.
Dairibord Zimbabwe Private Limited (DZPL) is the flagship of the group. It operates seven strategic factories throughout Zimbabwe in Harare, Chitungwiza, Bulawayo, Gweru, Kadoma, Mutare and Chipinge. The Strategic Business Unit (SBU) has a staff compliment of 452 employees.
With the Vision; “To be the best and most successful company in Africa commanding a position of sustainable growth driven by technology and market share leadership” and its Mission; “To be the most sought after marketer of Nutritious food and beverages with domestic dominance and regional presence,” the organization adopted a market oriented approach in 2009 by restructuring all its functions to improve and enhance its service quality delivery. The company has three key objectives:
• To win customers’ preference
• To create sustainable competitive advantage
• To create sufficient value for the shareholders
It should be pointed out that the mission and vision of Dairibord for the period 2008 to 2010 have remained the same. The only difference is in the management style because the period under research has had different Managing Directors..
1.3. BUSINESS MODEL
According to Johnson, Pearce (2006) a Business Model describes how an organization creates, delivers, and captures value – economic, social, or other forms of value. Dairibord’s business model is premised on the following:
Sustainable business Growth
• Volume and Revenue Growth (Top line)
• Market Share Growth
• Profitability (Bottom line)
• Maximizing value per litre
• An efficient cost management system
1.4. MACRO ECONOMIC ENVIRONMENT
The macro environment comprises general trends and forces that may not immediately affect the relationships that a company has with its customers, suppliers and its intermediaries, but, sooner or later, macro environmental changes will alter the nature of these relationships. The macro- environment is divided into political, economic, social, technological, legal and environmental.
According to Palmer and Hartley (1996), politicians are instrumental in shaping the general nature of the external environment as well as being responsible for passing legislation that affects specific types of organization. As the legislator, government passes laws that can affect market and production possibilities for individual firms, including the competitive framework within which firms operate.
The current political situation in Zimbabwe that came into operation through the signing of the Global Political Agreement on 15 September 2008 is challenging for business growth. At the epicentre of the economic crisis, have been unprecedented levels of hyper-inflation, sustained period of negative Gross Domestic Product (GDP) growth rates, massive devaluation of the currency, low productive capacity, loss of jobs, food shortages, poverty, massive de-industrialisation and general despondency.
It is, therefore, a fundamental task of the new Inclusive Government to address the above and to resuscitate and rehabilitate the economy. In addition, the new Inclusive Government has to attend to the major imperator of nation building and national healing.
Most foreign investors are not yet confident with the new Inclusive Government and seem to have adopted a wait and see attitude. However, most companies seem to be moving away from the survival mode to the growth mode and it is hoped that investor confidence will slowly build up. Prior to the signing of the Global Political Agreement, the political environment was highly polarised. This created a situation of great uncertainty and unpredictability which was inimical to business survival and growth.
Businesses need to keep an eye on indications of a nation’s prosperity. There are many indicators of a nation’s economic health, of which two of the most common are measures of gross domestic product (GDP) and household disposable income. An analysis of the economic environment will also indicate the level of competitor activity, an oversupply of products in a market sector normally results in a downward pressure on prices and profitability. Competition for resources could also affect the production costs of an organization, which in turn will affect its production possibilities and pricing decisions, Palmer and Hartley (1996).
The introduction of multiple currencies by both the Fiscal and Monetary Policy statements of January 2009 has rendered the local currency ineffective. With the changes currently setting in the environment where the market determines the pace of industry, this eventually suggests a free market economy conducive for the prolific growth of the economy. Fair product pricing will eventually prevail due to competition.
As part of its obligation to address the economic crisis, Government came up with the Short Term Emergency Recovery Programme (hereinafter referred to as STERP), which covered the period February to December 2009. The key goals of STERP are to stabilise the macro- and micro-economy, recover the levels of savings, investment and growth, and lay the basis of a more transformative mid-term to long-term economic programme that will turn Zimbabwe into a progressive developmental State.
STERP is, therefore, part of implementation of the Global Political Agreement and seeks to address the key issues of economic stabilisation and national healing, whilst at the same time laying the foundation of a more comprehensive and developmentalist economic framework which will succeed the same.
For Dairibord which is heavily reliant on raw milk as its major ingredient for its products, STERP advocates that long term sustainable viability of agriculture can only arise if there is security of tenure through among other instruments, lease hold title, land permits and private financing of agriculture as recognised in the GPA. In order to promote confidence, investments and other developments on farms, as well as ensuring security of farming operations, The Inclusive Government will uphold the rule of law as well as enforce law and order on farms including arresting any further farm invasions which disrupt farming activities. For Dairibord STERP guarantees security on farms in light of the fact that the national herd and milk intake has significantly shrunk due to disturbances on the farms.
For manufacturing which Dairibord falls under, STERP is to ensure that the current industrial capacity utilisation be increased from the current low levels of around 10% to over 60%. In order to achieve capacity utilisation target of over 60%, the Inclusive Government will support the manufacturing sector through the establishment of an external credit facility for importation of raw materials and equipment for retooling, among other necessities. The Mid-Term Monetary Statement of 2009 also is a document which support STERP in that it acknowledges that the major manufacturing potential exists in foodstuffs and beverages among other things and that since 2000, the manufacturing industry has significantly contracted as a result of some major problems which included a hyperinflationary environment, foreign exchange controls, depressed aggregate demand, shortage of foreign currency, working capital constraints and a regime of price controls, which compromised viability.
The sector also suffered from skills flight, power outages, and erratic supply of fuel as the economy sank deeper into recession .In addition to the above, the manufacturing sector continues to face challenges related to unreliable delivery of essential public utilities such as power, coal, water, transport and telecommunications. Other challenges relate to working capital, ageing equipment, low effective domestic demand as well as pressure for higher wages. Dairibord has not been spared from the said challenges.
Central to addressing the above the Mid Term Monetary Statement of 2009 states that securing lines of credit will allow improved capacity utilisation. Government will, therefore, pursue pledged support from the various countries and financial institutions. Dairibord will benefit from this as most of its plant and machinery is aged and it also imports milk powders and sheeting material and these require huge financing.
Social and Cultural
Palmer and Hartley (1996) have observed that attitudes to specific products change through time and at any one time between different groups. Zimbabwe has also witnessed global trends in the increased awareness and demand for health and functional foods. In response Dairibord produces mineral water, fat free and low fat yoghurts and ice creams which cater for the health conscious consumers.
The HIV and AIDS pandemic has affected productivity in most companies in the industry. Skills drain particularly on technologically oriented competences has negatively affected most companies and the country at large where skilled personnel have left for greener pastures in the region and abroad. Dairibord as a company has not been spared.
Palmer and Hartley (1996) argue that companies need to monitor technological developments and to understand their possible impact on four related business areas: Technological development allows new goods and services to be offered to consumers. New technology can allow existing products to be made more cheaply, thereby lowering their price and widening their markets. Technological development allows for new methods of distributing goods and services. New opportunities for companies to communicate with their target customers have also emerged as a result of new technology.
In Zimbabwe progress on technology has mainly been hampered by lack of foreign currency. For Dairibord plant availability and capacity is hampered by obsolete plant and equipment. Competitiveness is undermined by underutilization of strategic technologies; that is information management system (SAP – an enterprise resource system). This is because while some old personnel who pioneered the major turnaround are still around, normal attrition has taken its toll.
