Change Analysis at Central Linen Services

Contents

Executive Summary

Terms of Reference

Contents

Introduction

1 Organisational Culture at CLS
1.1 Organisational Culture 1982–1990
1.2 Barriers to Change

2 Features of and Choices for Change
2.1 The Change Kaleidoscope
2.2 Design Choices

3 The Stakeholders
3.1 The expected Situation
3.2 The desired Situation and Levers to influence Stakeholders

4 Leadership and the Role of the Individual
4.1 The Leadership Approach during the Transition State
4.2 Personal Transitions within the organisational Transition

5 Conclusion and Evaluation of the Change Management Process

6 Appendix
6.1 The Cultural Web
6.2 Types of Change
6.3 Stakeholder Analysis
6.4 Key contextual Features of CLS
6.5 The three Phases of Transition
6.6 The Transition Curve

7 References

Executive Summary

Central Linen Service (CLS) is a government-owned enterprise in Australia. After experiencing a severe decrease in performance, a change programme was initiated to turn the organisation around. Before the change, the organisation’s culture was characterised by bureaucracy and a high level of conflict among the employees. The Committee of Management was not able to give the workforce a sense of leadership. Control systems and routines were not performance orientated. In 1982 a new General Manager was appointed to act as a champion of change at CLS. He started immediately to transform the company into a commercial operation. Organisational restructuring went along a broad-scaled re-equipment programme. Decision-making power was centralised in the charismatic General Manager. Through policies of open communication and employee participation the culture was changed to enhance employee commitment and make the whole organisation performance orientated. Along this road towards the new organisation, a variety of barriers to change were encountered. The General Manager had to raise the awareness for change as well as gain management and workforce support for the change. The control systems at CLS had to be changed to give employees incentives for higher performance. In addition, the strong unions had to be convinced and gained as supporters for the change process.

Along the concept of the change kaleidoscope, Time, Scope, Readiness, and Diversity are identified as the most critical contextual features for the change process at CLS. CLS was in a crisis, which required fast implementation of change. The whole business concept, the values and beliefs, the ways of working had to be transformed. This made a vast and extensive change necessary. In addition, employees at CLS were not experienced in change processes, so the readiness for change had to be build up first. CLS was also characterized by diversity and a lot of subcultures within the organisation. Uniting the entire workforce towards a common goal was one of the major tasks of the General Manager.

The following design choices are identified to tackle the change process: The change path was that of a “revolution“ since a transformation had to be achieved in a single big step. The time horizon required a top-down approach for the change process. The communication and participation programmes were essential for the change. They raised awareness and employee support. Training programmes prepared the workforce for the change to come and reduced some of the anxieties not to be able to meet the new requirements.

The proposal for the creation of a new climate of technological change provoked different reactions among the various stakeholder groups at CLS. While the General Manager, customers, and employees were supporting this proposal; it met with resistance from the government, the unions, and senior management. It was therefore desirable to change the stakeholders’ attitude towards the proposal or alternatively reduce their influence in the change process. Even though the customers had low direct power, they could have been used to influence the government’s position towards the change. The General Manager made the proposal palatable to senior management and unions through a communication of the need for change as well as its benefits. He also reduced the influence of outside union officials by establishing a direct communication channel to the workforce.

The change process also put a lot of stress on the individual. States of low confidence during the change process had to be overcome. The personal transitions went parallel to the organisational transition. Meetings in which experiences could be exchanged as well as the General Manger’s ability to engage others with his optimism and vision for the future helped in this process.

Terms of Reference

This report was written as part of the requirements for 4MBS316 Management of Innovation & Change at the University of Westminster, London. It is assignment two of two and it was designed as an individual work. The module leader and seminar tutor is Alan David. The report was initiated to analyse Central Linen Service in regard to the fundamental changes it underwent over time.

