Organizational Change Management

A Literature Review

Hassan, A.T.

School Of Management Sciences, Department of Business Administration and Marketing,

Babcock University, Ilishan-Remo, Ogun state, Nigeria

Word Count: 7,924 words.

Key Words: Organization, Change, Management, Unfreeze, Re freeze, Moving, Model,

Employee, Human Resources, Communication, Culture, Institution, Process, Stage, Strategy,

Implementation.

ABSTRACT

Change Management at organizational level has been conceived to be an important aspect of

successful change implementation programmes in modern organizations. In order to benefit from

the efficiency that appropriate management of change offers in structured organizations, the study

of management has ascribed importance to the study of change management as a management

concept. This study has attempted to review existing literature on the subject. The study presented

a conceptual analysis of the concept of change and the principles developed by practitioners for

the management of change. A theoretical review of the concept was undertaken with focus on the

Kurt Lewin’s force field theory which has been generally accepted as the theoretical foundation of

change as attested by the acceptance of the theory as the bases for all other theories of change and

this ascribed the title father of change management to Kurt Lewin. This study analyzed the basis

Electronic copy available at: https://ssrn.com/abstract=3135770

of Kurt Lewin’s force field theory built on three steps of Unfreeze, Change and Refreeze for an

effective change management programme. The Study adopted a case study research conducted by

other researchers to validate the effectiveness of the three stages of effective change management

as propounded by Kurt Lewin.

Electronic copy available at: https://ssrn.com/abstract=3135770

INTRODUCTION

It is a commonly expressed view that change is the only permanent thing in life. Much as the view

is commonly expressed, research has shown that change is often resisted as a result of many reason

that would form part of the discourse of this paper.

The world we live is ever evolving and not static. In the same token, the organizations we build

are equally evolving and not static. Change is therefore pertinent to the required progress that result

to organizational success.

Merriam-Webster Dictionary (1828) defined change as “a transit verb to make different in some

particular…”

Other descriptions ascribed to change include the following;

“To become different”

“To undergo transformation, transition or substitution”

“To undergo a modification”

“To give a different position, course of direction”.

Every individual or organization experience change at one time or the other in a life cycle. The

focus of this paper is on organizational change and as such, it shall be reflecting on change

perspective within organizations in a constantly evolving, volatile, uncertain, complex and

ambiguous business environment. Change is pertinent to progress and requires a systematic

process of management. This and other reason are why the field of Management has ascribed a

place for the study of the process of managing change in organizations.

Organizational change management may therefore be described as a systematic process through

which an organization conceptualizes, implements and appraises its change effort for the desired

result.

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FACTORS INFLUENCING CHANGE

Change in organizations are influenced by internal and external factors. Often times the internal

factors influencing change in organizations are aimed towards creating external changes. The

following have therefore been identified as some of the factors that may influence the quest for

change in an organization; low productivity, absenteeism, turnover, union activity and leadership.

The factors highlighted above, even though categorized as internal are interrelated with external

factors because they are often times designed to deal with external factors such as; Competition,

need to respond to market demand, changes in technology, changes in government policies and

Social pressure.

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CONCEPTUAL REVIEW

Organizational Change Management has become prominent on strategic agenda of today’s

business leaders. Harvard Business Review (1998) estimated that change implementation cost

Fortune 100 companies an average of $1 billion between 1980 and 1995.

The acceptance of change as a strategic force and its cost in organizations increased Researches

growing responsibility to have an in-depth inquiry on how Managers and Change Agents can better

manage work place change initiatives. Organizational Change Management is therefore concerned

with facilitating the process of change through modifications of strategies, structures and

processes. Employee in an organization are major players in the change process. Their response to

change is a determinant factor for the success or failure of the change initiative.

The human side of change is as important as “the change” itself. The process will be herculean

and may fail when appropriate planning is not ascribed to the human side of change. It is against

this background that three partners at PriceWaterHouseCoopers (PWC) have developed ten

guiding principles for Organizational Change Management with some Client examples for

illustration. Neilson, G., Kvings, J., Aguivre, D., & Tipping, A. (2004)

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TEN GUIDING PRINCIPLES OF ORGANIZATIONAL CHANGE MANAGEMENT

PRINCIPLE 1

ADDRESS THE HUMAN SIDE OF CHANGE SYSTEMATICALLY

Any transformation of significance will create people issues. New leaders will be asked to step up,

jobs will be changed, new skills and capabilities must be developed, and people will be uncertain

and will resist. Dealing with these issues on a reactive, case-by-case basis puts speed, morale and

results at risk. A disciplined approach to change management must be one of the four pillars of

any transformation approach. This fact-based approach demands as much data collection and

analysis, planning and implementation discipline as a redesign of strategy, systems or processes.

It should be fully integrated into program design and decision-making, both informing and

enabling strategic direction. It should be based on a realistic assessment of the organization’s

history, readiness and capacity to change. And it should link multiple change initiatives together.

A formal approach for managing change – beginning with the leadership team and then engaging

key stakeholders and leaders – should be developed early but adapted often as change moves

through the organization.