The legal environment influences the relationship between business enterprises themselves, not only in terms of contracts for transactions between them, but also in the way they relate to each other in a competitive environment. The legal environment influences the production possibilities of an enterprise and hence the products that can be offered to the consumers as observed by Palmer and Hartley (1996).
Statutory Instrument 21 of 2010 namely the Indigenisation and Economic Empowerment (General) Regulations of 2010 will have an impact on most companies that have an element of foreign ownership. The law requires that foreign owned companies should have at least 51% shareholding comprising of the local people in Zimbabwe. This may result in some foreign – owned companies winding up business in Zimbabwe simply because they do not want to dilute ownership or shareholding.
The Land Reform Policy has disturbed farming activities and there is lack of continuity on certain farms. Disturbances on the farms have affected the dairy industry negatively. The Land Reform Policy is legislation passed by the Zimbabwean government and in February 1999, the government publicly reaffirmed its intention to pursue the land reform strategy set out at the donors’ conference in September 1998. Cabinet endorsed the two year inception phase of this strategy. The strategy involved fully transparent procedures governing the acquisition and redistribution of land, the payment of fair compensation for land acquired, and immediate commencement of the inception phase that would focus on the resettlement of uncontested farms.
Business organizations operate in a physical environment that provides them with raw material inputs and also provides space to receive their waste materials, either directly from the organization’s production processes or indirectly after consumption. Being “green” may actually save company money. A company that adopts environmentally sensitive production methods ahead of compulsion can gain experience and competitive advantage ahead of other companies, Palmer and Hartley (1996).
The use of refrigerants is now being discouraged as these are not environmentally friendly. Regulatory authorities are now calling for stricter compliance on pollution and waste management regulations for example, environmentally friendly packaging materials which are recyclable. Compliance is expected on health and safety issues as well as city by laws. There is also stricter control on veterinary diseases and stock movement. All the above issues affect Dairibord, and as a company it has to comply.
1.5. SWOT ANALYSIS
A SWOT analysis is a tool, which can be used to gain useful insight regarding the strengths, weaknesses, opportunities and threats of a company or organisation. A scan of the internal and external environment is an important part of the strategic planning process.
A firm’s strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage. For Dairibord, these are:
• Powerful Information management system (SAP)
• Strong brands for example chimombe, lacto, steri milk
• Effective domestic distribution network
• High market share in the domestic market
• Manufacturing ability
• Leadership and management skills
• Financial and cash resources
The absence of certain strengths may be viewed as a weakness. In some cases a weakness may be the flipside of a strategy. For Dairibord these are:
• Skills drain
• Inconsistent product supply
• Inconsistent product quality
• Weak marketing information and intelligence
• Over reliance on few markets and liquid milk in exports
• Few to zero market visits in export market
• Absence of marketing support for both domestic and export market
• Inflexible trading terms
• Lack of capability building
• Lack of succession planning
The external environmental analysis may reveal certain opportunities for profit and growth. In the case of Dairibord, these are:
• High demand for food and beverages
• World Cup 2010. Dairibord is targeting to increase its volumes especially for its chimombe brand during the World Cup Soccer games. The games will be held in winter and as such most consumers are likely to take tea or coffee in the comfort of their homes whilst watching these games.
• COMESA CU and SADC provide large market for products
• Ban on milk imports will mean a reduction in the influx of milk products which were landing at a cheaper price hence competing heavily with Dairibord products.
• Export demand for Super Milk especially in Botswana.
Changes in the external environment also may present threats to the firm. These are outlined below for Dairibord.
• Declining disposable incomes
• Declining raw milk intake
• Low productivity due to HIV and AIDS pandemic
• Side-marketing by farmers and retailers and stiff competition on beverages
• Erratic water supplies and power outages
• Ban on milk imports because Dairibord imports milk powders from Netherlands and Denmark.
1.6. THE TWO TYPES OF CULTURE – A case of Dairibord.
The period under review is 2008 to 2010. The period 2008 was characterised by an organisational culture, which was anchored on bureaucracy and tall organizational structures. Though Dairibord privatized in 1997 other aspects of the parastatal mentality were still visible in the company especially the thrust on being a production led company. Though the company had guiding principles in determining salaries for employees namely capacity to pay and linking salaries to the market, the salaries were mainly fixed. Individual performance was not recognized. The culture under this period was characterised by the blame game, lack of employee commitment, absence of team work and no proper channels of communication.
The period from 2009 saw a change in the organizational culture. The company’s thrust to grow was anchored on the premise that a successful business is market driven and exists to meet or exceed the requirements of the customer. The three pillars namely to win customers’ preference, create sustainable competitive advantage and create sufficient value for the shareholders became the organisation’s mantra across the board. Under the new organisational culture, flat and lean structures, which are close to the ground and responsive to the market, were created. Team work, empowerment, coaching, delegation, discipline, effective communication and ownership of activities and procedures were highly valued for each manager because in the absence of these key attributes company goals and objectives could not be met. The company introduced a variable reward system, which linked pay to performance, and each employee knew his/her targets. The system is transparent such that
one can actually calculate one’s potential reward at the end of the month. The table below attempts to summarise the two types of culture for Dairibord.
Elements of the “Old Culture” Elements of the “New Culture”
Production Driven Market Driven
Blame game Ownership of processes and decisions
Focused on selling Focused on market information and emphasis is on meeting and exceeding customer expectations.
Bureaucracy, tall organisational structures Lean, flat organizational structures
Fear Communication and open door policy
Absence of 80/20 rule
Prioritisation and emphasis on 80/20 Rule
Lack of teamwork, “silo” mentality Teamwork, driven by a common vision
Limited knowledge transfer Coaching, delegation and empowerment
Lack of discipline, poor time keeping, failure to meet deadlines and failing to comply to legislation Discipline, good time keeping, meeting deadlines and compliance to legislation
Reward Philosophy :
-Fixed reward policy.
– no distinction between good and bad performance
– determined by capacity to pay
– looks at market trends Reward Philosophy:
-variable, linking pay to performance.
-market related conditions of service
-capacity to pay by the organization
– monitors inflation movement
Dairibord embarked on a restructuring exercise in 2009 which is in pursuance of a market driven model that provides sustainable competitive advantage. The new structures are lean and flat and they allow managers to be close to the customer and to what is happening to the ground. Below is an illustration of the Sales and Marketing structure before and after the restructuring exercise.
Source: Dairibord Newsletter (2009)
The new structure has divided the company into the Northern and Southern regions. Harare, and Mutare factories fall within the northern region whilst Bulawayo and Gweru factories fall under the southern region. Chipinge, Kadoma and Chitungwiza are producing dairies they do not sale any product. They produce for other dairies hence they do not have any Marketing and Sales personnel under them.
The new structure has done away with the positions of Regional Sales Manager which was geographically oriented. The new structure has also done away with the supervisor position which was an unnecessary layer, not adding value to the organization.
