research project - organizational change

Adelia Kolbe – BDP Research Project 2008 The impact and effect of change in the organisation

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Chapter 1

Introduction

1.1 Background

The organization has undergone various processes of change relating to the implementation of global improvement initiatives. The change management process has been approached with an upward trend in poor timekeeping,

absenteeism and staff literally walking out of their jobs. The cultures across the site have become more diverse as a result of Employment Equity taking full effect. With the numbers of African / black staff increasing, the language and cultural diversity has sparked dissent amongst employees.

1.2 Statement of the Problem:

Some employees are reluctant to accept change in the organization.

1.3 Research Objective:

The research project aims to: - define change

- culture and change

- explain factors that cause change

- describe the change process

- describe challenges in managing change

- conduct an empirical study within the GSK Cape Town site, Production and Administration divisions

1.4 Delimitations:

The study will be conducted within the GSK Cape Town site, which will be spread

across both the administration and production divisions.

1.5 Research Design

The research will consist of a detailed literature review on change, followed by

an empirical study within GSK.


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1.6 Significance of the study:

The study could produce information to aid the management team to address the concerns of staff.

1.7 Outline of proposed study:

Chapter 2 will deal with the literature review.

Chapter 3 will deal with data analysis and interpretation

Chapter 4 will produce the findings and recommendations.

1.8 Summary

The first chapter deals with the burning platform as it refers to the resistance of employees to embrace change in the organization. The outline of the chapters to

follow is also highlighted.

Chapter 2 will provide a detailed study on the explanation and process of change within the organization.


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Chapter 2

Literature Review

2.1 Introduction:

The organization has undergone an immense, an intensive and a strenuous change process through the course of the year which has created a climate of uncertainty amongst staff. The changes are related to, but not limited to the

need for the business to improve efficiencies on site. Changes in the global market have resulted in various GSK sites across the globe being impacted by site closures and staff cutbacks.

Every organization has a culture. The only question is, “do you shape it or does it shape you?” Leading the culture of the organization is as important as leading

the strategy and structure. While sometimes overlooked as the "soft stuff," it directly impacts business results and is one of the most important things top leaders have to do. At best, our culture can be a competitive advantage, at worst

it can be a significant drag on business results.

Above all, a mind shift on the part of GSK as a whole will be needed. Everybody knows we have the opportunity, but the mentality has to change. The attitude of everyone in the GSK value chain needs to change so that barriers are seen as

opportunities.

2.2 Defining the concept change

Change includes growth, innovation, redundancy, relocation and diversification.

The business faces change all the time, driven by internal or external influences.

For change to be effective, deploy the SMART methodology – specific, measurable, agreed, realistic and time – limited. Keep it simple.

Whatever the area of change, you will need the co – operation of your employees.

Resistance from employees is the biggest stumbling block to successful change.

A thorough, ongoing communication process is required where the reasons and benefits are communicated to eliminate uncertainties and perceptions. www.is4profit.com/business-advice/employment/managing-change.html

Humans are creatures of habit and are generally content with stability and certainty. We set our own limitations with respect to growth and change. Resistance to change comes from fear, usually fear of the unknown, or more

accurately fear of the imagined.

http://www.is4profit.com/business-advice/employment/managing-change.html


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It is a fundamental floor for the business to ignore this and not to assess the readiness for change within the organization. Failure to effectively communicate

and address the issues and concerns of staff result in immediate resistance to the change process. The business will suffer the consequences thereof.

Change in organizations is really the norm today. The world demands it and organizations adapt to it as a level of improvement for global competition and

increased productivity. We need more accountability, openness to change, teamwork and to develop high performance behaviours.

2.2 a) Creating a Culture of Change:

Organisational behaviour refers to the actions of individuals in which tasks are conducted in the organization guided by the perceived organizational culture. Sean Hadskins, OE Expert, GSK, CT

“The culture of a company is the behaviour of its leader. Leaders get the behaviour they exhibit and tolerate. You change the culture of a company by changing the behaviour of its leaders” Richard Brown, CEO, EDS

Culture is the “personality” of the organization and can be defined as the core beliefs, traditions, shared feelings and values. The culture not only shapes

managers and employees behaviour, but also determines the manner in which people interpret and respond to any given organizational situation. Values are important building blocks of culture and are deep-seated and enduring. They

motivate behaviour and emotional responses. They underpin the very way people approach their work, make choices and decisions, and deal with each other. The leadership of an organization is

responsible for the creation and management of its culture and should aim to achieve alignment between managers and employees individual values and the organizational values.

