Understanding Organizational Change Management

Overview of the company

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Business organisations are always looking forward to develop and expand the company and also strive to achieve the objective of the company. Leaders of the company are responsible for devising policies and decisions so that the people associated with the company can achieve the objectives. The change management is the process by which the company can ensure there is constant planning in the implementation of change in the business (Ashkenas 2013). Strategic management of a company encompasses change decisions which helps the company develop and grow in the future. One of the major objectives of the change is to deal with challenging situations in the future (Cameron and Green 2015). An example of change management is: a company may incorporate new software in the process of customer relation, which is a change in the procedure. In such cases the management has to formulate a protocol of events which are going to streamline the process and ensure that there is no error in communication, training and other aspects of the change (Hayes 2018). This assignment is based on the concept of change management and the organisation that has been selected to analyse the subject is Esprit Holdings Limited.  

Established in 1968, the organisation has created a goodwill and reputation in the industry as well as among the stakeholders over the years of operation. The company operations on the value of the founding members Susie and Doug Tompkin (Esprit.com 2018). Creativity and responsibility along with the “sunny Californian attitude” are the values that drive the organisation. The philosophy of the brand is to create style that is effortless, easy-going and hassle free. The company focuses on the quality of the products, natural raw materials and responsible production (Esprit.com 2018).

The company is a multinational organisation that has its distribution in 40 countries and has 761 retail stores all over the world. The company is listed in the Hong Kong Stock Exchange since 1993 and there are two headquarters one in Germany and the other is in Hong Kong (Esprit.com 2018).

The three models that will be used in the process are Prosci’s Five Building Blocks Model (ADKAR), Kotter’s eight steps of change and McKinsey’s 7S framework.  

1. Kotter’s Eight-Step Model

Figure: Eight-Step of Kotter’s Model

Source: (Prosci.com 2018)

The above figure draws an outline to the steps that are involved in the model; this is one of the basic models of change management which was introduced by John Kotter in 1996. And since then there has been a revised version to align with the current business environment situations. The model deals with the complexities in process of change in a logical way. It identifies the need for change and continues to deal with the complexities in a way which is not only applicable for a major change but is also rational for small changes (Kotter 2010). The from the beginning till the end the steps that has been indicated by Kotter in the model not only specifies the process of change but also ensures that the change is impactful and is efficiently implemented. A major limitation of the model is that it is a top down model; therefore in a participative company this model will be non-impactful. Another major issue of this model is that the steps are mechanical; an organisation is a group of people in the process of any development of change there may be complications which are not anticipated in such cases the steps would be disrupted (Prosci.com 2018).

1. Prosci’s Five Building Blocks Model

Background to organisational strategic change

Figure: ADKAR Model

Source: Prosci.com 2018

Jeff Hiatt developed this concept there are five outcomes that are explained in the mode which are based on the goals of the organisation or the strategic management decisions of the company. If the company can achieve these five steps then the change is successfully implemented. The above figure states the five elements that are stated in the model.

Awareness – understanding and determining the reason for the change

Desire – the willingness and the participants in the process of change

Knowledge – the information and the guidance which are implemented in the process

Ability – the skills which are required in order to bring in the change

Reinforcement – the role of the change in the future

There are three stages in the process of change preparing, managing and reinforcing. Organizational objectives can be achieved with the help of this model as it allows the mangers or the leaders of the company to focus the actions that will result in the change. In order for change to implement effectively in an organisation both the employees and the managers must at some point bring changes among themselves, it is also equally important to comprehend with change in the process. The most significant advantage of the model is that it focuses on the interaction of the leaders with the employees who are the most important elements in the process of change. It can also be adopted as the culture of the company and therefore incorporate change as a part of the culture. On the other hand, the drawback of the model is efficient mostly when the change is incremental, as the steps that are included in the model are based on the completion of one goal and then moving on to another (Rosenberg  and Mosca, J., 2011).

1. McKinsey’s 7S framework

Figure: McKinsey’s 7S framework

Source: (Singh 2013)

The elements of the framework are divided soft and hard where the soft elements are the ones which cannot be easily detected on the other hand the hard ones are the aspects that can be easily recognized. The above diagram represents that 7s which helps in understanding the resource and capabilities of the company (Singh 2013). With the help of the analysis the company can understand the change that is required and the resources that they have to incorporate the change. The analysis of the aspects of the framework will allow the management of the company to maintain an effective sustained growth for the future.  The advantage of this framework is that it helps in establishing the strengths and weakness of the company and thus helps in understanding the capabilities that the company has in order to initiate and sustain a change in the process. On the other hand, a major disadvantage of the framework is that the organisational effectiveness is not taken as an aspect of capability. There are no measurements that are implicated in the framework therefore the accuracy of the elements are also variable (Ravanfar 2015).