As a result of the restructuring exercise Dairibord has divided the country into eight (8) segments and the new structure has introduced Area Sales Representatives and each Area Sales Representative has been given a specific area to manage. Segmentation of the country ensures that the entire country is able to enjoy Dairibord’s offering. The areas are as follows:
1. North West Area which covers Borrowdale and Bulawayo road
2. Central Area which covers the peripheral area between Josiah Tongogara, 7th Street, Kenneth Kaunda and Rotten Row.
3. South East Area which covers Mutare Road and Masvingo Road
4. South West Area which covers Masvingo Road and Bulawayo Road
5. North East Area which covers Borrowdale Road and Mutare Road
6. Eastern Area which is covers Manicaland
7. Midlands Area which covers the Midlands Province
8. Matabeleland which is broken down into Bulawayo Metropolitan, Northern and Southern provinces.
The advantages of the new Sales and Marketing structure when compared to the old structure are that:
1. There is more coverage and aggressive penetration in terms of selling
2. There is improved market penetration because the structure is now supported by merchandisers who are responsible for each product line in the retail shops.
3. The structure is in support of the company’s strategy
• To win customers’ preference
• To create sustainable competitive advantage
• To create sufficient value for the shareholders
4. The structure is more customer focused and allows for brand equity which is supported by the Marketing Operations Manager for the different brands. These brands are the “Foods” which comprise the ice creams, yoghurts, cheeses, powders and butter, “Beverages” which comprise the mineral water and juices and the “Liquids” which comprise the milk that is lacto, fresh milk, sterilized milk, chimombe brand and super milk. .
2.0 PROBLEM STATEMENT
What impact does organisational culture change have on employee and company performance? There has been an organisational culture change which has ushered in new ways of doing business in Dairibord. There are two periods to be considered namely, the period 2008 which was characterised by a bureaucratic “old culture” and the period 2009, when a market driven “new culture” was introduced. However, the problem is, no instrument or framework to assess the impact of the “new culture” on employee and company performance has yet been put in place. This exploratory study seeks to remedy the situation.
3.0 RESEARCH OBJECTIVES
Saunders (2003) notes that for credible research to be effective, the title needs to be clear, preferably short and to the point and should relate to a particular time period. The overall objective of this study is to evaluate employee perceptions of organisational culture change and how it has impacted on employee and company performance at Dairibord. The specific objectives are as follows:
1. Establish employee understanding of the culture in Dairibord in the period 2008.
2. Establish employee understanding of the culture in Dairibord in the period 2009 to 2010.
3. Establish employee understanding of the culture change and its impact on employee and company performance in Dairibord.
4. Identify benefits (if any) derived from the culture change for the period under review.
5. Make any necessary recommendations in light of the research findings.
4.0 RESEARCH QUESTIONS
In order to conduct the research systematically and to fulfil the research objectives, the following research questions have been formulated to guide the researcher.
1. Do employees understand the type of culture in the period 2008?
2. Do employees understand the type of culture in Dairibord in the period 2009 to 2010?
3. Has organisational culture change had an impact on employee and company performance in Dairibord?
4. Are there any benefits which have been derived from organisational culture change for the period under review for both the employee and Dairibord?
5. What recommendations can be made in light of the research findings?
5.0 RESEARCH PROPOSITION
According to Johnson (2006) a proposition is a possible answer to a research question. It helps the researcher in proving whether the theory or expectation holds true for the research situation.
The proposition for this research is Organisational Culture change in Dairibord has had a positive impact on employee and company performance.
6.0 JUSTIFICATION OF RESEARCH
There has been no internal research in Dairibord for the period 2008 to 2010 on the assessment of culture and organisational culture change on employee and company performance. The study hopes to explore and assess the impact of organisational culture change in Dairibord on employee and company performance. A justification for this research lies in its potential contribution to the stakeholders of Dairibord namely its employees, managers, shareholders, customers, suppliers, the academics, researchers, policy makers and other organisations..
7.0 SCOPE OF RESEARCH
The research study will confine itself to Dairibord’s culture and culture change in the period under review and the impact of the culture change on employee and company performance.
Dairibord has seven regions or factories across the country namely in Bulawayo, Gweru, Mutare, Chipinge, Kadoma, Chitungwiza and Harare. However, for purposes of this study the researcher will confine the study to the Harare factory. This factory has approximately 50% of the total compliment which is 452 employees. Its population also has potential respondents for the study that is employees straddling the period 2008 to 2010. The researcher will not be able to cover the factories outside Harare due to time constraints and costs associated with travelling and accommodation.
8.0 LITERATURE REVIEW
The primary source of this study will be published literature and other research papers and case studies on the topics of organisational culture and change management.
The literature study is to be utilized as a base to show the impact of organisational culture on employee and company performance. The literature is to be selected and critically evaluated so as to select only the critically relevant information, while still portraying the sentiments of the respective authors.
8.1. ORGANISATIONAL CULTURE
Gold (1982) defines organizational culture as a quality of perceived organizational specialness – that it possesses some unusual quality that distinguishes it from others in the field. Schwarz and Davis (1981) on the other hand points out that culture is a pattern of belief and expectations shared by the organization’s members. These beliefs and expectations produce norms and powerfully shape the behaviour of individuals and groups in the organization.
Kotter and Hesketh (1992), argue that culture represents an interdependent set of values and ways of behaving that are common in a community and that tend to perpetuate themselves, sometimes over long periods of time. Louis (1980) defines organizational culture as a set of understandings or meanings shared by a group of people that are largely tacit among members and are clearly relevant and distinctive to the particular group which is also passed on to new members. Schein (1992) sees organizational culture as a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems.
According to Trice and Beyer (1984), organizational culture is any social system arising from a network of shared ideologies consisting of two components: substance-the networks of meaning associated with ideologies, norms, and values; and forms the practices whereby the meanings are expressed, affirmed, and communicated to members.
Organisational culture as observed by Dobson (1988), is an idea in the field of organisational studies and management which describes the psychology, attitudes, experiences, beliefs and values (personal and cultural values) of an organization. It has been observed by Dobson (1988) as the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization.
This definition by Dobson (1988) continues to explain organizational values also known as beliefs and ideas about what kinds of goals members of an organization should pursue and ideas about the appropriate kinds or standards of behaviour organisational members should use to achieve these goals. From organisational values develop organizational norms, guidelines or expectations that prescribe appropriate kinds of behaviour by employees in particular situations and control the behaviour of organizational members towards one another.
8.2 TYPES OF CULTURE
Researchers have identified a number of organizational culture types.
Handy (1985) popularized the 1972 work of Roger Harrison of looking at culture which some scholars have used to link organisational structure to Organizational Culture. He describes Harrison’s four types thus:
Power Culture which concentrates power among a few. Control radiates from the center like a web. Power cultures have few rules and little bureaucracy; swift decisions can ensue. In a Role Culture, people have clearly delegated authorities within a highly defined structure. Typically, these organizations form hierarchical bureaucracies. Power derives from a person’s position and little scope exists for expert power according to Handy (1985).
By contrast, in a Task Culture, teams are formed to solve particular problems. Power derives from expertise as long as a team requires expertise. These cultures often feature the multiple reporting lines of a matrix structure. A Person Culture exists where all individuals believe themselves superior to the organization. Survival can become difficult for such organizations, since the concept of an organization suggests that a group of like-minded individuals pursue the organizational goals. Some professional partnerships can operate as person cultures, because each partner brings a particular expertise and clientele to the firm, Handy (1985).