Setting an organizational culture allows managers and employees to understand and respect diversity and individual differences. www.integratehr.com/solut ionscultureandvalues.htm

The ambitions and visions for the GMS culture is to build a culture in which people value development and the creation of an environment of empowerment and engagement at all levels, whereby a positive team spirit of collaboration,

innovation and continuous improvement is fostered.

http://www.integratehr.com/solutionsculture


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Culture shaping in the organization:

The relationship between culture and change:

Organisations have definable cultures which influence success or failure of

strategies and new business initiatives.

Culture change is a leader led process

The shadow of the leader Transformational change occurs at the heart and head level

Behaviours that need to change

The culture shaping methodology creates a healthy, high performance culture which aims to produce sustainable business results and achieve commitment to change. Senn – Delaney Leadership Group

An enduring challenge is to change the institutional culture of organizations so that co – operation and development thrive. Culture alignment with respect to change management and leadership practices are inclusive and engage

participatively with the organization’s priorities. Frank Horwitz, Business Report, Monday, September 8 2008

The GMS Culture:

The positive aspects of our culture are that personal accountability and integrity are high as individuals are clear on what has to be done.

Individuals have a can do attitude and a strong sense of urgency in carrying out tasks.

The less positive aspects are that the commitment and contribution of

employees are not recognized.

A Healthy Culture

Teamwork

Openness to Change

Personal Accountability Mutual Respect

Openness & Trust Caring About Customers

Innovation

Healthy State of Mind /

Higher Mood State

Gratitude

Appreciation Curiosity

Insight – Creativity

Optimism – Hopefulness Sense of Humor


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There is less of an emphasis on involving and engaging people at all levels.

Innovation and continuous improvement are not yet embedded as a way

of working.

Building a leadership culture is a reflection of the shadow of the leader.

“Leadership has to involve other people. It has to involve motivating them to achieve their vision. Now, to do that requires a special state of mind. If you are

really going to achieve something great, you have to be ready to be wrong, because leading, when it tends to be useful, involves risks. You are not always right and can’t worry about that. And looking good is a time related issue. As we have shorter time to do things, looking good versus really achieving vision may

be contradictory.” Roger W. Johnson

Chairman, President and CEO of Western Digital Corporation

Leadership, Teambuilding and Culture Change

Senn Delaney Leadership

“ Building an institution with a healthy culture has to be a huge part of whatever you do as a leader.” Alair A. Townsend, Publisher, New York Business Journal

Leaders that are aware of the power of culture realize that when new initiatives

are being introduced, the strength and style of their culture can actually support the change efforts or work against them as a significant barrier. Hence the culture halts the forward progress of the initiative. The same initiative in another culture gets implemented quite easily.

The power of culture shaping in the organization is to support new initiatives and changes.

Since culture can significantly determine the success of a given initiative, it is important for those in leadership positions to understand the culture they have,

its strength and style, and its’ potential to either support or block an upcoming change initiative.

Effective leaders shape the culture of their organizations through their actions, attitudes and the shadow they cast influences everyone around them.

Leaders must behave the way they wish their followers would behave.

The shadow they cast is very powerful within the business world and has a great

influence on those around them. The leader of a group casts a shadow that influences the group culture. The shadow may be weak or powerful but it always exists.

A healthy culture also cultivates leaders that lead by example and not words.

So leaders have to lead by example and be aware of the impact they create.


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b) Factors that cause change:

Whenever the business environment changes significantly, through for example; increased competition, technological breakthroughs or an economic downturn, the organization will have to respond accordingly in order to survive. Companies

often respond to industry or environmental changes with a new competitive strategy along with an appropriate reorganization.

New strategies need to be developed and implemented to meet increased competition and changes in the market. The challenge of change is to shift the culture into alignment with the new strategy.

Whenever an organization faces changes in its business environment, survival and prosperity depend on its ability to quickly change direction. Generally this involves a shift in strategy followed by changes in organizational structure.

As new strategies are developed and new structures put into place, many employees resist the new change and are reluctant to embrace it. These cultural

habits and methods of working and managing are often at odds with the new strategy and organizational structure. While the goals have shifted, the old ways of working and doing business still exist. As a result, conflict and tension arise,

aggressive behaviour , frustration and lowered morale prevent the organization moving toward its goals, which could lead to new strategies and initiatives being ignored or sabotaged and will generally result in failure.