Change management models that are appropriate for the company

The above discussed models are relevant in the economy as these models are using the factors of the environment based on the current situations. And the frameworks can be interpreted in a way that it will be used in the present situation. The relevance of the models is also in the fact that it can be used by the companies of any scale and any industry.  Esprit Holdings is a garment manufacturing company and these models are appropriate for the changes that can be implemented within the company (Smith 2011). In order to initiate changes in the process of business a company should ensure that they have the resource and capabilities to back up the plan and therefore the relevance of McKinsey’s 7S framework, on the other hand ADKAR Model is a framework that can be easily used by the company in order to set goals for a change process and also to ensure that the decisions that has been taken has a recurring impact on the company. Kotter’s Eight-Step Model serves as a guideline to ensure that the change is undertaken in a holistic approach.

Esprit is an organisation that caters to wide target market and has a large scale operation; therefore there are a number of people or stakeholders associated with the organisation. For the company to initiate a change which might be big or small they need to focus on the way the people impact by the change will react to the decisions of the management (Gupta 2013). While taking any decisions of the business the management always aligns the external business environmental factors in order to determine the opportunities in the market. Changes in an organisation always come up with resistance from the people who are associated with the change as the anticipation of the change and its outcome is always questionable. Business organisations take several steps to overcome these barriers in the process so that the management can align the perspective and develop understanding in the process. This is where the importance of strategic interventions arises. These are the decisions taken by the company in order to understand and analyze the gap that is present in the planning and implementation of decisions; it is also used to boost the outcome of a running project in order to arrive at a desirable position. The decisions also help the management to develop ideas to monitor and control the project.

In order to align the process of change with the external environment factors that company has initiates an online platform but this change requires the company to continue efforts as all 40 countries where the products are available and are distributed does not have the facility of online purchase (Esprit.com 2018). One of the most important decisions that the company should ensure is build a team of experts to deal with the situation. The team will look after the e-commerce platform of specific countries of operation. This intervention will ensure that the process of change in the structure of the company will maintain a streamline.

Third party interventions can be implemented by the company in order to initiate expansion strategy. The company has operation in 40 countries and there are distributions wholesalers and franchise all apart from retail stores which assist the organisation to make the products available among the people (Esprit.com 2018). Expansion is a change that the company has been implementing and successfully carrying out over the years with the help of third party interventions.

Esprit has to keep up with the global market in order to ensure smooth operation. The political aspect of the country, economy, technology and society are some of the major elements in the external business environment that has to be analyzed before taking any decision (Ho 2014). 

Every business organisation has to change internally in order to stay aligned with the dynamics of the industry. There are several factors that drive strategic change in Esprit Holdings:

Dynamics of the fashion industry: as the company operates in the fashion and garment industry where trends are dynamic and the company has to be in sync with the trends of the industry there are decisions taken on the basis of these trends. This will ensure that the company is catering to the requirements of the customers in terms of providing garments which are both casual trendy as well as comfortable. For example: the trend of bell bottom pants is no more in fashion, therefore the company has to choose a cut of pants that is in fashion now and accordingly direct the designers to come up with designs which are in current trend (Kash et al. 2014).

Expansion of the business: in order to develop and grow the business the company has to take decisions and understand the scope of expansion. The external environment of the country of expansion is taken in to consideration and decisions are taken accordingly. Expansion is a major change in the structure of the company as it adds a different layer to the hierarchy of the organisation. This is a major driver for change for Esprit as the company is always looking forward to expand the business and develop a global footprint in the fashion industry. Distribution of the products with the help of franchise and wholesale dealers who are third parties play in important role in the process of expansion (Smith 2011).  For example the company does not have operation in India they also do not have stores; however there are several franchise that are available who carry the products.

External business environment factors: As discussed above the company has to keep u with the changing dynamics of the external factors that impact the business. Change in the government and policies impact the decisions taken by the company, change in the economic scenario of the global market for example the time of depression, organisation all over the world had to go through several changes in order to adapt to the situation (Theriou and Aggelidis  2014).

Maintaining competitive advantage: to ensure a sustained efficiency in the process of maintaining an edge over the competition is important for the company. There is intense competition in the global market in the fashion industry therefore the company has to constantly take decisions regarding the same.

Ensuring improved quality of the products in order to fulfill customer satisfaction: the company always employees decisions that allows them to achieve the objective of the business, one of the major objective of esprit is to provide the customers with high quality products and in the long run ensure a valuable relation with the employees. Therefore this aspect becomes a major driver for change (Leban 2007).