Organisational culture can also be categorised into strong and or weak cultures. Strong culture is said to exist where staff respond to stimulus because of their alignment to organizational values. Conversely, there is weak culture where there is little alignment with organizational values and control must be exercised through extensive procedures and bureaucracy.
Where culture is strong people do things because they believe it is the right thing to do. However, there is a risk of another phenomenon called groupthink. Groupthink was described by Janis (1996) as a quick and easy way to refer to a mode of thinking that people engage in when they are deeply involved in a cohesive group.
According to Dennison (1990) groupthink can also be defined as a state where people, even if they have different ideas, do not challenge organizational thinking, and therefore there is a reduced capacity for innovative thoughts. This could occur, for example, where there is heavy reliance on a central charismatic figure in the organization, or where there is an evangelical belief in the organization’s values, or also in groups where a friendly climate is at the base of their identity (avoidance of conflict). Group think is very common, it happens all the time, in almost every group. Members that are defiant are often turned down or seen as a negative influence by the rest of the group, because they bring conflict.
Dennison (1990) believes that innovative organizations need individuals who are prepared to challenge the status quo, be it groupthink or bureaucracy, and also need procedures to implement new ideas effectively.
8.3 MODELS AND THEORIES OF ORGANISATIONAL CULTURE
Various authors have expressed different and supporting views on organisational culture.
Deal and Kennedy (1982) defined organisational culture as the way things get done around here. They measured organizations in respect of:
• Feedback – quick feedback means an instant response. This could be in monetary terms, but could also be seen in other ways, such as the impact of a great save in a soccer match.
• Risk – represents the degree of uncertainty in the organization’s activities.
Using these parameters, they were able to suggest four classifications of organizational culture:
The Tough-Guy Macho Culture.
Feedback is quick and the rewards are high. This often applies to fast moving financial activities such as brokerage, but could also apply to a police force, or athletes competing in team sports. This can be a very stressful culture in which to operate.
The Work Hard/Play Hard Culture
This is characterized by few risks being taken, all with rapid feedback. This is typical in large organizations, which strive for high quality customer service. It is often characterized by team meetings, jargon and buzzwords.
The Bet your Company Culture
This is, where big stakes decisions are taken, but it may be years before the results are known. Typically, these might involve development or exploration projects, which take years to come to fruition, such as oil prospecting or military aviation.
The Process Culture
This occurs in organizations where there is little or no feedback. People become bogged down with how things are done not with what is to be achieved. This is often associated with bureaucracies. While it is easy to criticize these cultures for being overly cautious or bogged down in red tape, they do produce consistent results, which are ideal in, for example, public services.
According to Schein (1992), culture is the most difficult organizational attribute to change, outlasting organizational products, services, founders and leadership and all other physical attributes of the organization. His organizational model illuminates culture from the standpoint of the observer, described by three cognitive levels of organizational culture.
At the first and most cursory level of Schein’s model is organizational attributes that can be seen, felt and heard by the uninitiated observer. Included are the facilities, offices, furnishings, visible awards and recognition, the way that its members dress, and how each person visibly interacts with each other and with organizational outsiders.
The second level deals with the professed culture of an organization’s members. At this level, company slogans, mission statements and other operational creeds are often expressed, and local and personal values are widely expressed within the organization. Organizational behaviour at this level usually can be studied by interviewing the organization’s membership and using questionnaires to gather attitudes about organizational membership.
At the third and deepest level, the organization’s tacit assumptions are found. These are the elements of culture that are unseen and not cognitively identified in everyday interactions between organizational members. Additionally, these are the elements of culture which are often taboo to discuss inside the organization. Many of these ‘unspoken rules’ exist without the conscious knowledge of the membership.
Those with sufficient experience to understand this deepest level of organizational culture usually become acclimatized to its attributes over time, thus reinforcing the invisibility of their existence. Surveys and casual interviews with organizational members cannot draw out these attributes, rather much more in-depth means is required to first identify then understand organizational culture at this level. Notably, culture at this level is the underlying and driving element often missed by organizational behaviourists, Schein (1985).
Schein (1992) argues that understanding paradoxical organizational behaviours becomes more apparent. He further points out that for instance, an organization can profess highly aesthetic and moral standards at the second level of his model while simultaneously displaying curiously opposing behaviour at the third and deepest level of culture. Superficially, organizational rewards can imply one organizational norm but at the deepest level imply something completely different.
This insight offers an understanding of the difficulty that organizational newcomers have in assimilating organizational culture and why it takes time to become acclimatized.
According to Schneider (1998), culture encompasses structure, hiring practices, performance objectives, communication patterns, priorities, expectations, recognition, rewards, and punishments, use of power, management practices, decision-making approaches and core beliefs. He argues that cultures are driven primarily (but not exclusively) by the nature of the business and the nature of the work. He points out in his research that no organization has a pure culture throughout, but if one peels back the layers of any organization, one will find one of four (4) core cultures. Schneider’s model describes these four (4) cultures as Control, Collaboration, Competence and Cultivation.
When looking at the relationships between these four (4) cultures, there are two important dimensions. The first dimension is what the organization pays attention to, or the content. Content determines whether the organization focuses more on current, actual issues or focuses more on future possibilities. The second dimension is how an organization makes decisions, or the process. Process indicates whether decisions are derived more objectively and impersonally or whether decisions are derived more subjectively and personally.
Each core culture is a unique blend of content and process. For example, Control is an actuality/impersonal culture. Competence is a possibility/impersonal culture. Cultivation is a possibility/personal culture. Collaboration is an actuality/personal culture. Each core culture is defined by the kind of input that is important to it and by the process it relies on to form judgments and make decisions.
The Control culture is about certainty. It focuses on certainty, predictability, safety, accuracy, and dependability. The leadership focus tends to be directive, definitive, commanding, conservative, and cautious. The management style tends to be methodical, systematic, task driven, impersonal, and objective. The approach to decision making tends to be thorough, methodical, detached, prescriptive, formula-oriented, and very objective. The approach to managing change is to mandate it. The typical reaction to change is resistance. The structure tends to be hierarchical and power comes from role and position.
The Collaboration culture is about synergy. It focuses on unity, customer connection, and people’s experience. The leadership focus tends to be about team building, coaching, participation and hiring the right mix of talent. The management style tends to be collegial, relational, supportive, informal and people-driven. The approach to decision making tends to be participative, democratic, subjective, consensus-oriented and evolutionary. The approach to managing change is for the team to call for change. The typical reaction to change is one of openness. The structure tends to be group-oriented and power comes from relationships.
The Competence culture is about distinction. It focuses on ensuring unparalleled, unmatched products or services. The leadership focus tends to be visionary, creating high expectations, stretching people and recruiting the most competent talent. The management style tends to be task driven, objective, rational, analytical, impersonal and hard to satisfy. The approach to decision making tends to be analytical, detached, efficient, rational, formula-oriented and impersonal. The approach to managing change is to drive change by achieving goals. The typical reaction to change is openness. The structure tends to be more matrixed, or ad hoc, and power comes from expertise.
The Cultivation culture is about enrichment. It focuses on the realization of ideals, values and higher order purpose. The leadership focus is about inspiration, motivation, empowerment, and enablement and building commitment. The management style tends to be people-driven, personal, relaxed, nurturing, humanistic and emotional. The approach to decision making is people-driven, subjective, evolutionary and emotional. The approach to managing change is to embrace or assume change. The reaction to change is automatic. The structure tends to be circular, and power comes from charisma..