Client Example

The senior team of a large customer services company rolled out an initiative to improve the

efficiency and performance of its corporate and field staff before addressing change issues at the

office level. The initiative realized initial cost savings but stalled as employee began to question

the Leadership team’s vision and commitment to the change programme. Middle managers didn’t

embrace the programme, not wanting to take risks until the direction and performance of the

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initiatives were clear. Only after the Leadership went through the process of aligning and

committing to the change initiative was the work force able to deliver downstream results.

PRINCIPLE 2

CHANGE STARTS AT THE TOP AND BEGINS ON DAY ONE

Change is inherently unsettling for people at all levels of an organization, and when it is on the

horizon all eyes will turn to the CEO and the leadership team for strength, support and direction.

The leadership must change first to challenge and motivate the rest of the institution, speaking

with one voice and “walking the talk” to model desired behaviour. At the same time, individual

executive team members are going through their own personal changes and need to be supported

so that they can be in agreement with their executive team members. Executive teams that work

well together, that are aligned and committed to the direction of change, that understand the culture

and behaviours it intends to introduce, and that can model those changes themselves are best

positioned for success.

Client Example

A major multi-line insurer with consistently flat earnings determined that it needed to change

performance and behaviour to prepare for going public. It followed the cascading approach to

change, training and supporting team at each stage: 10 officers setting the strategy, vision and

targets; 60 – 80 Senior Executives and Managers designing the core of the change initiatives; 500

leaders from the field getting the details right and driving implementation. This structure remained

in place throughout the change programme, which doubled earnings far ahead of schedule.

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Figure 1

CASCADING OWNERSHIP FROM TOP TO BOTTOM

Ownership of the change cascades from top to bottom as illustrated in figure 1 below;

PRINCIPLE 3

REAL CHANGE HAPPENS AT THE BOTTOM

As transformation programs progress through strategy/target setting, design and implementation,

they affect different levels of the organization. Change efforts must include plans for identifying

leaders and pushing responsibility for design and implementation down through the organization.

Strategy and target setting is usually the responsibility of the leadership team and its direct reports.

Design teams drawn from the next layer of executives and senior managers must be prepared to

work across silos and lead the change. Implementation relies on line managers and individual

contributors. Each of these layers must have identified, trained leaders who are aligned to the

company’s vision, equipped to execute their specific mission, and motivated to make change

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happen. These change leaders must be released from their current assignments and dedicated to

the work of change.

PRINCIPLE 4

CONFRONT REALITY, DEMONSTRATE FAITH AND CRAFT A VISION

Individuals are inherently rational and will question to what extent change is needed, whether the

company is headed in the right direction, and whether they want to personally commit to making

change happen. They will look to the leadership for answers. Articulating a formal case for change

and creating a written vision statement are invaluable opportunities to create (or force) leadership

team alignment. Leaders must then customize this message for various internal audiences,

describing the pending change in terms that matter to the individual:

a. Confronting reality and articulating a compelling need for change

b. Demonstrating faith that the company has a viable future and the leadership to get there

c. Providing a roadmap to guide behaviour and decision-making

Client Example

A consumer packaged-goods company experiencing years of steadily declining earnings

determined that it needed to significantly restructure its operations to remain competitive, shedding

upwards of 30% of the workforce in the process. The Leadership team’s challenge was to shift the

focus from the massive downsizing and engage the survivors in embracing the new business

strategy. Through a series of offsite meetings, the executive team built a brutally honest business

case that downsizing was the only way to keep the business viable and drew on the company’s

proud heritage to craft a compelling vision to lead the company forward. By confronting reality

and helping employees understand the necessity for change, the leadership was able to motivate

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the organization to follow the new direction in the midst of the large downsizing in the company’s

history.

Figure 2

Validates the need to confront reality with administration of faith, in order to clearly articulate the

vision for the change

Change leaders’ message to the institution

1 2
Confront 3 Articulate vision Demonstrate
reality faith

(Collins, J. 2001)

“Confront the most “Explain where you are going “Retain faith that you

brutal facts of the and what you need to do to get will prevail in the end

current situation” there” regardless of the

difficulty”

PRINCIPLE 5

CREATE OWNERSHIP, NOT JUST BUY-IN

Large change programs require a distributed leadership that has broad influence over decisions

both visible and invisible to the senior team. Change leaders must over-perform during the

transformation and be the zealots that create critical mass for change in the workforce. This

requires more than mere buy-in or passive agreement that the direction of change is acceptable. It
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demands ownership by leaders willing to accept responsibility for making change happen in all of

the areas they influence or control. Ownership is often best created by involving people in

identifying issues and crafting solutions. It is reinforced by a combination of tangible (financial

compensation) and psychological (camaraderie, sense of shared destiny) incentives and rewards.

Many companies create “design and build” teams led by key change agents to develop the core

strategies they will need to implement. Middle and line mangers are likewise engaged in Phase III

of the change program to flesh out the detailed implementation plans that they will follow.

