Seminar Paper, 2005
16 Pages, Grade: 1.5
BACKGROUND OF THE CHANGE
Comparison of both Cultures
Way of Integration
ANALYSIS OF THE CHANGE PROCESS
Strengths ofTransformational Change
Weaknesses ofTransformational Change
In the following research essay, the take-over of ARAL by the German BP will be analysed. Furthermore, the case will explore the assumption of ‘transformational change’ as the best way to achieve successful change. Firstly, the background of the change will be explained. Afterwards a short comparison of both cultures will illustrate the differences of the companies. Overall, the change process will be explained and evaluated under the aspect of organisational change management. In order to expose the case, theoretical concepts and frameworks will be used. Finally, the way in which BP implemented successful the change will be linked to the set question of‘transformational change’.
In order to understand methods used during the change process, its background of the transformation will be described. In this regard, the culture of both companies will be compared. Furthermore the change process and its implementation will be described.
In 2001, one of the smallest companies on the German market (BP) - but with an international company in the rear - took over the market leader (ARAL). (Guardian, 2001) The ‘green one’ (BP) bought the ‘blue one’ (ARAL) - not unusual in a global market. Notable is, that ‘green’ is buying ‘blue’ and gets ‘blue’, which is different from other take-overs, acquisitions or mergers. Because of a high market share (25.5%) and a brand awareness of 98% on the German market the brand ARAL still exists. (Aral, 2004WDR, 2004)
Uncertainty, fear, and mistrust aroused within ARAL and BP. Because of rebranding almost all BP stations and relocation of BP managers to the ARAL headquarter, it seemed to be a reverse take-over or share holder-change. But BP wanted to implement international current processes. (Scholz et al, 2004)
Within the last 50 years BP took over a few companies which provided BP a lot of experience in change processes. (BP, 2004a; Datamonitor, 2004)) Noteworthy is that BP had already changed his corporate culture in 1990. (Garratt, 1991) Through the take-over BP became number one in the European petrol station market. (WDR, 2004)
Immense cultural differences of both companies appeared during the take-over. The worldview of BP is international-orientated and employees’ identification is focused on the company. In comparison, ARAL is a typical German company and employees identify themselves with the brand but less with the company itself. Values and manners inside the companies are also contrary. The British self-responsibility and simple organized structure met the German controlled and hierarchical structure. British informal behaviour had to be matched with German formal behaviour. BP is looking for simple, fast and flexible solutions whereas ARAL prefers a top-down- management. (Scholz et al, 2004; BP, 2004b) In spite of extreme differences the process of integration proceeded without big problems. (Scholz et al, 2004)
Next, will be described how the integration was organized and accepted.
The internal integration process of two companies has several aspects, especially in terms of take-overs or mergers. According to its volume, the human resource and cultural aspect will be emphasized.
BP used internal and external change agents to promote the change. Over an 18 month period numerous activities were implemented, such as: two big workshops with the ‘top-200-managers’; kick-off-events for all employees; and monthly “lunch & talk” sessions were established to support the integration. (Quasar Communications, 2004) Key parts of the process were communication and information. All unsecured aspects can be resolved through transparency, lasting and regularly communication. (Preston, 2004) Employees who are not informed, voiced or participated will lose their motivation for change processes. In order to prevent it, the board of direction introduced subtly differentiated measures as well as forums of integration. (Scholz et al, 2004) Also transparent information was released by using internal newspapers and intranet. (Quasar Communications, 2004) Targeted were the connection of both parts; exchanging of experiences; informing about the integration process; and building up a community. The main goal was to establish trust in the company. (Scholz et al, 2004)
The integration process was divided into two parts. The first part was formed mainly through knowledge exchange. Meetings were established to answer questions about culture, strategy, structure and about the future. These were set up with the motto “strong2together” and “B1”. (Scholz et al, 2004) Methods of the exchange process were ‘Strengths-orientated Management Approach Appreciative Inquiry’1, ‘Open Space Technology’2 and ‘Whole Scale/Real Time Strategic Change’3.
Events and presentations were communicated in an informal and personal way. (Kommunikationslotsen, 2004)
Between six and eight months later, the second step was introduced. Because of the specific methods during the first period, trust in the company and in the future was established quite fast. Also insecurity and confusion were reduced. (Quasar Communications, 2004) Confidence in the project was used to set up action; the examination of a unique strategy was targeted next. They began to discuss strategic approaches in small groups and outcomes were communicated to all participants. (Scholz et al, 2004)
One of the enormous outcomes of the 18 months was a completely new way of communication, transparency and understanding. Many ideas were developed by participants and contents were transferred as a result of efficient communication. The main aim was not to put the BP culture over the ARAL culture, rather to establish a new culture. (Scholz et al, 2004) Space, including methods and processes, were put at disposal to create a new identity with own expressions. The process of integration was highly successful because of the ‘Open Space’ form; the acceptance of different views; and the space for communication. In other words: ‘community building first - decision making second’ (Scholz et al, 2004, p5) appeared as a leitmotif.4
Broadly spoken, the cultural change introduced by BP was highly successful. A significant integration process and BP’s change experiences were the reasons for it. The transformation of two cultures into one new culture was communicated to all members - managers as well as employees.
Wilson (2000) developed a model to allocate various theories of change within two main dimensions. In order to position the case, it has to be examined if it was planned or emerged (Exhibit 1). Because of the described background of the takeover, it can be categorized as planned. Planned change strategies are those processes which occur in a controlled and smooth transition. (Kewell, 2004) Secondly it has to be examined if it was a process or an implementation. (Wilson, 2000) According to the case it can be regarded as implementation.
illustration not visible in this excerpt
Exhibit 1: Adapted from Wilson (2000)
The above assumption of planned implementation leads to the ‘Force Field Model’ of Lewin (1951). He produced a model, which identifies features of driving and restraining forces. (Wilson, 2000) Adapting to the case, a new personal structure due to the combination of ARAL and BP employees and changing attitudes through developing a new identity are forces which support change. Additionally, a social transformation because of establishing a new culture is a supporting power. Forces against change are fear of failure; loss of status and insecurity. Like Lewin mentioned, the elimination of restraining forces rather than supporting driving forces has to be centred. (Wilson, 2000) Reducing fear and insecurity before changing matters was clearly targeted by BP.
1 Strengths Orientated Management Approach Appreciative Inquiry' developed by Coperrider & Srivastva, 1990
2 Open Space Technology developed by Owen, 1992
3 Whole Scale/Real Time Strategic Change developed by Dannemiller, 1993
4 Because of described facts how the take-over was organized, it seems to be merger which is also stated in the leitmotif “strong2gether” or “B1”. It also was communicate through BP as a fusion. From a legal, financial and economic viewpoint it is still a take-over.
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