The analysis of the company has led to the urgency of changes in the e-commerce sector of the company. The company has established mortar and brick infrastructure all over the world but the scenario has changed in the recent times. The trend among the target market is leaning towards availing the e-commerce services more than walking into a physical store, there are several factors that have resulted in this change in behavior among the people (Kehoe 2008). Therefore the company should focus on improving the policies and the quality of the e-commerce services. Firstly the company should ensure that wherever the business has its operation the company should make the website and its facilities available in those countries. This will reduce the dependence on third parties like the franchises. The company can also established a better brand presence in the country by establishing the e-commerce facility. The change in the process will be to initiate teams in the countries to look after the operation of the e-commerce service. The process will ensure that the customers are provided with flawless e-commerce services. The company has to focus on some of the pressure points in this business model like the delivery time, packaging, reduction of waste, efficient services in terms of returns, Cash on delivery option etc (Kehoe 2008).  

The dependence of technology has increased among the people therefore it is important for the company to make a robust e-commerce platform that will ensure easy and anytime access for the customers. The e-commerce platform is also an easy way to establish business in a country without investing in a brick and mortar stores. This change is necessary for the company as it will ensure that there is a consistent communication with the customers which will also help in developing the relationship in between the brand and the customers as well (Herold and Fedor 2008).

In order to initiate any kind of changes in the process of business the company has to analyze the resources in order to understand the capability it has in terms of implementing the change. Resources can be broadly divided in three categories: Human resource, financial resource and physical resource. Esprit has to invest in the change in terms of finance, skill, experience, knowledge, infrastructure, third party connections, relations with the suppliers etc. E-commerce platform is complicated as it not only has a section that is technology based but also has a segment that has physical existence (Green 2007). Therefore in order to create value the company has to invest the resources which will decrease in the initial stage and after the change has reached a position of stability the resources will be replenished.  Skill and human resource is one of the major elements which have to be incorporated in the change plan. There is significant amount of management skills, technology skills etc are required to organize and implement the plan. Suppliers and third parties are the significant contacts that will be used in this case, delivery on time is a major challenge and in order to make it efficient the company has to establish business relations with the third parties. Physical resource that the company will require to initiate the change in the e-commerce segments are: stocks, warehouses, office supplies etc. as mentioned above there is both physical and technology presence in the e-commerce business model the physical aspects are the elements which help in the development of the project (Helms-Mills et al. 2008).

On the other in the strategy is not implemented then there are possibilities of ensuring that the resources will not be used at all, however it also implies that the resources will not even improve.

Stakeholders are the people who are associated with the company internally or externally. There are a number of stakeholders who have various degree of involvement with the company and their impact in the process of business. Companies may consider various stakeholders as their priority base on their culture and objective. For example in this case Esprit considers the customers to be their most important stakeholders. Any decisions or policies that the company initiates is for the customers. The change and expansion of the e-commerce platform is also for providing the customers with better services. The customers will be provided with better opportunity of transaction, better policies of return and better services in times of any challenge or query in the process of delivery etc.

Stakeholder analysis is a concept that was coined by R. Edward Freeman, it is important to analyze the stakeholders in order to ensure success of the business. The stakeholder matrix is one of the important models which are used in order to determine the stakeholders of the organisation (Freeman 2010). This is also known as the Power/Interest Grid for Stakeholder Prioritization. The following figure represents the model.

Figure: Stakeholder analysis

Source: Bryson 2004

In the case of Esprit the change that is being recommended to initiate is the development of the e-commerce platform. Thus the stakeholders of the process are:

Manage closely: the customers are the stakeholders with the maximum interest as the service is provided for the customers. On the other hand the customers also have significant power as the decisions that are taken by the company are based on the trends that the customers follow.

Keep Satisfied: the government of the places where the operations will be expanded has to be satisfied as the government has power to disrupt any plans yet they hardly have any interest on the products. Another stakeholders who have to be kept satisfied are the creditors and shareholders who has invested their money.

Monitor (minimum effort): the society is regarded as one of the stakeholders that have to be monitored as the trends of the society impacts the decisions.

Keep informed: The employees of the company along with the third parties are the people who have interest on the decisions that are formulated by the company but they do not have any power to impact the process or manipulate the decisions.

The introductory stage of the process should involve the customers with the help of a market survey which will help in determining whether the decision that the company has taken is correct or not. Do the customers even want a better e-commerce service, if yes then where are the areas of development.  After this the company has to understand the policies and rules of each country of operation regarding e-commerce regulations (Bryson 2004).  

The company has to establish communication with the shareholders and the employees in order to let them know that such an initiative of change is being taken. For the employees there may be positions that can be internally allowed if the existing people have the skill and expertise to assist in the new venture. Whereas the shareholders and the creditors have the right to be informed regarding any changes that the management has decided to incorporate in the business.

As discussed above one of the most important part of the introductory planning phase includes the involvement of the customers. This is market research; it is the process by which any business organisation determines the dynamics of the market by undertaking research projects.  

The employees in the management positions will be responsible for planning the process of change and incorporating elements in the process. The employees are fully involved in the planning, organizing and determining the effectiveness of the change.