Christian Scheffler Student No. 99158359D

8801 European Study Abroad

Introduction

In the time period between 1982 and 1990 the Australian government-owned Central Linen Service (CLS) underwent some profound changes. This report provides an in-depth analysis of this change process. Section 1 focuses on the organisational culture at CLS. In order to understand the extent of change at CLS the organisational cultures of 1982 and 1990 are contrasted against each other. This is followed by an analysis of the barriers to change present in the old culture as well as the methods employed to overcome those barriers. Section 2 then uses the concept of the change kaleidoscope to identify those contextual features at CLS that played a critical role in the change process. An analysis of the design choices indicated by the contextual features as well as the implementation of those choices is also included in section 2. The next section concentrates on the different stakeholder groups and their involvement in the change process. Special emphasis is put on likely and desired stakeholder reactions in the example of the creation of the new climate of technological change. Leverage points to influence stakeholder positions are identified and applied to the CLS case. The last section discusses the leadership approach adopted at CLS in respect to the processes of organisational and personal transition. Finally, a conclusion of the main findings is given together with an evaluation of the change management process at CLS.

1 Organisational Culture at CLS

In order to acquire a feeling for the extent of change CLS underwent, it is helpful to analyse the different organisational cultures before and after the change. An organisation’s culture can be described as the basic assumptions and beliefs within an organisation and the organisation’s view of itself.¹ The cultural web provides a useful tool to assess the different cultures.

1.1 Organisational Culture 1982–1990

When the new General Manager took over in 1982, CLS was in a crisis: it had recently experienced a 55% increase in costs combined with a 23% decline in productivity.² The old technology the employees had to work with was symbolic for the whole organisation: it was old, not well functioning, without verve. Power was exercised through a Committee of Management. This committee was not only exposed to the well known group- dynamic processes in decision-making but additionally in a conflict of interest between CLS and a frozen food factory also in its control. Furthermore, labour unions played an important role in CLS’s culture. Through their consent and dissent important business decisions could be disrupted. The management at CLS was fragmented and conflicts arouse frequently. Supervisors did not consider themselves as part of management but rather as part of the workforce. The whole climate was not performance orientated. This becomes evident when analysing the promotion system at CLS. Promotion was based on mere seniority, giving no incentive for employees to increase work performance. Conflicts between the different layers in the hierarchy of the company were typical because the flow of information was insufficient. Overall, the organisation was very bureaucratic. It was considered more a “public liability” than a successful operation. The climate of decreasing performance weighed heavily on the workers’ motivation.

Under its new champion of change, the General Manager, the organisation’s culture transformed radically. The new General Manager streamlined the operations and transformed CLS into a commercial operation. The slow, government owned enterprise was transformed into a high-tech automated linen service. A modern vehicle fleet and state-of-the-art equipment replaced the symbols of old technology. The stories of the turn-around of the company and its world record became motivators for the employees. The power is now centralised in the General Manager and the interim board of management. To do away with conflict within the organisation, information is now passed on directly to all the employees. Teamwork is supported and managers are encouraged to engage in “management by walking around”. There is now a culture of change to adapt to environmental changes. Training programmes have been initiated and promotion is now based on merit to give employees incentives to increase performance. There are council meetings where employees from all levels in the hierarchy come to aid cross-functional information exchange. This eliminates some of the unconstructive labour union interference while still giving the workforce influence in the running of the company.

An illustration of the different elements of the cultural webs for 1982 and 1990 can be found in Appendix 6.1. It shows how the different aspects of organisational culture interact with each other to shape the paradigm, the common assumptions and believes held about the organisation.

1.2 Barriers to Change

Naturally, because change always requires effort and leads to the abolishment of some routines that had been established for a long time, there is resistance to change. Armstrong (1999) points out that an organisational change programme has to focus on specific parts of the culture.³ In order to reform CLS, the new General Manager had to tackle a variety of aspects of the prevailing culture. Armstrong also explains, why people might resist change.⁴ He mentions “the shock of the new” and uncertainty, often caused by a lack of information. The General Manager tried to make the climate for change favourable from the beginning by informing the whole workforce extensively about every step of the process.

The General Manager’s vision was in unison with the recommendations of the Touche Ross report of 1982:

1. Improve the structure and quality of management.
2. Adopt a more appropriate financing arrangement.
3. Introduce new technology into the workplace.

In order to increase the effectiveness of management the General Manager first had to eliminate personal conflicts within the management group as well as introduce a climate suitable for change. Managers as well as supervisors that did not agree with the new management style were relocated to other departments. This was accompanied by a reconstitution of management.

When new technology was introduced to the company, CLS had to deal with competence-fears of the employees. To reduce concerns about the ability to acquire the necessary skills to operate the new machinery, extensive training programmes were initiated.