Figure 3
The change program should be capable of creating ownership at all levels concerned.
Organizational reach of change program

Top
Number of
execs
CEO
people/required
as
touch points
change

Level of agents Program leaders

as change agents

organization

engaged
Permanent change in
frontline managers
and employees

Front

line
Time/Project Implementation
Selling
phase

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PRINCIPLE 6

PRACTICE TARGETED OVER-COMMUNICATION

The best-laid plans are only as good as the institution’s ability to understand, adopt and act on

them. Too often, change leaders make the mistake of believing that others understand the issues,

feel the need to change, and see the new direction as clearly as they do. The best change programs

reinforce core messages through regular, timely advice that is both inspiration and actionable.

Communication is both outbound and inbound. It shall be targeted so as to provide employees the

right information at the right time, to solicit their input and feedback and to check in on their

emotion response to what they’ve heard. Change programs often require over-communication

through multiple, redundant channels. However, communication must be timed, coordinated,

consistent and personal. The best change leaders speak from the heart and convey a deep sense of

personal commitment. They tell a consistent story and view telling the story as a key responsibility

in the change process.

Client Example

In the late 1990s, the Commissioner of the Internal Revenue Service (IRS) in the US has a vision

of treating tax payers as customers and turning a feared bureaucracy into a world-class service

organization. Getting more than 100,000 employees to think and act differently required more than

just system redesigning and process change. IRS leadership designed and executed an ambitious

communications programme including daily voicemails from the Commissioner and his top staff,

training sessions, videotapes and newsletters and town hall meetings that continued throughout the

transformation. Timely, constant, practical communication was at the heart of the programme,

which brought the IRS’s customer ratings from lowest in the country to its current ranking about

the likes of McDonald’s and most airlines.

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PRINCIPLE 7

EXPLICITLY ADDRESS CULTURE AND ATTACK THE CULTURAL CENTER

Company culture is an amalgam of shared history, explicit values and beliefs, and common

attitudes and behaviours. Change programs often require amending, creating (in new companies

or companies built through multiple acquisitions), retaining (in storied consumer goods or

manufacturing concerns), or merging (in mergers or acquisitions of large companies) culture to be

successful. Culture should be addressed as thoroughly as any other area. This requires developing

a baseline through a cultural/organizational diagnostic, defining an explicit end-state or desired

culture, and devising detailed plans to make the transition. After completing the vision and

thinking about the desired culture, leaders can assess the current culture to understand the gaps

that need to be bridged and to identify strategies to accelerate the development of a new culture.

Leaders should be explicit about the type of culture and underlying behaviours that will best

support the new way of doing business, and find opportunities to socialize, model and reward those

behaviours. Attacking the cultural center of a company – the locus of thought, activity, influence

or personal identification – is often an effective way to jump-start culture change.

PRINCIPLE 8

ASSESS THE CULTURAL LANDSCAPE EARLY

Successful change programs pick up speed and intensity as they cascade down, making it critically

important to understand and account for culture and behaviours at each level of the organization.

Companies often make the mistake of assessing culture either too late or not at all. Thorough

cultural diagnostics can assess organizational readiness to change, bring major issues to the

surface, identify cultural factors that will support or inhibit change, and target sources of leadership

and resistance. They identify the core values, beliefs, behaviours and perceptions that must be
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taken into account for successful change to occur. They serve as the common fact baseline for

designing key change elements, such as the new corporate vision, and building the infrastructure

and programs needed to drive change.

Client Example

A consumer goods company with a suite of premium brands determined that business realities

demanded a greater focus on profitability and bottom-line accountability. In addition to

redesigning metrics and incentives, it developed a plan to systematically change the company’s

culture, beginning with marketing, the company’s historical center. It brought the marketing staff

into the process early to create zealots for this new philosophy, adapting marketing campaigns,

spend plans, and incentive programmes to be more accountable. The rest of the company quickly

fell in line and the modified culture took off.

Figure 4

Demonstrates the process of attacking the cultural centre for a new culture to take place

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PRINCIPLE 9

PREPARE FOR THE UNEXPECTED

No change program has gone completely according to script. People will react in unexpected ways,

areas of anticipated resistance will fall away, and the external environment will shift. Effectively

managing change requires constantly reassessing the impact of change efforts and the

organization’s willingness and ability to adopt the next wave of transformation. Fed by real data

form the field and supported by information and decision-making processes that elevate and

resolve issues, change leaders can then make the adjustments necessary to maintain momentum

and drive results.

PRINCIPLE 10

SPEAK TO THE INDIVIDUAL AS WELL AS TO THE INSTITUTION

Change is a personal journey as well as an institutional one. It truly does happen one person and

one team at a time. Individuals (or teams of individuals) need to know how their work will change,

what is expected of them during and after the change program, how they will be measured, and

what success or failure will mean for them. Be honest and as explicit as possible. People will react

to what they see and hear around them. Involve people n the change process. Provide highly visible

rewards (promotion, recognition, bonuses) as dramatic reinforcement for embracing change.

Sanctioning or removing people standing in the way of change reinforces the institution’s

commitment.

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CLASSIFICATION OF CHANGE IN ORGANIZATIONS

An organization that desires growth and success should always look towards change in its

administrative process to encourage efficiency while managers are faced with the challenge of how

best to respond to the forces of changes in a bid to move the organization forward. (George, J.M

& Jones, G. R., 2012)

Previous researchers have commonly classified change as Evolutionary or Revolutionary.