The government will also be a part of the analysis of market research as the company has to abide by the rules and regulations of that are set by the government of the country regarding e-commerce.

The shareholders, creditors are the people who are responsible for the financial resource and investment that the company will invest in the project. The suppliers and the third parties are the people who are responsible for developing the idea in a holistic way and ensure that the company can perform with efficiency.

Resistance is the biggest challenge that is faced by the management of the company. A process of change brings along with it anticipation and lack of trust that the situation will impact positively on the people. Strategic decisions have to be taken in order to overcome the resistance. This is the most common reaction to change decision (Matos Marques Simoes and Esposito 2014). However, there are also chance that the people associated with the change have a positive attitude towards the change.  If the decision of change is justified and communicated well with the people there are chances that the people will react positively. There are eight categories for the reason of change resistance:

Objective – if there is lack in transparency of the project and the reasons for the change is not projected among the people (Matos Marques Simoes and Esposito 2014).

People – the interest, values, principles, skill etc of the people associated with the project may be threatened.

Technology – there may be barriers in terms of technology in the change approach

Business processes – The systems that will be associated with the business and the change policies should be communicated well

Financial resources – financial loss due to anticipation is one of the major causes of resistance

Structure – The new policies might impact the structure which can be disrupting the compatibility among the people.

Culture – change that challenges the core principles are most likely to face resistance from the people (Matos Marques Simoes and Esposito 2014).

Power – if the change impacts the power equation among the higher authorities of the company there may be resistance (Matos Marques Simoes and Esposito 2014).

Stakeholder	Strategy
Customer	The customers will be communicated regarding the change with the help of promotion strategy
Government	Before formulating the policies the government regulations will be analyzed
Employees	These people will be communicated regarding the changes taken in the process and will also be explained how it will help the company serve the customers
Shareholders & creditors	These are the people who are responsible for the finances and therefore they should be officially notified regarding the upgrading process of the e-commerce platform
Suppliers and distributor	New contacts should be established to facilitate the service

First of all steps should be taken to avoid resistance at all because it will create a sense of conflict among the internal environment. Therefore the company should ensure that there is clarity and transparency in the process of change. The pros and cons of the process must be explained in order to remain transparent, however the cons of the change must be represented in a way that may have a long term positive impact. The idea should be to portray an image of positivity form the change, the company must align the change with the objectives and the principles that the company believes in (Y?lmaz and K?l?ço?lu 2013).

In case there are some kinds of resistance, the management should take an opportunity to independently explain the procedure to these people and furthermore help them to explain their side of the argument as well. This will also provide the management to make amendments in the process if the change in case the resistance is justified (McKay et al. 2014).  

BPR or Business process re-engineering is the change model which is appropriate for the change that is being discussed. It is the process of improvement of productivity of the process rather than focusing on a single aspect of the business. The change that has to be incorporated in the e-commerce platform will not only be introducing the platform to new places but will also encompass in improving the process as a whole so that there is better customer service and high quality products. The process needs a holistic approach of change in order to build a good platform. As Esprit is a company that is customer-focus the model will perfectly align with the change objectives of the business. There are a number of BPR software and tools that are involved in the process as the people associated with the business have to gather a lot of information regarding every aspect of change in the process. Technology is a significant part of the process (Childe et al. 2013).

Activity	Time span	Resource needed	People responsible	Outcome
Market analysis	3 months	Research analysts, financial resource	The research team	The variables and the dynamics in the process of change in the e-commerce platform
Recognizing the area of improvement	1 month	Physical resources	e-commerce management team	These are the places where the company has to invest in improvement
Developing technology to enable expansion in other countries	6 months	Human resource, physical resource, financial resource	Tech team, marketing team, fiancé team	Allow the target market an opportunity to buy products off the website in the countries where there was no such provision
Customer service	6 months	Human resource, physical resource, financial resource	The support team, the customer service team, the management	The idea is to build a valuable relation with the
Contact with the third parties	3 month	The management skills, third parties contacts	Marketing team, people at the third party service	Establish core distribution network to reach out to the customers in time, this is country specific

The traffic of the website rise is an indicator that the change plan is working. The final accounts are also one of the measures of evaluation of the effectiveness of the change plan. The figures of the transaction through the website will indicate the success or failure of the project. Another indicator of success is the return on investment of the process, the shareholders return on the investment on the venture will also showcase the degree of success from the project (Massingham 2014).

Conclusion

It can be concluded form the above discussion that Esprit holdings is an organisation that is in the maturity stage and with the advancement of technology the company has got opportunity of improvement and change in the business process. Though the company has a website with the help of which the customers can purchase products but the facility is not available in all the countries of operation. For example: India. Thus the improvement of this business process and the expansion of the service will help the company to provide a holistic quality improvement change to the e-commerce platform.

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