Carmazzi (1984) talks about five types of culture as indicated below:
a) The Blame culture which cultivates distrust and fear, people blame each other to avoid being reprimanded or put down, this results in no new ideas or personal initiative because people do not want to risk being wrong.
b) The Multidirectional culture which cultivates minimized cross-department communication and cooperation. Loyalty is only to specific groups (departments). Each department becomes a clique and is often critical of other departments which in turn creates lots of gossip.
c) The Live and let live culture. This culture is complacency; it manifests mental stagnation and low creativity. Organisational members have little future vision and have given up their passion. There is average cooperation and communication and things do work, but they do not grow. People have developed their personal relationships and decided who to stay away from, there is not much left to learn. (not complete)
d) The Brand congruent culture. People in this culture believe in the product or service of the organization, they feel good about what their company is trying to achieve and cooperate to achieve it. Organizational members are passionate and seem to have similar goals. They use personal resources to actively solve problems and while they do not always accept the actions of management or others around them, they see their job as important. Almost everyone in this culture is operating at the level of group.
e) The Leadership enriched culture. People view the organisation as an extension of themselves. They feel good about what they personally achieve through the organisation and have exceptional cooperation. Individual goals are aligned with the goals of the organisation and people will do what it takes to make things happen. As a group, the organisation is more like family providing personal fulfillment which often transcends ego so people are consistently bringing out the best in each other. In this culture, Leaders do not develop followers, but develop other leaders. Almost everyone in this culture is operating at the level of organisation.
Johnson (1988) described an organization’s culture as a web, identifying a number of elements that can be used to describe or influence organizational culture:
• The Paradigm: What the organization is about; what it does; its mission; its values.
• Control Systems: The processes in place to monitor what is going on. Role cultures would have vast rulebooks. There would be more reliance on individualism in a power culture.
• Organizational Structures: Reporting lines, hierarchies, and the way that work flows through the business.
• Power Structures: Who makes the decisions, how widely spread is power, and on what is power based?
• Symbols: These include organizational logos and designs, but also extend to symbols of power such as parking spaces and executive washrooms.
• Rituals and Routines: Management meetings, board reports and so on may become more habitual than necessary.
• Stories and Myths: build up about people and events, and convey a message about what is valued within the organization.
These elements may overlap. Power structures may depend on control systems, which may exploit the very rituals that generate stories which may not be true.
Hofstede (1980), demonstrated that there are national and regional cultural groupings that affect the behaviour of organizations. He looked for national differences between over 100,000 of IBM’s employees in different parts of the world, in an attempt to find aspects of culture that might influence business behaviour.
Hofstede identified five dimensions of culture in his study of national influences:
a) Power distance – The degree to which a society expects there to be differences in the levels of power. A high score suggests that there is an expectation that some individuals wield larger amounts of power than others. A low score reflects the view that all people should have equal rights.
b)Uncertainty avoidance reflects the extent to which a society accepts uncertainty and risk.
c) Individualism versus collectivism. Individualism is contrasted with collectivism, and refers to the extent to which people are expected to stand up for themselves, or alternatively act predominantly as a member of the group or organization. However, recent researches have shown that high individualism may not necessarily mean low collectivism, and vice versa. According to Hofstede (1980) research indicates that the two concepts are actually unrelated. Some people and cultures might have both high individualism and high collectivism, for example. Someone who highly values duty to his or her group does not necessarily give a low priority to personal freedom and self-sufficiency.
d) Masculinity versus femininity refers to the value placed on traditionally male or female values. Male values for example include competitiveness, assertiveness, ambition, and the accumulation of wealth and material possessions.
e) Long versus short term orientation describes a society’s time horizon, or the importance attached to the future versus the past and present. In long term oriented societies, thrift and perseverance are valued more; in short term oriented societies, respect for tradition and reciprocation of gifts and favours are valued more. Eastern nations tend to score especially high, with Western nations scoring low and the less developed nations very low; China scored highest and Pakistan lowest.
Burman and Evans (2008) argue that it is leadership that affects culture rather than management. They reiterate that when one wants to change an aspect of the culture of an organisation one has to keep in consideration that this is a long term project. They further argue that organisational culture is something that is very hard to change and employees need time to get used to the new way of organising. For companies with a very strong and specific culture it will be even harder to change.
Cummings ; Worley (2005) on the other hand give the following seven (7) guidelines for cultural change and these changes are:
1. Understand the current structure
2. Formulate a clear strategic plan
In order to make a cultural change effective a clear vision of the firm’s new strategy, shared values and behaviours is needed. This vision provides the intention and direction for the culture change.
3. Display Top-management commitment
The authors point out that it is very important to keep in mind that culture change must be managed from the top of the organisation, as willingness to change of the senior management is an important indicator. The top of the organization should be very much in favour of the change in order to actually implement the change in the rest of the organisation.
4. Model culture change at the highest level
They further argue that in order to show that the management team is in favour of the change, the change has to be notable at first at this level. The behaviour of the management needs to symbolize the kinds of values and behaviours that should be realized in the rest of the company. They add that it is important that the management shows the strengths of the current culture as well.
5. Modify the organization to support organisational change
The fourth step is to modify the organization to support organisational change.
6. Select and socialize newcomers and terminate deviants
According to Cummings and Wooley (2005), a way to implement a culture is to connect it to organizational membership. People can be selected and terminated in terms of their fit with the new culture.
7. Develop ethical and legal sensitivity
They both point out that changes in culture can lead to tensions between organizational and individual interests, which can result in ethical and legal problems for practitioners. This is particularly relevant for changes in employee integrity, control, equitable treatment and job security.
In conclusion, Cummings and Wooley (2005) point out that change of culture in the organization is very important and inevitable. They also stress that innovation is bound to be more difficult than cultural maintenance. People often resist changes hence it is the duty of the management to convince people that likely gain will outweigh the losses.
8.4 MODELS AND THEORIES ON MANAGEMENT OF CHANGE
Change is an everyday event in the life of a corporate entity. Business graveyards are full of corpses of organizations that failed to respond to inevitable change. A shift in the status quo can be planned or unplanned, necessary or unnecessary, temporary or permanent, desirable or undesirable, revolutionary or unrevolutionary. What differs is the extent and magnitudes of the change. Not all change initiatives succeed as some fail to achieve the desired future state or partially achieve organizational objectives.
Many authors have developed theories, models and concepts on change management. This section will look at different authors and their views on change management.
Hiatt and Creasy (2002) stated that change management evolved as a result of the convergence of two predominant fields of thought, namely:
i) An engineer’s approach to improving business performance.
ii) A psychologist’s approach to managing the human side of change.
Hiatt and Creasy (2002) argue that the importance of change management can never be over- emphasized. It is necessary because products and markets are dynamic so organisations should also align themselves with changes in the market.
On the other hand the literature, which emphasizes achieving organizational efficiency, bases its assumptions on the work of Lewin (1951).
Lewin (1951) proposed a “force field” analysis model to understand organizational change. Force field analysis proposes that an organization is typically in a state of equilibrium. There are two forces, which maintain organizational stability: driving forces and restraining forces. The driving forces are those elements of the organization, which support a desired organizational change. Keeping the organization in equilibrium are the restraining forces. If the two forces are equal, the organization will remain static. Change occurs when one of these two forces becomes stronger than the other (disequilibrium). Once the change has occurred, the organization reverts to a new state of equilibrium, which reflects the desired change.