A need for innovation is clear, but the culture of the organization is resistant and reluctant. Change in response to competition is imperative, but the culture within

the organization resists it. Although a strategy is developed to provide integrated solutions to the business, the culture hinders the progress of it. In an organization that is out of alignment, more and more effort is required to make

things work as the organization struggles to meet the challenges of today with the attitudes of yesterday. Winning Teams Winning Cultures, Larry Senn, Jim Hart

Reorganization or restructure in any organization creates thoughts of doubt and uncertainty. The possibilities of redundancy and retrenchment are increased

drastically and the fears of being in a jobless situation are rife amongst employees. If change is not communicated clearly to all, customers, suppliers and employees who are affected, resentment will grow if people are excluded.

Cost is a huge factor which drives change and offers the biggest potential benefits. The cost of not changing can result in the loss of sales and customers

and eventually laying off employees. As the business aims to boost and increase


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profit and sales, there is a greater need to improve efficiencies. Improvement initiatives result in new ways of working.

In order for the business to operate more efficiently, the Lean and Six Sigma

approach and methodologies have become more prominent. Operational Excellence (OE) has become globally recognized and is used as an improvement initiative to increase outputs and efficiencies. Operational Excellence is also a

cost saving initiative for the business, but can be viewed as a technique to replace employees, with positions becoming redundant with the leaner way of operating in the business.

Change is one of the most pressing challenges the world faces and GSK wants to be part of the solution and has launched the OE programme across the site to support global changes. Operational Excellence helps to cut costs and improve efficiencies which allows it to remain competitive and the leader in the industry.

Through the implementation of the lean methodologies, the overall performance of its manufacturing processes are optimized to meet the increasing customer demand. Lean and Six Sigma are complementary principles, and if applied correctly bring about long - term cost – saving initiatives in the business. Its

competitiveness is enhanced through the successful use of Operational excellence principles. Operational Excellence is a process driven, strategic business approach to improving manufacturing operations which allows the

business to respond to the ever changing demands of the industry and the global market. Six Sigma in place and in use provides a better product or service, faster and at a lower cost than the competition.

Continuous innovation is a critical success factor for the business to grow. Change is the price of survival. Continuous renewal of organizations is a prerequisite for the business to survive.


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c) The change process:

Planning for change: A Diagrammatic representation

Define the

change

Assess the

climate

Identify the change

approach

Develop target

readiness

Create culture fit

Build agent capacity

Develop

reinforcement

Strategy

Build

communication plan

Prioritize action

Plan

ImplementMonitor

GSK’s Accelerated Change Methodology

Winning Teams Winning Cultures, Larry Senn, Jim Hart


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The journey


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The journey continues

See addendum 1: The GMS Culture Change journey Effective Implementation of change:

Once the need for the change has been determined, there are several steps that will reduce resistance and aid in the implementation.

They are: Communicate to all role players Exhibit commitment to the change

Listen to people’s concerns Involve and engage as many people as possible

Communicate, communicate, communicate Weed out hard-core resistors Provide feedback

While there is no guarantee of success, the leaders who understand their own reactions to change and are able to anticipate their group’s resistance to

proposed changes, can develop an implementation plan that is more likely to succeed. Leadership, Teambuilding and Culture Change, Senn - Delaney Leadership


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d) Accelerated Change Management and the challenges faced by management:

Change in organizations is happening at an unprecedented pace, leaving people uncertain of the rules, confused about procedures, and anxious about personal security and well-being.

The ability to manage change has become a vital leadership skill – perhaps the only real definition of leadership.

Successfully leading change is a tremendous challenge since a natural response to change is resistance.

To become effective leaders and change agents, we must learn to manage change by understanding and anticipating resistance and knowing how to

eliminate the barriers it can create.

Change is an emotional issue for all as people face uncertainty, have self-doubts and fears.

Change is uncomfortable and forces people into the unknown.

Implementing a change is as much about understanding the emotional basis of resistance as it is planning the actual change.

“If we want to change a situation, we first have to change ourselves. And to

change ourselves effectively, we first have to change our perceptions.” Stephen R. Covey

“The change is going to be so rapid that as business leaders, we have to find out how to make change a satisfier rather than a dissatisfier. And I believe that’s one

of the major challenges we face. The future leaders of all institutions who figure out how to encourage their people to change – have them feel good about change – are the ones who are going to come out ahead.” David T. Kearns

Former Chairman and CEO of Xerox Corporation

Globally and in the South African Corporate world it is evident that change has become inherent as an on – going process and thus the need now arises to

equip both the Leadership and the workforce to manage these processes.