Evolutionary Change: This involves a constant gradual attempt to improve, adapt and adjust

strategy and structure incrementally to respond to the changes in the environment. It is

narrowly focused and by nature not drastic or sudden (George, J.M. & Jones, G.R., 2012).

Revolutionary Change: This is a bold type of change, broad in focus and rapid, can be

dramatic and audacious with the aim of proposing more effective ways of doing things within

the organization. This is likely to result in operational, structural and in some cases leadership

changes (George, J.M. & Jones, G. R., 2012).

Methods of Implementing Revolutionary Change

This involves the re-evaluation of the basic business process (activities across functional units) in

a bid to redesign and achieve a dramatic improvement in its performance, cost, quality, service

and turnaround time of its product or services.

Re-engineering focuses on business process and not functions hence new innovative ways of

organizing its activities are developed.

Re-engineering focus on customers and not the product hence existing arrangements are most

times discarded to meet customer needs. (George, J.M & Jones, G.R., 2012)

E-engineering: A term employed to describe organizations that adopt advanced Information

Technology, soft and hard ware to drive business process

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Restructuring: This is a strategy employed by organizations who plan to transform from their

current declining structure to strengthen and recover by eliminating bottle necks, reduce hierarchy

and reduce operating cost for improved performance and profitability. Events occurring in an

organization’s life cycle may determine the need for restructuring. Such events including;

economic conditions i.e. recession or boom, new technology, obsolence of products and services,

declining profitability etc.

Figure 5

This shows the life cycle of an organization and - - within the lifecycle which may necessitated

the need for change at different stages of the organization’s life cyle.

Organization cycle

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Innovation: This is the inherent skill and resources a person or organization possess to create

new technologies or products to optimize its activities and response to customer needs. The

change innovation brings are mostly associated with a lot of risk and most timed difficult to

implement as Research & Development (R & D) activities are uncertain and it has been

estimated that only 12 to 20 percent of R & D projects make it to the market (George, J.M. &

Jones, G. R. 2012)

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TYPOLOGY OF ORGANIZATIONAL CHANGE

Organizational change is further divided into four types under the above classification as follows;

Anticipatory Changes: These are any systematically planned change intended to take advantage

of expected solutions.

Reactive Change: changes made in response to unexpected environments or pressure

Incremental Change: This involves sub-system adjustment needed to keep the organization on

its chosen path or on course. For instance, adding a night shift to meet unexpectedly high demand

for the company’s product.

Strategic Change: Altering the overall shape or direction of the organization, e.g. switching from

building houses to building apartment or complexes. (Akpa, V. 2017)

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THEORETICAL REVIEW OF ORGANIZATIONAL CHANGE

CHANGE MODELS

Scholarly models of organizational change abounds, out of which three models have stood as

examples in the Change Management literature.

Kotter’s (1995) Eight-Step Model for Transforming Organizations, Jick (1991) Tactical

Level Model 10 Step Approach to Organizational Change Management and GE Seven Step

Change Acceleration Model (2000)

1. Kotter’s Model (1995)

Kotter’s Model was developed after a study of over 100 organizations varying in size and

industry type after learning that the majority of major change efforts failed. He concluded

his model as a way of avoiding major errors in the change process. The key learning points

from Kotter’s Model were that; 1) Change process goes through a series of phases each

lasting a considerable amount of time.2) Critical mistakes in any of the phases could have

a devastating effect on the momentum of the change process

2. Jick’s Model (1991)

Jick developed a tactical level model to guide the implementation of major organizational

change. Jick developed a 10 step level model which today operates as a blue print to

Organizational Change Management.

Jick’s model focuses on change implementation which he regarded as a blend of both arts

and science. He emphasized that implementation of change is as important as the motive

for the change. He recognized that change is a continuum and its implementation is a

determinant factor for its success.

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 3. GE Seven Step Change Acceleration Model (2000) built on Lewin’s Model of Change,

it was developed on the notion that change has three phases, i.e. Unfreezing, Movement

(change) and Refreezing as the essential component of the Change phenomenon. Lewin’s

model is focused on Leaders’ role in creating urgency for the change, crafting and

communicating the vision, leading the change, measuring the progress of change along

several dimensions and institutionalizing the change.

The series of the Seven Step Model have been described as – checklist by Researches.

According to Garvin (2000) “Checklist are used by even the most experienced pilots yet

they offer no new insights, instead, they make existing knowledge more visible and

accessible, ensuring that all essential steps are followed. Discipline, not discovery, is the

goal of the checklist”.

The three models of the change process have been described as mind map as shown in figure 1

below;

Mind Map

Figure 6

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HHHfffffffFFFFF

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THEORIES OF CHANGE

We recognize that there are many theories supporting the concept of organizational change.