The barriers and facilitators of change can be summarised in a force-field analysis:⁵

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Illustration 1-1

The force field analysis illustrates the resistance that was encountered during the transition as well as the forces that aided this process. Looking back one can say that management was one of the major barriers to change. A lot of the managers had worked for CLS for many years, had secure positions and over time developed certain routines of doing the work. The new change process threatened those routines. Management was streamlined and new methods of management introduced. The fear of many managers of losing power and the reluctance to adopt new working methods had to be overcome. The General Manager’s powerful and dominant character as well as his policy of free information exchange and open communication helped the senior management to adapt to the change process.

In order to be able to compete with private enterprise, the work ethic had to be changed towards a more performance-oriented climate. The old control system of promotion on seniority was insufficient for this goal. A new system of promotion on merit was therefore introduced. The General Manager’s ability to inspire was important to make employees enthusiastic for the new company and the new working atmosphere.

Under the General Manager’s new system the unions were less influential in the running of the company and therefore feared that their power would decrease, the unions were another force working against the change. The General Manager overcame this by solving problems quickly internally without needing to bring in union members, effectively reducing their influence on the workforce.

2 Features of and Choices for Change

2.1 The Change Kaleidoscope

In 1982 the need for change was obvious. The decline in performance, shown by the simultaneous increase in cost as well as decrease in productivity, put the organisation at risk of going out of business. Illustration 2-1 is a model of a change kaleidoscope as discussed in Balogun and Hope Hailey (1999). It presents a framework to illustrate the key change context features.

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Illustration 2-1

As mentioned above, CLS was in a deep crisis when the new General Manager took over. Hence time was an important factor, which made it a critical contextual feature. The scope of change is a very wide one. A view of the different types of change (Appendix 6.2) shows that since basically a whole new organisation was built on top of the old one, the scope of change can be called transformational. The change process was carried out in one major step, rather than incrementally. Therefore we can speak of a revolution in terms of change at CLS. The workforce was the only asset worth preserving during the change process. Neither did the organisation have a good reputation that had to be maintained nor was there a history of best practices or a stock of invaluable resources that were essential to the operation. The diversity of CLS on the other hand proved to be a critical factor in the change process. The atmosphere amongst workforce, supervisors and management was hostile and full of conflict. Even management itself was fragmented. The aim therefore was to unite the workforce toward one common goal. Unfortunately the capability to put this change process into action was very low. In the past, the organisation was very static. As many other government-owned enterprises it had no history of change. So this ability to handle change had to be laboriously acquired through training programmes and the help of the General Manager. Nevertheless the fact of being government-owned was of advantage in terms of the capacity for change. The funds were not unlimited but the competent authority was soon convinced of the need for change and provided the necessary financial resources. On the human resource level, the change process still put much stress on the workforce because the normal day-to-day business had to be maintained during the transition stage. The training programmes that prepared the employees for the new technology as well as other organisational changes also helped to increase the readiness and motivation for the change. The General Manager’s famous speech in front of the whole workforce made everyone aware of the extent of change CLS was about to encounter. He also depicted that he had decision-making autonomy as well as power over the change process and CLS’s operation. This gave the employees a dominant figure that worked as a guiding light through the troublesome transition period while it also ensured the General Manager’s gain of the support of major stakeholders within the organisation. Through open communication he gained union support and the promise of new technology made the employees enthusiastic for change. Appendix 6.3 is an analysis of the major stakeholders in CLS. The table shows the relative position of the most important stakeholders in terms of their influence on the change process and their attitude towards it. The arrows indicated desired changes of the position of the individual stakeholder groups. An overview of the contextual features of CLS can be found in Appendix 6.4.

In order to identify which of the contextual features mentioned above are most critical in regard to the need for change, it is important to measure their relevance to and influence on the change process. It can be said that the following contextual features are especially important for CLS:

1. Time
2. Scope
3. Readiness
4. Diversity

The crisis in which CLS found itself in 1982 made time a crucial factor. Since CLS’s business concept had to be changed fundamentally, CLS had to undergo a vast and extensive change. The readiness for the reforms to come had to be increased in order to help employees cope with the change. Finally, the often deconstructive diversity and subcultures within CLS had to be removed to create a united company spirit and an atmosphere of change.

2.2 Design Choices

After the critical contextual features are identified, the design choices have to be set for the change process. Many options are determined by the contextual features.⁶ This section deals individually with the different design choices indicated in the change kaleidoscope and how they were put into action during the transition at CLS.