Followed to a logical conclusion, Lewin’s model predicts that an intervention, which strengthens the driving forces or weakens the restraining forces, will result in the desired change. Below is the Force
Field diagram, which is basically depicting, that change will inevitably come, not by choice but the driving forces will be more than the resisting forces, and if there is equilibrium from both sides, no change will take place.
Figure 1, Force Field Diagram, Lewin (1951)
Dobson (1998) came up with a four-phased approach to organisational change. The first step of change being recruitment, selection and redundancy policy. The second step of change being to reorganise the workforce and ensure that managers and workers who display the requisite traits occupy positions of influence. The third step is to effectively communicate the new values and lastly, the fourth step is to change systems, procedures and personnel policies for example policies to do with rewards and retention.
8.5 THE MAIN PERSPECTIVES ON THE NATURE OF ORGANIZATIONAL CHANGE
There are models that assist us to recognize that there are strong disagreements about the nature and pace of change that organizations experience. These are the incremental, punctuated equilibrium and continuous transformation models.
The Incremental Model of Change
Lindblom (1959) proposed an “incremental model” of change also known as “muddling through with purpose” and it makes use of a continuous evolving and consensus building approach. Lindblom (1959) says that people who support this view see change as being a process whereby individual parts of an organisation deal incrementally and separately with one problem and one goal at a time. Managers respond to pressures in their internal and external environments and in doing so with time, their organisations become transformed.
The Punctuated Equilibrium model of organizational transformation
This entails organizations evolving through relatively long periods of stability (equilibrium periods) in their basic patterns of activity that are punctuated by relatively short bursts of fundamental change (revolutionary periods). Revolutionary periods substantively disrupt established activity patterns and install the basis for new equilibrium periods according to Romanelli and Tushman, (1994). This model is associated with the work of Miller and Friesen (1984). According to Tushman and Romanelli (1994). The model draws its support from two sources: the first one is from the challenge to Charles Darwin’s gradualist model of evolution in the natural sciences. The second from the assertion that whilst most organizations do appear to fit the incrementalist model of change for a period of time, there does come a point when they go through a period of rapid and fundamental change as postulated by Tushman and Romanelli(1994).
However, according to Romanelli and Tushman (1994) little research has explored the empirical validity of the model’s basic arguments and this has led some to reject both incremental and punctuated models of change.
The Continuous Transformation Model of Change
Advocates of this model state that in order for organizations to survive they must develop the ability to change continuously in a fundamental manner. This is associated with fast moving consumer sectors (like retailers) which constantly reinvent themselves. The rationale behind this model is that the environment in which organizations operate is changing, and will continue to change rapidly, radically and unpredictably. It is only those organizations which follow this model that will be aligned with their environment and thus survive.
Two groups support this model. The first is the Culture-Excellence schools associated with people like Peters (1997) and Rosabeth, Moss and Kanter (1997) and they have been arguing for this model of change since the early 1980s but however they provide little solid empirical evidence to support their view. The second groups are those who seek to apply Chaos theory. Chaos theory according to Lorenzo (1960) lies in the assumption that that all organizations operate in an environment that is chaotic (dynamic and unpredictable). In order to cope with external chaos, it is argued that, they must promote continuous chaos; however there is little strong evidence to support the chaos view.
OTHER TYPES OF CHANGE
Understanding the nature of the change you wish to effect and the context in which you are working are important in determining an appropriate strategy. Entering uncharted change territory without some sort of route map puts one at an immediate disadvantage from the start. One of the first stages in charting the territory is to understand a little more about the type of change you wish to make (broadly where you want to get to and how you plan to travel).
There are a number of ways in which change can be categorised, most are related to the extent of the change and whether it is seen as organic (often characterised as bottom-up) or driven (top-down).
Ackerman (1997) has distinguished between three types of change:
Type of Change Characteristics
May be either planned or emergent; it is first order, or incremental. It is change that enhances or corrects existing aspects of an organisation, often focusing on the improvement of a skill or process.
Seeks to achieve a known desired state that is different from the existing one. It is episodic, planned and second order, or radical. Much of the organisational change literature is based on this type.
Transformational Is radical or second order in nature. It requires a shift in assumptions made by the organisation and its members.
Transformation can result in an organisation that differs significantly in terms of structure, processes, culture and strategy. It may, therefore, result in the creation of an organisation that operates in developmental mode – one that continuously learns, adapts and improves.
Sources: Ackerman (1997)
Planned versus Emergent Change
Sometimes change is deliberate, a product of conscious reasoning and actions – planned change. In contrast, change sometimes unfolds in an apparently spontaneous and unplanned way. This type of change is known as emergent change. Change can be emergent rather than planned in two ways:
Managers make a number of decisions apparently unrelated to the change that emerges. The change is therefore not planned. However, these decisions may be based on unspoken, and sometimes unconscious, assumptions about the organisation, its environment and the future Mintzberg, (1989) and are, therefore, not as unrelated as they first seem. Such implicit assumptions dictate the direction of the seemingly disparate and unrelated decisions, thereby shaping the change process by ‘drift’ rather than by design.
External factors (such as the economy, competitors’ behaviour, and political climate) or internal features (such as the relative power of different interest groups, distribution of knowledge, and uncertainty) influence the change in directions outside the control of managers. Even the most carefully planned and executed change programme will have some emergent impacts.
This highlights two important aspects of managing change as explained below.
Firstly, the need to identify, explore and if necessary challenge the assumptions that underlie managerial decisions.
Secondly, understanding that organisational change is a process that can be facilitated by perceptive and insightful planning and analysis and well crafted, sensitive implementation phases, while acknowledging that it can never be fully isolated from the effects of serendipity and uncertainty, Dawson (1996).
Episodic versus Continuous Change
Another distinction is between episodic and continuous change. Episodic change, according to Weick and Quinn (1999), is ‘infrequent, discontinuous and intentional’. Sometimes termed ‘radical’ or ‘second order’ change, episodic change often involves replacement of one strategy or programme with another.
Continuous change, in contrast, is ‘ongoing, evolving and cumulative’. Also referred to as ‘first order’ or ‘incremental’ change, continuous change is characterised by people constantly adapting and editing ideas they acquire from different sources. At a collective level these continuous adjustments made simultaneously across units can create substantial change.
The distinction between episodic and continuous change helps clarify thinking about an organisation’s future development and evolution in relation to its long-term goals. Few organisations are in a position to decide unilaterally that they will adopt an exclusively continuous change approach. They can, however, capitalise upon many of the principles of continuous change by engendering the flexibility to accommodate and experiment with everyday contingencies, breakdowns, exceptions, opportunities and unintended consequences that punctuate organisational life Orlikowski, (1996).
Using these characteristics proposed changes can be placed along two scales: radical – incremental and core – peripheral Pennington (2003). Plotting the character of a proposed change along these scales can provide a sense of how difficult the introduction of any particular initiative might be and how much disturbance to the status quo it might generate. Radical changes to an institution’s or department’s core business will normally generate high levels of disturbance; incremental changes to peripheral activities are often considered to be unexceptional and can be accommodated as a matter of course, especially if the group involved has a successful past record of continuous improvement.