However, some of them are more widely accepted than others

Five widely recognized theories have been stated in this paper. They have been conceptualized to

answer the question bothering on how successful changes happen. These theories are

Lewin’s Three Step change (Force Field Theory) , Lippit’s Phases of Change Theory,

Prochaska and DiClemente’s Change Theory, Social Cognitive Theory, and the Theory of

Reasoned Action and Planned Behaviour

The thrust of this paper shall be based on Lewin’s Three Step Change (Force FieldTheory)

Figure 7

This figure explains the 3 stages of change as propounded by Kurt Lewin

Kurt Lewin (1951) introduced the three step change theory. Lewin propounded that behaviour is a

dynamic balance of forces working on opposing directions. He observed that driving forces
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facilitates change because they push employees in the desired direction. He postulated that

restraining factors hinder change because they push employees in the opposite direction. The

outcome of Lewin’s theory shifts the balance in the direction of the planned change. Based on

Lewin’s theory, the first step in the process of changing behaviour is to unfreeze the existing

situation or status quo which is considered the equilibrium state. He observed that unfreezing is

necessary to overcome the strain that individual resistance and group conformity may exhart on

the change process. Lewin recommended three methods towards achieving unfreezing phase of

the change process; (i) Increase the driving forces that direct behaviour away from the existing

situation or status quo. (ii) Decrease the restraining forces that negatively affect the movement

form the existing equilibrium and; (iii) Find a balance between the driving and restraining forces

to shift direction towards the planned change.

Lewin described the second steps in the process of changing behaviour as Movement Stage. At

this stage, the target system is moved to a new level of equilibrium. During this stage, employees

are persuaded to agree that the status quo is not beneficial to them and they are encouraged to view

the problem from a fresh perspective, work together as a quest for new, relevant information and

connect the views of the group to well-respected, powerful leaders that also support the change.

Last of Lewin’s three steps change model is Refreezing. This step takes place after the intended

change has been implemented. The phase is connected with the need for sustainability of the

change.

By the early 1980s, Lewin’s theory started attracting criticism as to its appropriateness and

efficacy. The Culture-Excellence School of thought promoted by (Peters & Waternan 1982) were
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among the major critics of Lewin’s theory of planned approach to change management. They held

that Lewin’s planned approach is group-based, consensual and relatively slow in nature. They

argued that western organizations were losing their competitive edge because they were too

bureaucratic, inflexible and slow to change. They propose that the world is essentially an

ambiguous place where detailed plans are not possible and flexibility essential. Instead of close

supervision and strict rules, organizational objectives need to be promoted by loose controls, based

on shared values and culture pursued through empowered employees using their own initiatives.

They argued in favour of driving change in an organic, bottom-up fashion for the day to day action

of all in the organizations. They rejected planned approach to change as antithetical.

Pettigraw (1997), a protagonist of the Processual Approach to change accentuated the rejection of

Lewin’s theory and described it as prescriptive recipe driven and suspicious of single causes or

simple explanations of events. The Processualist focus on inter-relatedness of individuals, groups,

organizations and society. They claim that process of change is a complex and untidy cocktail of

rational decision processes, individual perceptive, political struggles and coalition building.

Even though Lewin’s theory has been criticized by many, it is evident from available literature on

the study of change management that Lewin remains highly respected and regarded as the father

of all social theories of change. It is acclaimed that Lewin provided the foundational basis for all

the theories of change and that all theories that evolved after Lewin’s has a link with the classic

theory of planned behaviour promoted by Lewin. The genealogy of change management has

therefore won support for Lewin in the words of the following scholars and many others;

The study of change management has “followed Lewin” Jeffcut (1996)

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Kurt Lewin is widely considered the founding father of change management with his

unfreezing-change-refreezing or ‘changing as three steps’ (CATS) regarded as the

‘fundamental’ or ‘classic’ approach to or classic ‘paradigm’ for managing change. Waddell

(2007)

CATS has subsequently dominated almost all western theories of change over the past fifty

years. Michaels (2011)

Academic scholars have claimed that all theories of change are reducible to one idea of Kurt

Lewin’s theory while change management practitioners have boasted that ‘the most powerful

tool in their toolbox is Kurt Lewin’s simple three step change model CATS. Levasseur (2001)

Figure 8

CATS Conceptualized

Unfreeze Change Refreeze

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EMPIRICAL REVIEW

The empirical review is based on a case study of Hewlett-Packard’s (HP’s) worldwide

implementation of its @HP Employee portal in the Italian subsidiary of HP. The review gave an

illustration of Kurt Lewin’s force field theory.

HP Portals are complex information technology (IT) applications that can be accessed by all

employees of a given organization. By placing more application and information online, HR

Portals reduce the reliance employee have on the HR personnel. Given this relational change, from

human to computer, the HR portal implementation process must take into account the challenge

both change management and technology acceptance.

The study added to collective knowledge by integrating change management theory with IT user

acceptance models. It also espoused the cross national challenges that exist when a global firm

attempts to implement on HR portal in its operations around the world.

The World Wide Web (www) has revitalized the way individuals in organizations access

information. In addition to channels such as business-to-business and business-to-consumer, the

web has permitted human resources management to implement HR processes where business-to-

employee (B2E) solutions are possible. Harris, Phifer & Berg (2002)

Organizations with strategic human resources have implemented an increasing number of

electronic HR (e-HR) solutions for redesigning the processes and reducing the administrative role

of the HR department. Crandall & Wallace (2002).

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Since more of the administrative task are available on HR portals, HR professionals have

increasingly more tuned to engage in strategic HR activities.