2.2.1 Change Path

CLS’s situation in 1982 and the scope of change implied by this made a transformation of the company necessary. Because CLS was in a crisis and therefore the time horizon short, the organisation had to first improve its situation quickly through a single, big step (“big bang”). In order to be able to deal with the changing environment in the future, a culture of change was also desired. This implies incremental changes to the organisation over time. Therefore it can be said that initially, a revolution is required at CLS with a shift towards adaptation in the future.⁷ Training programmes for employees and the financial backing from the Australian government ensured that transformation could actually be achieved. The General Manager’s charismatic leadership also had an crucial impact on the success of the transformation programme.

2.2.2 Change Start Point

At first glance it seems obvious that at CLS a top-down approach for change was utilised. Indeed the General Manager’s vision and ability to inspire was one the major drivers for change. Because CLS was in a crisis, change had to beimposedthroughout the organisation.⁸ The advantages were that change could be achieved quickly and there was clarity about the change programme.⁹ Although the General Manager initiated the change originally, there was also employee participation throughout the process. In meetings¹⁰, problems that arose were discussed and then (if necessary) modifications were made to the process. This assured not only employee support for the change programme but the awareness of the management regarding problems that were out of reach of their executive perspective. The implementation of change was consistent throughout the organisation.

2.2.3 Change Style

The scope of change required for CLS made a combination of different change styles necessary. Education and communication played an important role in the change process. The employees had to be convinced of the need for change first in order to ensure their commitment and support for the change process. The crisis of CLS and the threat of downsizing helped to communicate this understanding. Training programmes and message boards informed employees of every development within the organisation. This was closely interlinked with a participatory change style. Since workers were closer to the day-to-day operations of the company it was important to incorporate their feedback into the change process and make modifications if necessary. One of the problems at CLS was the timeframe in which change had to be realized as well as the lack of leadership CLS had experienced prior to the appointment of the General Manager.¹¹ Therefore a change style ofdirectionwas also needed; the General Manager acted as a champion of change. He had the vision and it was up to him to make the majority of the decisions. Through this, change was achieved quickly and he was able to focus the organisation towards a common goal. The downside of this was that – as mentioned in the Case Study – a dominant belief system was imposed upon the employees. Any sort of conflict or critique of certain processes was eliminated. The fact that a certain amount of conflict can be healthy for an organisation was not acknowledged.¹² Rosenfeld & Wilson (1999) argue, for example, that a certain level of conflict within an organisation can stimulate creativity and encourage innovation.

2.2.4 Change Target

Attitudes, values, behaviours and/or outputs may all be the targets of a change programme.¹³ It was discussed earlier that a transformation of the company was necessary at CLS. This extent of change called for change intervention at all those organisational levels. The attitudes and values of all employees (including management) had to be changed towards a more performance oriented and customer friendly work ethic. It can be argued that a change in values is difficult to achieve and that it is easier to enforce new behaviours. Therefore, a new organisational system had to be introduced to improve the working methods at CLS. This may eventually lead to a change of attitudes and values in the workforce. A change in the nature of outputs can in turn change the behaviour of employees. The redesign of the company’s control system¹⁴ was a major step in that direction.

2.2.5 Change Roles

In the case of CLS, the General Manager was clearly the champion of change. He led the company through the change process from the very beginning to the end. Yet he alone would not have been able to manage the entire change effort on his own. He had to gain support for his vision in all parts of the organisation first. Through a reconstitution of management he acquired the support from his executives.¹⁵ While the managers were essential to the co-ordination of the various change aspects, general support of the workforce was also needed. This was achieved through open communication of the change programme.

Touche Ross Services Pty, an external consultancy group, aided the General Manager’s change effort. They drew up a report giving recommendations for organisational restructuring¹⁶. This not only provided a useful guideline for the change agents but also helped to convince senior managers and the government of the need for change.

2.2.6 Change Levers

For any change programme to be successful, interventions in all parts of the cultural web are required. The organisational structure was changed through a reconstitution of management and the introduction of employee committees. The introduction of merit-based promotion was an intervention into the control system at CLS. Yet the main task at CLS was to change the attitudes and values. In order to achieve this, message boards for better communication and training programmes were introduced to increase employee understanding of the need for change. Armstrong (1999) also suggests quality, customer service, and teamwork as possible levers for change. There is no indication in the Case Study whether any total quality or team performance programmes were planned at CLS but the passing on of information during the transition period and the widening of the product range shows a commitment to customer service.

