Change Management  

  Structure  

  Structure  I

  Executive Summary  1

1.  Introduction: The Necessity of Change Management  3

2.  Drivers to Change  3

2.1  Environmental Change  4

2.2  Intra-corporate Change  4

2.3  Changes among Employees  4

2.4  Changes among Managers  4

3.  Definition of Change Management  5

4.  The Concept of Change Management  6

4.1  Implementation Process  6

4.2  Practical Realisation  7

4.2.1  Development of a Change Management Plan  7

4.2.2  Elements of a Change Management Plan  7

5.  Principles and Requirements of Change Management  8

5.1  Targeted Management  8

5.2  Employee Participation  8

5.2.1  Employee Training  8

5.2.2  Teamwork  9

5.3  Resistance  9

6.  Change Management in Practice  10

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  Change Management  

7.  Critical Review  14

7.1  Success Factors for Change Management  14

7.2  Success Barriers for Change Management  14

8.  Strengths and Weaknesses of Change Management  15

9.  Conclusions and Outlook  16

  Bibliography  II

Appendix III   

10.  Instruments of Change Management  III

10.1  Overview  III

10.2  Selected Instruments  III

10.2.1  Project Management  III

10.2.2  Workshop  III

11.  Cultural Change  IV

11.1  The Action-Research Approach (Robbins)  IV

11.2  Corporate Change in Eight Steps (Kotter)  IV

11.3  Architectural Change Approach (Tomasko)  IV

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Change Management

Executive Summary

The drivers to change business processes are multi-faceted: On the one hand environmental and intra-corporate changes, on the other hand changes among employees and managers.

Change Management (CM) is a concept, which is implemented to the organisation from outside. The objectives of the change are often developed from external advisors (change agents) whereas the employees are involved on a limited scale with the conversion of the concept. The implementation process can take place in seven steps leading from a deeper analysis to cultivation of new behaviour. By this approach it is possible to “ingrain” the change in social standards and values. An important success factor is the development of a Change Management Plan, which covers measures and regulates, who is responsible for their conversion.

Principles and requirements consist of targeted management and participation of employees using training methods and teamwork in order to minimise the fear of employees concerning new tasks and increase thus their willingness for the change. In order to avoid resistance among the employees they should be challenged, but not overstrained by the change. In this connexion it is crucial that resistance can be expressed before decisions begin to take effect.

By applying a recent study the reasons for change projects in practice were discovered. A clear majority of the surveyed companies had the objective to restructure and reorganise their business. It was very interesting to see that the top-management plays the most important role whereas the employees, who are the most concerned participants by the realisation of the change, are almost the least important. In summary not all persons within an organisation are concerned equally by the change, equivalent important for the change and adjusted similarly to the change.

The two dominating Change Management instruments are workshops and project management. Substantial success factors regard the controlling and quantification of measurable criteria, intensive communication of aimed objectives, the definition of clear limits and time pressure. It proved in practice that change projects, which were accomplished under high time pressure, were substantially more successful as such, which had more time available. The largest success barriers can be referred to employees. Conflicts of interest between participants or lack of commitment of the executive committee are further negative influencing variables.

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Change Management

In many cases discrepancies in the area of the corporate culture appear, which lead to the failure of change projects. Therefore it should be not neglected to include on cultural change management. If the selected strategy cannot be carried by the prevailing culture, the company does not come around a cultural change.

The Action-Research-Approach can be seen as the basis model, in which the inclusion of the employees is recommended. Contrary is the Architectural-Change-Approach, which is expressing a more radical change.

Finally, an essential strength of Change Management is the targeted top-down approach relating to the objectives of the company. A weakness can be the employment of external change agents, because employees feel frequently patronised by external advisors. In this context it is recommended to integrate the employees more actively in order to achieve a successful progress of the change.

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Change Management

1. Introduction: The Necessity of Change Management

Charles Darwin’s "The survival of the fittest" describes that only the life form can survive, which is able to adapt permanently to changing environmental conditions. (Thomas, 2006) Darwin’s theory is quite transferable to the economic system, because "processes of change take place on all levels of economic life." (Reiss et al, 1997, 7) Therefore organisations must undergo a constant adjustment and change process in order to react fast and flexible to market changes and thus to survive.

This report is concerned with the role of Change Management (CM) and points at the way of a successful implementation in a business. In this connection it is important to keep in mind that each reorganisation is a singular project, which needs to be adapted to the specific situation and characteristics of the employees. In addition successful change management causes exceedingly the personal commitment of the executives, who must be also willing to change and give up old ways of procedures and thinking.

Following this introduction various drivers to change are characterised. Next a literature review with definitions to the topic of Change Management is presented. Described in chapter three is the concept of Change Management more in detail with organisation as well as applications and instruments. Here the emphasis is on the implementation process and its effect on the employees concerned by the change. Thereby the basic principles and requirements of Change Management are demonstrated. Subsequently, we take a look in the practice, whereby the meaning of Change Management is analysed on the basis of a recent study. In a next step appropriate Instruments of Change Management are represented followed by three theoretical approaches to Cultural Change. A critical review regarding strengths and weaknesses as well as an outlook will conclude this report.

2. Drivers to Change

Today we live in an ever faster changing world. Individuals must be able to adapt to new conditions consistently. Businesses see themselves suspended to an increasing change pressure. Some of the multi-faceted reasons for these changes are represented in the following.

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Change Management

2.1 Environmental Change

In particular the increasing dynamics within the economic and technical area, the complexity on international markets strengthened change pressure on businesses. Within many market segments cost pressure rises both by the decrease of natural resources as well as the increase of commodity prices. In addition international competitors producing with more favourable cost structures contribute significantly to a further fall in prices. (Füser, 1997)

2.2 Intra-corporate Change

Increasing speed, circulation and efficiency of modern information transfer leads to an acceleration of all business procedures. More and more companies have to find solutions for more complex and permanently changing tasks, which they need to master faster and more economically.

As a result the classical hierarchical organisation, which is for this speed too ponderous and inefficient is substituted by new organisational structures with broader hierarchy levels. (Doppler/Lauterburg, 1995)

Senior management delegates decision-making authority as well as responsibility and concentrates more on strategic tasks, as for example the co-ordination of all business processes or the creation of suitable basic conditions for successful teamwork. (Lott, 2001)

2.3 Changes among Employees

Socio-political democratisation can lead to higher self-confidence among many employees, who achieve a higher qualification due to improved training. That is why they rather question the formal dominance of their superiors. With continued specialisation employees may be put into the position to attain information projections/leads against superiors. Special conflicts can also arise from the fact that many employees possess strengthened psychological and physical stresses and strains caused by mechanisation and automation. (Olfert et al, 1999)

2.4 Changes among Managers

The functions in most businesses change, which results in different tasks for the management. Independent teams regulating everything at a lower level, shrink the significance of hierarchies and the influence of the top-management. Nevertheless process orientated companies can be managed not only through procedures, but need guidance by a qualified management.

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