8.6 THEORETICAL UNDERPINNINGS
Change management is not a stand-alone discipline, but rather its theory and practice draws on a number of social science disciplines and traditions. This leads us to the theoretical foundations of change management in the form of three (3) schools of thought, namely: the individual perspective school, the group dynamics school and the open system school.
The Individual Perspective School
The Individual perspective comprises of two groups: the Behaviourists and the Gestalt-Field psychologists. The Behaviourists view behaviour as a manifestation of an individual’s interaction with their environment. They believe all behaviour is learned. Pavlov (1927) worked on this conditioning of behaviour in an experiment where he discovered that a dog could be taught to salivate at the ringing of the bell. As a result of the experience behaviourists who follow Pavlov’s (1927) school of thought believe that good behaviour if rewarded it is repeated whilst bad behaviour if punished will not recur. Skinner (1974), however, believes that it is necessary to change the conditions that cause bad behaviour to happen.
The Gestalt-Field psychologist according to Wallen (1975) argues that an individual’s behaviour is the product of environment and reason. Learning is a process of gaining or changing insights, outlooks, expectations or thought patterns. In order to explain an individual’s behaviour, this group takes into account not only a person’s actions and the responses these elicit, but also the interpretation the individual places on these.
Group Dynamics School
This approach to understanding change is buttressed by the notion that individual behaviour is a function of the group environment or “field”, Lewin (1947) as quoted in Burnes (2000). According to this theory, individuals are constrained by group pressure to conform. Any efforts at inducing change should be targeted at changing the group norms, values and roles. The rise of teamwork and emphasis on teams in many organizations globally is testimony to the acceptance of the importance of groups in changing behaviour and ultimately organizational performance.
The Open Systems Approach
This looks at the organization in its entirety. This approach to change management is premised on the argument that organizations are made up of interconnected subsystems. These subsystems are open to and interact with external environments while at the same time open internally and interacting with each other. These subsystems are the technical subsystems, organizational goals and values subsystem, the psychological subsystems and the managerial subsystem, Miller (1967), as cited in Burnes (2004).
Successful change management therefore seeks to bring change to these subsystems collectively rather than individually.
The Planned Approach to Organisational Change
Planned Change as it is first described by Lewin (1951) is a change that is well planned and organized by an organization as compared to an ad hoc change, by accident change or force imposed on an organization to change.
Planned approach is closely linked with practice of organizational development according to French and Bell (1995). According to these authors organizational development can be defined as an emerging discipline aimed at improving the effectiveness of organisations and its members by means of systematically planned interventions. They observed that a fully effective organisation is one in which both the organisation and the individual can grow and develop. Such an environment can be termed healthy and organizational development is all about creating healthy and effective environments. Looking at organisational change, Lewin (1951) introduced Action Research and the three (3) – step model of change.
This is an effective approach of solving organizational problems through a rational, systematic analysis of issues in question. It secures information, hypotheses and action from all participating members as well as evaluating actions taken for a particular solution. It advocates that the change process on its own must become a learning situation.
In organizational terms, the classic Action Research comprises of:
(1) the organization (comprising of one or more senior managers)
(2) the subject (people where change is to take place)
(3) the change agent (a consultant of facilitator)
The above form the learning community, which carries the research, and solve the group’s problems and according to Lewin (1951) it is learning, which feed into behaviour.
The organization provides understanding of the situation and its idiosyncrasies. Having gathered the necessary information, hypotheses and action is decided, implemented and evaluated and this involves the participation of every group member.
The change agent links different views and actions within a group. It provides a method of investigation into problem solving. Action Research is based on two approaches that is change requires action and successful action is based on analyzing correctly.
The Three-Step Model of Change
Schein (1992) is one of the several theorists who have developed an earlier idea of the change process formulated by Lewin (1951). This proposes a three-stage approach. He says for a successful change to take place there must be three aspects: unfreezing (the present level), moving to the new level, and refreezing group life on the new level as illustrated below.
Unfreeze existing behaviour??Change to new behaviour??Refreeze new behaviour.
i) Unfreezing the present level
Lewin (1951) argues that for new behaviour to be adopted the old one must be discarded that is unfreezing. It is removing those forces maintaining the organizational behaviour at its present level. This involves confrontation or training those involved in the change.
ii) Moving to the new level
According to Lewin (1951) moving to the next stage, involves having identified alternatives and actions necessary and this requires developing new ideas, values and attitudes in organizational structure. This position has to be secured so that there is no going back to the current position.
iii) Refreezing group life on the new model
Once the desired change has been implemented, Lewin (1951) argued that there was need to lock in the new status quo through re-freezing. This is the stabilisation of the new quasi-stationary equilibrium in order to ensure that the new behaviours are relatively safe from regression. According to Capon (2000) this is also reinforced through the socialization process such as recruitment and induction, reward systems and cultural adjustment and through the creation of new norms of behaviour.
PHASES OF PLANNED CHANGE
In complimenting Lewin’s t(1951) three-step model many writers expanded the number of steps or phases. Lippitt (1958) developed a seven-phase model of planned change and Cummings and Huse (1989) produced an eight-phase model. Cummings and Huse (1989) point out that the concept of planned change implies that an organization exists in different states at different times and that planned movement can occur from one state to another.
Bullock and Batten (1985) developed an intergrated four-phase model of planned change in terms of two dimensions:
i) Change phase: these are distinct states an organization moves through as it undertakes planned change.
ii) Change processes: These are methods used to move an organization from one state to another.
The four phases identified by Bullock and Batten are:
i) Exploration phase: An organization explores whether it wants to make any changes in its operations. The change process is on becoming aware of the need for change and engage a consultant.
ii) Planning phase: Understand the organization’s problem after engaging the consultant. The change process is on collecting information, setting change goals and actions to be taken and engaging key decision makers to support the proposed changes.
iii) Action phase: The organization implements the changes from the planning.
The change processes involved are to move the organization from its current state to a desired future state, appropriate arrangements to manage the change process and gaining support for the actions to be taken and evaluating the implementation activities and feeding back the results.
iv) Integration phase: This comes after the changes have been successfully implemented. This involves consolidating and stabilizing the changes to become the norm of an organization. The change processes involved are reinforcing new behaviours through feedback and reward system and less dependence on the consultant by training managers and employees to constantly monitor changes.
9.0 RESEARCH METHODOLOGY
This chapter describes the research design, sample and methodology.
Gill and Johnson (1997), state that methodology is a system of explicit rules and procedures upon which research is based and against which claims for knowledge are evaluated. Thus, the research approach and strategies used are aimed at answering the research question and meeting the objective. Research methodologies can be categorised into two broad areas namely Positivism and Phenomenology. Burns (1997). Positivism employs the use of quantitative and experimental
methods to test hypothetical – deductive generalisations whilst Phenomenology uses qualitative and naturalistic approaches to inductively, and holistically understand human experience in context specific areas. According to Remenyi (1998) Phenomenology tries to understand and explain a phenomenon, rather than search for external causes or fundamental laws.