HR portals are vehicles through which HR information and applications can be channeled

effectively and efficiently. (Fire Stone 2003). There are many tools that HR portals offer, including

employee communication (HR policies, who’s who, what’s new, FAQs etc.) as well as pension

services inquiries and the like. Other administrative activities such as the updating of an

employee’s personal data are the responsibility of the employees themselves. Employee have

access to customized and personalized news through HR portal. HR portal offer different services

to employees and management. Managers are able to generate report such as head count, salary

listing, time reports, examine employee activities such as transfer, promotions and terminations,

and manage their own activities such as travel arrangement and expense management.

Implementation of an HR portal is a complex process because it requires firms to manage both

significant changes for the employees as well as the technical challenges for the organization’s

project installation team. Even though the technical installation challenges may be enormous, the

human challenge associated with change is of greater importance but often overlooked during

implementation phase of an HR portal.

Employee users are expected to become accustomed to establishing a new kind of relationship

with HR as well as accepting interaction with a computer rather than with a person and for some

to actually using a new technology. These challenges i.e. IT acceptance and organizational change

management can be daunting, especially when not effectively managed.

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This study therefore attempted to integrate change management theories originating from Kurt

Lewin’s Change As Three Steps (CATS) with IT user acceptance models.

Armenakis and Bedeian (1999) in their review of organizational change literature found four issues

that were common to all change efforts;1) Content issues focusing on the substance of the change,

2) Context issues focusing on forces internal and external to the organizations, 3) Process issues

focusing on how the change was implemented and 4) Criterion issues focusing on outcomes

commonly assessed.

In the case of HR portal, the content is the introduction of HR applications, the context include all

internal and external factors affecting the employees and managers who will use the HR portal,

the process include all the change management activities organizations may implement to

encourage employee usage and the criterion is whether employees use the new HR portal, how

long it takes for employees to start using the HR portal, how satisfied they are with the HR portal

etc.

A recent IT user acceptance research found eight competitive models that were integrated into a

unified model called the unified theory of acceptance and use of technology. Venkatesh, Morris,

Danis & Davis (2003). All eight model can be traced to Kurt Lewin’s CATS.

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THE HEWLETT-PACKARD @HP EMPLOYEE PORTAL

In January 2000, HP’s CEO Carly Fiorina provided a vision for the @HP Employee portal stating,

“This world wide entry point would be rolled out to every subsidiary around the world, connecting

employees who can access corporate information, personal data, services, HP resources and

execute internal transactions”.

The primary purpose of the @HP Employee Portal System was to simplify the relationship

between HR functions and those internal clients the function serves, namely, the employees of HP

Fiorina recognized the @HP Employee Portal would have increased employees satisfaction with

the HR dependent in general.

The @HP portal was designed to increase the ease and speed of access to internal communications

and corporate information in an attempt to increase management effectiveness and production

capacity of HP employees. Information on the @HP Employee Portal is standardized and global

while addressing local concerns by using multilingual formats. By introducing the @HP Employee

Portal, HP counts on reducing the HR and IT operating costs without sacrificing high quality and

up to date services and content. Ultimately, HP’s aim was to increase integration among the diverse

businesses and to reap the benefits derived in terms of cost reduction, increased efficiency and

overall the effectiveness. The scope of the project was to go from a vision of HR predominantly

oriented toward providing personnel with basic services (i.e. bureaucratic and administrative) to

one that sees HR provide added value and consistency in its typical functions such as recruiting,

compensation and benefits etc. the declared objective was to create an HR department that would

become a strategic partner in managing company change and professional growth for all

employees.
30
HP’s hopes for the success and utility of the @HP Employee Portal were demonstrated by the

CEO personally and enthusiastically presenting the implementation plan. The proposed change to

the delicate employee-company rapport was entrusted to the HR Executive Director who would

manage this vital and large-scale corporate change. In addition to the corporate benefits derived

by using the portal as a corporate tool, HR department also would be the recipient of significant

benefits. It was therefore quite evident that from the outset, the new portal would have a radical

impact on what role and services HR would manage within the new HP. In an effort to create a

new more unified, efficient and effective HR organization, HR adopted the following strategies

across the organization; 1.Create a new business model that eliminates duplicate organizational

structures in an aim to empower a single global organization. 2. Designate standard processes to a

global service delivery model throughout the entire company worldwide.3. Define an e-business

strategy as a first step in realizing a business-to-employee portal for use by every HP employee

worldwide and 4. Identify a foundation technology which is a framework that integrates all the

current systems connected to the employee’s realm.

Although the @HP Employee Portal would have an impact on employees’ daily jobs by making

them easier and more productive, few employees considered the effect the portal would have on

other HR department staff itself. HR Country Leader Riccardo Benini said, “At the outset, I

wasn’t completely in favour of the portal. I was afraid it would reduce the HR staff. It wasn’t

the headcount l was worried about, but rather I didn’t want anyone to find themselves in a

bad situation. In our department, relationships matter a lot and therefore, people are not

first simply colleagues with regard to our activities, I didn’t know what would have become

of our function. I thought a part of our work would have been outsourced to the web and I

didn’t’ want the technology to steal a certain job sense from any of my staff by demotivating
31
them” (p 12). After the initial resistance Benini began an analysis of the project because it was

difficult for him to predict how HP employees in Italy would accept the new portal and

consequently how HR’s role would have changed.