A leader is a change agent, and an effective leader needs to know how to implement change in a way that helps people move past their uncertainty and

resistance in order to approach the change willingly with an open mind. Leaders


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need to understand their own level of openness to change. How your employees in your organization respond to change is a reflection of you and your mind set.

The essence of the leadership role today is to transform and perform at the same time and is especially relevant during times of change, growth and restructuring where highly effective transformational leadership is required.

“Progress always involves risk, you can’t steal second base and keep your foot on first.” Frederick Wilcox

“Don’t be afraid to fail. Don’t waste energy trying to cover up failure. Learn from your failures and go on to the next challenge. It’s ok. If you’re not failing, you’re

not growing.” H. Stanley Judd

The literature reference list: Leadership, Teambuilding and Culture Change by: Senn – Delaney

Leadership

Winning Teams Winning Cultures by: Larry Senn and Jim Hart Lean Six Sigma by: Murray Adams, Mark Kiemele, Lee Pollock, Tom Quan Organisational Behaviour by: SP Robbins, A Odendaal and G Roodt


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Chapter 3

Data Collection, Analysis and Interpretation

3.1 Introduction

The significance of the survey aims to identify the burning platform of the staff based at the GSK Cape Town site.

Data was collected by means of a climate survey which was handed to staff in person from the administration and production divisions within the GMS Cape Town site.

Distribution:

A total of 20 surveys were hand distributed to staff from the administration and production divisions comprising of 8 sections with 34 questions.

The return and collection date for the completion of the survey was stipulated in the cover letter which accompanied the survey.

Of the 20 surveys that were distributed, 11 staff members completed it, a response rate of 55% which is relatively low. The reluctance from staff to complete the survey can be attributed to the current situation within the

company where staff are of the opinion that a survey does not make any real difference to the current situation within the company.

30% of the respondents are male and 25% are female. 30% of the respondents are currently based in production and 25% are currently based in the administration division.

The data collection and analysis will provide management with much needed information to accurately address the concerns of staff.

3.2 The design of the survey

It will be accompanied by a cover letter which provides an indication of the

purpose of the survey.

The dimensions of the survey which comprises 8 sections are as follows:

Section 1:

Biographical Data:


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Section 2:

Company Dimensions: Vision, Mission and Values

Section 3:

Management

Section 4: Company Culture

Section 5:

Diversity

Section 6:

Gender

Section 7:

Racial Equity

Section 8:

Employment Equity

A copy of the survey and the cover letter which was distributed is attached

as Addendum 3 and 4.

3.3 Data Analysis:

The analysis of the data collected shows the following results:

Section 1: Biographical Data: The percentage of female respondents totaled 25%, the male respondents

totaled 30% and the total percentage of staff that did not complete the survey were 45%. The distribution amongst male and female respondents were fairly equal. All the racial groups were representative in the sample and each racial group listed their mother tongue as the language of preference.

The years of service with the company ranged from 1year to 38 years of service. All divisions within the organization were representative.

Male Female No response Admin Production

30% 25% 45% 25% 30%


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Section 2: Company Dimensions: Vision, Mission and Values: The majority of respondents identify with the vision, mission and values of

the company.

Disagree Agree

9% 91%

Section 3: Management: The majority of respondents have a positive response toward the sites’

management approach.

Disagree Agree

45% 55%

Section 4: Company Culture:

With regard to association, job expectation and performance, the minority of respondents is in disagreement with the statements on the survey and the majority is in agreement.

Disagree Agree

18% 82%

Section 5: Diversity: The respondents view on fairness and equal opportunity show that the majority

is in disagreement.

Disagree Agree

64% 36%

Section 6: Gender:

The respondents view on gender show that the majority are in agreement with the statements on the survey that women are not treated fairly and do not have equal opportunity.

Disagree Agree

45% 55%


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Section 7: Racial Equity: The minority of respondents view race as an issue within the organization.

Disagree Agree

55% 45%

Section 8:

The majority of respondents view appointments as unfair and discriminatory.

Disagree Agree

55% 45%

3.4 Data Interpretation: The response rate from males in production and females in administration is

depicted below.