10.0 RESEARCH DESIGN
Wegner (2001) argues that selection of a research involves five sequential steps, which are:
1. Locating the field of inquiry in terms of either use of a qualitative, interpretative approach or a quantitative verification approach
2. Selecting a theoretical paradigm capable of informing and guiding the research process
3. Linking the chosen theoretical paradigm to the empirical world through a methodology
4. Selecting a method of data collection
5. Selecting a method of data analysis
The researcher will use a case study to conduct her research because a case study is useful for providing an understanding of areas of organisational functioning that are not well documented and are not amenable to investigation unless one has access to the organisation.
10.1 RESEARCH PHOLOSOPHY
11 This research will be premised on the phenomenological approach where an assertion or/ belief will be tested.
10.2 POPULATION AND SAMPLING TECHNIQUES
According to Wegner (2001), a population consists of all the possible observations of the random variable under study whilst sampling is the process of selecting a representative subset of observations from a population to determine the characteristics of the random variable under study. Wegner, (2001) describes two types of sampling techniques; namely probability and non probability sampling. Probability sampling includes all selection methods where the observations to be included in a sample have been selected on purely random (chance) basis from the population. The advantages of using probability sampling are that by selecting a representation of the population the researcher may draw conclusions about the entire population. Non probability sampling on the other hand is any sampling method in which observations are not selected randomly.
The researcher will use random sampling, by collecting and analysing data for 100 out of the 200 employees based at Harare Dairy factory. The research will be conducted at Harare factory because 50% (fifty percent) of the total staff establishment for Dairibord is stationed at Harare. In addition Harare has a sample which will cover the periods under review that is 2008 to 2010. The sample of 100 employees is made up of both managerial and non-managerial employees from all the respective departments namely Production and Quality Assurance, Engineering, Finance and Audit, Sales and Marketing, Stores and Human Resources. A sample of 100 (hundred) employees will be used so that the researcher is able to draw conclusions which can be generalised to the entire population at Harare.
The researcher will use simple random sampling because each population will have an equal chance of being selected. This will be done in excel by uploading employee data which is stored in a SAP and then administer the random sampling process.
A reasonable sample of 50 (fifty) managerial employees is meant to ensure that a reasonable number of questionnaires are received from respondents.
A pilot study is a mini study where the researcher is putting to test everything related to the impending main research or study, Wegner (2001) or according to Baker (1994) the term ‘pilot studies’ refers to mini versions of a full-scale study (also called ‘feasibility’ studies), as well as the specific pre-testing of a particular research instrument such as a questionnaire or interview schedule. Baker (1994) also point out that pilot studies are a crucial element of a good study design. One of the advantages of conducting a pilot study is that it might give advance warning about where the main research project could fail, where research protocols may not be followed, or whether proposed methods or instruments are inappropriate or too complicated. However, conducting a pilot study does not guarantee success in the main study, but it does increase the likelihood.
Pilot studies fulfil a range of important functions and can provide valuable insights for other researchers. The reasons for conducting pilot studies are outlined below: (source)
1. Developing and testing adequacy of research instruments
2. Assessing the feasibility of a (full-scale) study/survey
3. Designing a research protocol
4. Assessing whether the research protocol is realistic and workable
5. Establishing whether the sampling frame and technique are effective
6. Assessing the likely success of proposed recruitment approaches
7. Identifying logistical problems which might occur using proposed methods
8. Estimating variability in outcomes to help determine sample size
9. Collecting preliminary data
10. Determining what resources (finance, staff) are needed for a planned study
11. Assessing the proposed data analysis techniques to uncover potential problems
12. Developing a research question and research plan
13. Training a researcher in as many elements of the research process as possible
14. Convincing funding bodies that the research team is competent and knowledgeable
15. Convincing funding bodies that the main study is feasible and worth funding
16. Convincing other stakeholders that the main study is worth supporting
In the case of Dairibord, the pilot study will focus on 25 (twenty five) employees which is a quarter of the sample. The 25 (twenty five) employees will not be part of the sample. If they are allowed to be part of the sample they will influence the findings because of prior knowledge of the issues being researched.
11.0 DATA COLLECTION METHODS
According to Wegner (2001) data collection methods for statistical analyses include direct observation, interview method, questionnaire method and experimentation. In this research, the interview and questionnaire methods will be used. The interview method has an advantage of eliciting primary data responses through questioning. The three approaches under interview method are personal interview, telephone and postal interview. The researcher is based in Harare and the majority of Dairibord employees are based in Harare so both the personal interview method and filling in of questionnaire methods will be adopted.
Interview method has the following advantages according to Wegner (2001:15-16)
1. A higher response rate is generally achieved
2. Questioning allows probing for reasons
3. Data collection is immediate
4. Greater data accuracy is generally ensured
5. Useful when response data of a technical nature is required
6. Non verbal responses can be observed and noted
7. Generally more questions can be asked
8. Responses are spontaneous
9. The use of aided recall questions is possible
The interview method when compared to the questionnaire is better suited to a semi-literate segment of the population. However, some of the limitations of the interview method are that interviews are time consuming. They require trained interviewers, and is therefore expensive. Generally fewer interviews are conducted because of cost and time constraints. The possibility of gathering biased data is introduced by interviewer influence, Wegner (2001).
Questionnaire Method is a data collection instrument and the design of a questionnaire is critical to ensure that the correct research questions are addressed and that accurate and appropriate data for statistical analysis is collected, Wegner (2001).
The Questionnaire method has the advantage of permitting a wide coverage for a minimum expenditure both in money and effort. It does not need trained interviewers and all it needs “is the cost of planning, sampling, duplicating, mailing and providing stamped self -addressed envelopes for the returns”, Moser and Karlton (2004). The Questionnaire method allows respondents to express their views without due influence form either the researcher or other respondents. A questionnaire also ensures greater comparability of responses. However, a disadvantage with the questionnaire method is that it does not allow for further probing and thus answers have to be accepted as final. Nachmias and Nachmias (1981) point out that a questionnaire requires simple questions. The questions should be straight forward enough to be comprehended solely with the help of printed instructions and definitions.
For managerial employees the questionnaire method will be adopted and 50 questionnaires will be send out to the managers because they are literate and are able to fill in the questionnaire without problems. For non-managerial employees, the interview method will be used because most employees in this category are semi-literate and may face challenges in filling in the questionnaire.
Wegner (2001) concurs that management who witness the transformation of change are a good source of information and suggested that researchers draw information from their wealth of experience even though judgments are inherently subjective.
12.0 SOURCES AND TYPES OF DATA
This survey will be use primary sources of information which will be made up of questionnaire and interview responses. Secondary sources will be based on other records, studies and publications.
The research is meant to provide information and not raw data. Qualitative and Quantitative analysis will be carried out. Data will also be presented in the form of graphs, tables and charts for it to give a clear projection and enable easy comparison of data. Graphical presentations are also visually appealing and they promote more rapid assimilation of the information to be conveyed than written reports. Questionnaire loading data entry and data screening through Microsoft Excel will be implemented.
13.0 RESEARCH LIMITATIONS
The research methodology selected is likely to have the following limitations:
a) A sample size of 100 (hundred) employees will be drawn from Harare factory only due to time constraints and the costs involved in travelling throughout the other six (6) factories in Dairibord.
b) failure to disclose some information requested as it will be deemed confidential or fear of victimisation since the research will be conducted by the Human Resources Manager.
c) there is likelihood that some questionnaires will have partial responses.
14.0 DISSERTATION OUTLINE
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