3 The Stakeholders

In order to conduct a stakeholder analysis one first needs to define the term stakeholder. Freeman (1984) provides a short and precis e definition: “A company’s stakeholders are individuals or groups that have an interest, claim, or stake in the company, in what it does and in how well it performs.” Johnson & Scholes (1999) go even further and talk of dependence on the organisation. A customer, for example, might have an interest in the organisation but not actually be dependent on it.¹⁷ Thus Freeman’s definition might prove more useful.

Individuals and groups that can have an interest in any given company can be stockholders and employees (internal) as well as customers, governments, unions, etc. (external).

This section first analyses the major stakeholders at CLS. Next, likely stakeholder reactions will be demonstrated on the basis of the proposal for the creation of the new climate of technological change. This will be contrasted to the desired situation. Finally, levers are identified to achieve this desired state.

3.1 The expected Situation

In order for any change programme to be successful, there has to be support for this change throughout the organisation as well as any other major players that might influence the organisation’s operation. At CLS – as in every other company – there are various different groups that have a stake in its operation. Because CLS is a public enterprise it is the public that should have an interest in its operation. It is represented by the government. Then there are the employees and the unions. Management and the General Manager form another important group. Finally, there are the customers, in this case mainly hospitals and health care areas. They all have a different interest in the company and therefore will react differently to proposed change programmes.

Table 3-1 shows a power/interest matrix¹⁸ with the relative position of the different groups in terms of there

interest in the organisation’s strategy and their actual power to influence it. (+) and (-) indicate their likely position towards the proposed technological change programme.

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Table 3-1

The government and its committees provide the funding for CLS. Even though their interest might be low, this makes them a powerful player in this scenario. A programme of technological change always requires a large initial investment¹⁹. Therefore the government is likely to have an initially rather negative attitude towards this proposal. Employees on the other hand might see new technology as a way of improving their working conditions as well as there might be general excitement for new technology²⁰. They are likely to think positive about the proposed change. The unions, even though they are supposed to represent the employees, might have a different stand on this issue. They not only fear that technology will reduce the workforce needed but also see in the introduction of new technology and new ways of working a reduction of power and are therefore likely to oppose it. Senior management as well might see the proposed change as bearing a potential of reducing their power and influence. More importantly though, a lot of managers that have been with the company for many years might just not want to give up their routine ways of working. They, too, are expected to initially oppose the change. Finally, there are the customers. For them, technological change at CLS might not only mean a cost reduction for CLS’s service but also a widening of the offered product range. They are one of the supporters of the change programme.

3.2 The desired Situation and Levers to influence Stakeholders

The government’s position is essential for the funding and approval of the project and therefore it is important to gain its support. The Touche Ross Report was already mentioned earlier as one of the main tools to change the government’s opinion. Interestingly, the customers can be of help in this process. Since most customers in this context are from the public sector themselves they could engage in positive lobbying to influence the government’s position.²¹ In order to achieve this, the interest of the customers in the change process has to be increased. At CLS this was done by inviting key customers to the site to witness the change process personally. Through this the customers gained an understanding of the developments at CLS and they were filled with enthusiasm for the new product range and services CLS was able to offer through the new technology. In order to tackle the employees and unions, information and communication was an important tool. Employees were already supportive so their positive attitude had to be maintained through a policy of information. The unions on the other hand were opposed to the plan so their influence on the change process had to be reduced. The employee meetings effectively bypassed the unions as an institution and their power and influence was reduced accordingly. In addition, showing them the positive aspects of the change programme increased their support. Finally, the General Manager had to gain the support of senior management. The General Manager’s ability to inspire plays an important part in this process but it also has to be mentioned that through the reconstitution of management a lot of opposition to the plan was eliminated. After those levers were pulled successfully the climate for change was more favourable. The desired state is summarised in Table 3-2:

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Table 3-2

4 Leadership and the Role of the Individual

4.1 The Leadership Approach during the Transition State

This section focuses in on the General Manager’s leadership approach during the transition state of the change process. Illustration 4-1²² already indicates that the transition state of any change process is a very critical one. If not handled correctly, the situation can “explode” and get out of hand. Therefore a lot of care has to be taken