3.4.1 Major trends:

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Males

Females

Non-response

Production

Admin


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The staff at the GSK Cape Town site strongly identify with the company’s vision, mission and values and are aligned with the objectives of the

company. The staff has a strong association with the company image and is aware of what is required of them with regard to performance and expectation.

Due to the recent increase in appointments of African/Black staff, it has

not been well received by the staff at the GSK Cape Town site. The company has a legal obligation in terms of the employment equity act to fill positions for previously disadvantaged individuals which has created

tension within the racial groups.

0%

20%

40%

60%

80%

100%

Agree

CompanyVision

CompanyCulture

0%

10%

20%

30%

40%

50%

60%

70%

Disagree

Diversity

Employ.Equity

Racial Equity


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The management team at the GSK Cape Town site is however held in high

regard by more than 50% of the staff. It is evident from the results that the management teams understands the needs of staff and appreciate their efforts. The management teams are all aligned as they are able to

provide the staff with clear goals and direction.

3.5 Summary

The data collection and analysis looks at the information needed to be identified, which leads the researcher in the direction to identify key areas that need to be attended to.

The research instrument design is important to get the correct information of the perception of all staff at the GSK Cape Town site. The method used was a formal method and all staff was clearly briefed on what was expected of them during

the information gathering process. The information would assist the researcher to look into certain directions that

was not identified earlier on in the research.

0%

10%

20%

30%

40%

50%

60%

Agree

Management


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Chapter 4

Findings and Recommendations

4.1 Introduction

This chapter will look at all the results received and analysed and a conclusion will be drawn on the interpretation of all the relevant information collated.

The survey showed little success due to the lack of support and approval from the site leadership team members. The sample size was not broad enough and

all the role players within the organization were not reached. The participants were reluctant to participate though they were assured of anonymity. With a greater number of participants, a more accurate account of the climate within

the organization could have been been concluded. The few respondents who opted to participate were however willing to assist with their time to complete the survey which provided some valuable data for future research.

The results that were extracted from the analysis clearly show that the staff understand their role in the organization but do not accept the transitional period

in terms of employment equity and the expansion of a more diverse culture. The results prove that the success of any change management initiative needs the understanding and participation from all the role players directly involved and

affected by the change to be a success.

4.2 Conclusions

4.2.1 Positive Findings

There are a host of positives that could be taken from this research. It has created a foundation which needs to be built one step at a time.

From the company perspective the learning’s for future projects are well noted and planning for change will be executed differently with communication and

participation as key drivers for successful implementation. The company has continuously strived to remain a competitive force within the industry by accepting the need for change and embracing the challenges it faces nationally

and globally.


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4.2.2 Negative Findings

The business is under constant pressure to comply with legislation and global initiatives which is the driver of change at the Cape Town site. These external

pressures create a degree of fear and uncertainty amongst staff which directly impacts the productivity and morale of the staff.

4.3 Recommendations

Communication is key to successful implementation of any change initiative. Planning for change is critical to the business where readiness for change needs

to be assessed. All the role players should be consulted and engaged at every level to ensure a smooth implementation of the process.

4.4 Possibilities for future research

Future research is possible as the information that was gathered was extensive

as it broadly explored the need for change. Transformation and change within the organization will continue to remain a challenge to the management team should a proper sensitivity analysis not be conducted prior to implementation in

the future. An effective communication strategy needs to be developed to further harness multi cultural inter relationships.

4.5 Summary

It is evident from the research that the need for change within the organisation

has become the norm. Though change brings about fear and uncertainty amongst staff members, it allows the business to remain competitive. An effective strategy for implementation of change needs to be developed which will

cause minimal turbulence amongst staff in which the benefits can be derived sooner rather than later.


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REFERENCES

www.is4profit.com/business-advice/employment/managing-change.html

www.integratehr.com/solutionsculture

Senn – Delaney Leadership Group Richard Brown, CEO, EDS Frank Horwitz, Business Report,

Monday, September 8 2008

Roger W. Johnson Chairman, President and CEO of Western Digital Corporation

Leadership, Teambuilding and Culture Change

Senn Delaney Leadership Alair A. Townsend, Publisher, New York Business Journal

Winning Teams Winning Cultures, Larry Senn, Jim Hart

GSK’s Accelerated Change Methodology

Winning Teams Winning Cultures, Larry Senn, Jim Hart Stephen R. Covey

David T. Kearns

Former Chairman and CEO of Xerox Corporation

H. Stanley Judd



http://www.integratehr.com/solutionsculture


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research project - organizational change