Kurt Lewin’s CATS at work

In order to resolve Benini’s and others resistance posed by the Employees of HP, HP adopted Kurt

Lewin CATS to implement the plan. The context of the planned change were defined and the

implementation stage progressed through successive Changing As Three Steps (CATS).

Step 1 – Unfreezing: Helping users become aware of the new change and bringing to the surface

the values upon which these actions may be based. Step 2 – Moving: Introducing users to new

mental frameworks and behavioral patterns and helping users with these new patterns. Step 3 –

Refreezing: Helping users internalize these new behaviours and habits.

The Lewin’s CATS formed the basis for Researches common framework by which change is

introduced, adopted and finally institutionalized in organizational behaviours. Managerial actions

can help manage change and develop successful IT implementation plans (Leonard-Barton &

Deschamps, 1998).

Greater involvement causes greater “ownership sentiment” and will result in more positive

attitudes toward the change (Barki & Hatwick.1994). When future users (i.e. employees)

participate in the implementation by giving suggestions (which are heeded and adopted), their

commitment to the project will increase (Strauss. 1998). People must be sure their contribution

will be relevant to the quality of the output (Reichers, Wasnous & Austen. 1997). The

implementation team collects feedback on the system, adapts the system accordingly and shares

32
progress and results. This positive attitude in turn can generate a high degree of system knowledge

that increases perceptions and intention to use (Barki & Harwick.1994).

In spite of the initial resistance by employees, HP planned to launch and “go live” with the @HP

Employee Portal around the world by 2002. This was actualized by developing a centralized

implementation plan. The plan made allowance for regional or national variations based on socio-

cultural dynamics of the affected regions. The first countries involved in the project were the

United States and three European Countries where the first version of the portal was released in

April 2000. The second release was in September, 2000 which involved Italy, Spain, the

Netherlands and Ireland. HP’s implementation plan required dedication and organizational effort

to be able to “go live” by the deadline set by its management. In order to identify and efficient

implementation methodology. HP Staff analyzed its HR organizational structure and involved all

groups broken down into corporate Europe and local functions both horizontally and vertically in

the various divisions. The horizontal functions included leaders from Staffing and Recruitment,

Relocation, compensation and Benefits; Enterprise Work Force Development; Industrial

Relations, HR Services and HR/IT. The vertical functions represented a group from the Business

Managers who served as internal consultants. The implementation methodology was based on Pilot

Testing and feedback referred to as “Evolving Ideas” by HP. This conceptual approach was shared

all over HP’s operations all over the world and implemented locally with the creation of an HR

function Task Force. By January 3, 2001, HP announced the @HP B2E Portal Global HR

Communication Plan as stated in Table 4 below with the following objectives: 1. to continue to

build awareness of and excitement for the @HP Employee Portal among HP managers and

employees; 2. to create an understanding of the changing role of HR and the new delivery model

for HR services; 3. to clearly articulate the audience specific benefits of HR in @HP and to
33
communicate the long term vision of the portal; 4.to drive employee usage and adoption of HR

services and applications in @HP; 5. to establish @HP as the channel for receiving HR news and

information; 6. to articulate the importance of the phased approach for portal integration and 7. to

improve employee usage of appropriate help channels.

TABLE 1

@HP B2E Portal Global HR Communication Plan

Channel Vehicle Audience
@HP Portal New HR @HP section All audiences
HR @HP “Pick of the Week” HP employees and managers (by
region)
HR @HP vision and road map All audiences
HR Exchange E-kit (FAQs, Presentations, etc.) HP Employees and Managers
HR’s weekly message (HR HR Community
Community)
E-mail Newsgrams HP employees and manager
Employee and manager messages HP employees and manager
(HR’s distribution lists)
Electronic/Other E-cards Employees and managers
PowerPoint presentations All Audiences
Videotape HP employees and managers in
manufacturing sites
Voice Mail High-level, strategic messages form All audiences
Carly and “Four Tops”
Regional and site-specific messages HR community, employees,
managers
Events Training sessions via Net Meeting or HR community, HP managers
Web-based “classroom” and employees
HR @HP Demo Stations Employees and managers

34
 HR case study presentation External
Virtual visits All HR
HR Strategic Council Senior HR executives
Print Articles (regional, site-specific All audiences
publications)
Quick reference guides Employees and managers
Posters/signage All audiences

HP HQ decided to implement the communication plan as an executive order to improve HR portal

acceptance among employees. In order to promote utility and relevance of the new HR portal, local

subsidiaries of HP’s HR functions received a communication plan consistent with Lewin’s CATS

demonstrated in the theoretical framework designed for HR portal implementation below;

35
THEORETICAL FRAMEWORK FOR HR PORTAL IMPLEMENTATION

Figure 9

Change Management IT User Acceptance Model The Outcome of I.T

Implementation

Context Process
General General 1
Contextual- - - - > Implementation
Individual Intention
Factors Plan
2a Reactions to to use Actual Use of IT
Local - - - - - - - - ->Local using IT
Contextual Implementation
Factors Plan

2b

---------------> indicates that contextual factors determine how general and local plans need

to be designed to be more effective

Indicates there is a cause-effect relation between variables

1 - 2a – 2b Indicates the number of the proposition presented in the paper

HP’s implementation strategy planned to influence employee’s perception in order to influence

their usage behaviour. All subsidiaries of HP were made responsible for varying HP Head

Quarter’s (HQ) implementation plan to fit the cultural context of their local environments.