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Illustration 4-1

during the transition phase. The transition state can be further subdivided into Unfreezing, Moving, and Sustaining (Appendix 6.5). Those processes of creating awareness and readiness for change, implementation and embedding the changes have been discussed earlier. But what role did the leadership play in these processes? The General Manager at CLS adopted a what Richard Whittington calls in his essaySocial Structures and Strategic Leadership²³ a “transformational leadership” approach. According to Whittington, this is characterized by risk-taking, building commitment and the ability to focus attention and communication. Those features can be identified in the General Manager’s actions during the change process. Risk-taking is surely one of the key managerial factors for success and the General Manager at CLS certainly had to take some risks in order to transform CLS. The investment needed for technological change and the profitability of the organisation linked to this investment was one of the risks the General Manager had to take. He also gained commitment for change by explaining the critical situation of CLS. The threat of job displacement on the one hand and the excitement for new equipment and a better working atmosphere on the other ensured employee support. The General Manager’s main task was it to fill the rest of the company with enthusiasm for the change. His principle of open communication – for example of his strategic management plan – gave the employees a sense of direction. He also improved communication by ensuring a free flow of information. In the “Combined Unions Council” meetings the communication was focused on the change desired.

In conclusion, the general manger’s leadership approach can be summarised as one of guidance through communication, harmo nisation of previously conflicting forces within the organisation. He also provided the employees and managers with a vision and direction for the change process. But a critical examination also reveals negative aspects of his leadership style. It can be said that the General Manager was very dominant in the change process and not much evidence is given that input for alternative strategies was considered, let alone put into action, by the General Manager. Deviating opinions were oppressed by the imposed belief system. Instead of incorporating diversity into the culture criticising elements were removed for the sake of uniformity. While a certain degree of uniformity was wanted and necessary for the turn-around of CLS, it is questionable whether this uniformity will aid the future success of its operation.

4.2 Personal Transitions within the organisational Transition

The organisational change has top be linked to the personal transitions on intellectual and emotional level.²⁴ As well as the organisation, the employees also have to undergo the unfreeze-move-sustain stages. The concept of the emotional roller-coaster mentioned by Doz and Thanheiser has a close resemblance to Balogun & Hope Hailey’s transition curve, which can be found it Appendix 6.6. During the unfreezing step, temporary systems like the Combined Unions Council were created to achieve a “buy-in” of the need for renewal at CLS. The transition curve shows how this process of unlearning and changing can be a very painful one for the individual. The Council meetings also helped to cope with anger and frustration that arose during the transition phase of CLS. The practice of open communication of CLS’s problems quickly established an awareness and acceptance among the workforce for the need for change, effectively shortening the period low competence and confidence at the beginning of the change process. The training programmes and early improvements in productivity gave employees more confidence during the testing phase. This development from the awareness of change to the testing phase roughly resembles the move-phase on organisational level.

When the re-equipment programme began, employees had been thoroughly prepared for the change. While the organisational restructuring was accompanied by training programmes and meetings, there was not much help from management during the technological restructuring, which resulted in a period of “trial-and-error”.²⁵ This was due to the fact that the technological expertise had to be acquired from scratch. The engineers had to rely on help from the manufacturers in the United States. The expert knowledge gained through this process made the engineers to specialists in their fields. When other companies asked for help with their similar equipment, this gave them reassurance in their new role. At the time the changes on organisational level were embedded, the new ways were also integrated into the day-to-day working of the individuals at CLS. The support of General Management and the success of CLS’s operation was an important factor in anchoring the new beliefs and values into the new organisational culture.

5 Conclusion and Evaluation of the Change Management Process

There is much to be said about CLS. The results – the successful transformation of CLS – speak in favour of the means employed. CLS moved from a static bureaucracy to a commercial operation. During this process, various hurdles had to be overcome. The General Manager, who was the dominant leader in the change process and who acted as a champion of change at CLS had to unite senior management, which was fragmented and full of conflict. This was done through a reconstitution of management. He also gained union support through a policy of open communication. Finally, the workforce had to be motivated to participate in the change. New control systems and employee participation programmes ensured this commitment to change.

Furthermore, time, scope, readiness, and diversity were identified as contextual features of particular importance. The scope of the change to be undertaken greatly indicated a variety of design choices for CLS. Transformation, top-down approach, and participation are some of the design choices identified. Once this plan for the organisational transformation of CLS was set, likely reactions of different stakeholder groups were assessed. Unions and management were identified as groups with a potential to oppose the change. Those groups had to be convinced of the need for change through communication programmes. Employees and customers who were in favour of the change could have been used to provide positive lobbying for the change process.

The last section of this report focused on the leadership approach as well as personal transitions at CLS. The important role of the General Manager is evident throughout the case. It was his charismatic leadership and the ability to inspire people that made the change process so successful. He combined authority, which was necessary for a quick implementation of change, with a participatory approach, which assured him the employee support. The implementation of his dominant belief system is not undisputed but it was an effective method to achieve the change desired at CLS. This clear leadership approach also helped employees to get through the difficult phases of the personal transition that goes along the organisational transition.

It is important to note that the goal at CLS was to create a learning organisation. Transformation then becomes not a final goal but a never-ending process. Systems had to be implemented that ensured an ability for constant change in the future. Time will have to tell whether the belief systems were implemented so strongly into the organisation that constant change was made possible.

6 Appendix

6.1 The Cultural Web

6.1.1 1982 – The state-owned Bureaucracy

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Illustration 6-1

6.1.2 1990: A commercial Operation

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Illustration 6-2

6.2 Types of Change

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Table 6-1

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6.3 Stakeholder Analysis

Illustration 6-3²⁸

6.4 Key contextual Features of CLS

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Illustration 6-4

6.5 The three Phases of Transition

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6.6 The Transition Curve

7 References

- Armstrong, M. (1999),²⁹A Handbook of Human Resource Management Practice, Kogan Page, London

- Balogun, J. & Hope Hailey, V. (1999)Exploring Strategic Change, Prentice Hall, Harlow

- Case Study:New Technology at Central Linen Service

- Freeman, E. (1984)StrategicManagement:A Stakeholder Approach, Pitman Press, Boston

- Hendry, J., Johnson, G. & Newton, J. (1993)Strategic Thinking: Leadership and the Management of Change, John Wiley & Sons, Chichester

- Hill, C. and Jones, G. (1998)Strategic Management - An integrated Approach, Houghton Mifflin, Boston, MA

- Johnson, G. & Scholes, K. (1999)Exploring Corporate Strategy, Prentice Hall, Hemel Hempstead

- Rosenfeld, R. & Wilson, D. (1999)Managing Organizations, McGraw-Hill, Berkshire

[...]

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¹ Balogun & Hope Hailey (1999): “the way we do things around here”.

² Case Study

³ Armstrong (1999)

⁴ Balogun & Hope Hailey (1999) talk of the organisational stakeholders in this context. This will be discussed in more detail in section 3.

⁵ Balogun & Hope Hailey (1999)

⁶ Balogun & Hope Hailey (1999)

⁷ See Appendix 6.2 for an overview of the different types of change.

⁸ Balogun & Hope Hailey (1999)

⁹ Hill & Jones (1998)

¹⁰ “Combined Unions Council”

¹¹ The Committee of Management had failed to communicate this leadership.

¹² Rosenfeld & Wilson (1999)

¹³ Balogun & Hope Hailey (1999)

¹⁴ Promotion based on merit as opposed to promotion based on seniority.

¹⁵ Managers opposed to the change programme or the General Manager’s management style were simply transferred away to other divisions.

¹⁶ Case Study

¹⁷ The desired goods or services might be obtained from other companies.

¹⁸ Johnson & Scholes (1999)

¹⁹ New machinery and IT equipment has to be purchased.

²⁰ Case Study.

²¹ The idea of lobbying of certain stakeholder groups to influence other stakeholders is also explained in Johnson & Scholes (1999).

²² Adapted from Balogun & Hope Hailey (1999)

²³ In Hendryet al(1993)

²⁴ Doz, Y. and Thanheiser H.Regaining Competitiveness: A Process of Organisational Renewal(in Hendryet al 1993)

²⁵ Case Study

²⁶ Balogun & Hope Hailey (1999)

²⁷ Adapted from Balogun & Hope Hailey (1999)

²⁸ Adapted from Balogun & Hope Hailey (1999)

²⁹ Balogun & Hope Hailey (1999)