Italy stood out as the subsidiary with the most initial apprehension for the portal thereby

constituting resistance. However, the @HP Employee Portal implementation team constituted by
36
the HP HQ’s executive order relied on the assistance of the Employee relations department for its

invaluable assistance in facilitating the change process. Evidently, the joint effort of the teams

contributed immensely to the success of the implementation plan.

Following the launch date, specific e-mail boxes were set up to collect feedback on the new portal.

The button “feedback/support” at the top of the portal interface was added to collect comments,

suggestions and most important, proposals for the release of the second version. The initiatives are

closely related to the strategy of “high level of employee involvement” adopted by HR. in

designing the Italian site, key organizational functions, Industrial Relations and other HR figures

were involved as well as the Managing Director and Marketing Departments. Consistent with the

implementation model, the “feedback/support” function opened up the improvement evolution

becoming a tool that satisfies execution. Since going live on March 5, 2001, other releases have

followed. The success of the implementation model was measured by the number of hits (hits is

the number of times a server is accessed by web site users) on the @HP Employee Portal site in

relation to the number of employees in individual subsidiaries. As shown in Table 2, Italy was

recorded as one of the most successful launches in terms of the variables adapted to measure

success i.e. hits, pages viewed, users sessions and unique visitors in spite of its initial resistance.

Table 2
@HP Employee Portal
Usage in Italy, Germany, Spain, and the Netherlands in March, 2001
Italy Germany Spain Netherlands
Employees Number of employees 1,296 5,959 1,489 1,441
Hits Entire site (successful) 17,195 8,496 7,336 1,936
Average per day (about 23 days) 747 369 318 84

37
 Page Page viewed (impressions) 4,914 2,970 3,137 783
viewed Average per day (about 23 days) 213 129 136 34
User Visits 1,520 1,221 576 202
session Average per day (about 23 days) 66 53 25 8
Average visit length (minutes: 08:11 7:41 7:35 6:42
seconds)
Median visits length (minutes: 03:08 2:26 2:40 3:36
seconds)
International visits 0 0 0 0
Visitors Unique visitors (A + B) 791 793 336 143
Visitors who visited once (A) 473 601 232 123
Visitors who visited more than
once (B) 318 192 104 20

Nearly two years after its initial launch, Carla Di Martino, IT Manager for HR in HP Italy, defines

the experience as a concrete success.

38
METHODOLOGY

The study is based on a review of existing literature on organizational change management. The

Researcher adapted secondary data obtained from the works of previous researchers to validate the

theoretical underpinning of the study. The empirical review was based on a case study research

that found that the implementation of the 3 phase CATS originally propounded by Kurt Lewin as

a classic change management theory later adopted by other theorist and integrated as unified theory

of acceptance and use of technology is essential for an effective organizational change

management.

39
DISCUSSION

The study is a reflection that when technology enters into the organizational design, employee

usually express concern that machines will substitute persons and such concerns require a scientific

management approach in order to allay the fears and get employee support for the realization of

the organizational vision. Evolving state of the business environment regularly puts pressure on

organizations to change, effective organizations should therefore be flexible to changes in order to

optimize business performance and attain organizational objectives. Resistance to change has been

linked to inertia which can be at organizational, group or individual level.

Change Management process should thus be effectively managed in a systematic manner as

propounded by the theorist reviewed in this study in order to attain the desired result of the

proposed organizational change.

40
SUMMARY, CONCLUSION AND RECOMMENDATIONS

The study introduced the concept of change with a focus on organizational change. It highlighted

various theorist supporting the concept of change and adopted Kurt Lewin’s three step change

(force-field theory) as the underpinning theory for the study. A case study of HP worldwide was

reviewed, applying the unified theory of acceptance and use of technology based on Lewin’s 3

phase CATS of unfreezing, movement and refreezing which validated the proposition that

effective organizational change management require the involvement of employees at all levels in

order to optimize the benefit of the change objectives. The methodology of the case study was

based on secondary data obtained from the report of previous researchers on HP’s case study. The

Researcher found that proper management of organizational changing employing the strategies

embedded in the adopted theories is capable of eliminating inertia in organizational change

management.

It is therefore recommended that organizations intending to implement change initiatives should

anticipate the reaction of its employees in its change plan and should be prepared to integrate

employees in the process of change in order to gain acceptance and achieve the desired objectives.

41
LIMITATION OF THE STUDY

The available data is simply based on one month information on @HP Employee Portal

implementation for four countries in Europe. Data spanning a longer period may reveal a different

result. The nature of the study also limits its applicability to HP in Europe. Other variables such as

cultural diversity, demographic considerations and government policies may shift the paradigm of

its outcome in HP operations in other countries such as Africa, Middle East and Asia.

42
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