FACULTY OF BUSINESS AND MANAGEMENT

SEMESTER SEPT / 2019

BBMC4103

CHANGE MANAGEMENT

NAME : NEDY LEDY WONG

MATRIC NO. : RF 146024-001

NIRC : RF / 146024

TELEPHONE NO. : 013 - 8981837

E-MAIL : [email protected]

TUTOR'S NAME : PIUS BIN AMIR

LEARNING CENTRE : SABAH LEARNING CENTRE

 TABLE OF CONTENT

PAGE

TITLE PAGE i

TABLE OF CONTENT ii

1.0 INTRODUCTION 1

1.1 Background Of Company 1

1.2 The Company’s Real Problems 2

2.0 LITERATURE REVIEW 2

2.1 Review Two Theories 3

2.2 Analytical Statements 4

3.0 INCIDENT ANALYSIS AND SOLUTION 6

3.1 Apply The 12 Steps To Real Scenario 6

4.0 CONCLUSION 9

4.1 Team Structure 9

5.0 REFERENCE 10
1.0 INTRODUCTION

1.1 Background of Company

The petroleum industry is one of the richest industries in the world. In Malaysia, the
petroleum industry is under the stewardship of Petroliam Nasional Berhad (PETRONAS).
This company which was initiated by government holds the supreme rights of the
hydrocarbon resources, which is found in Malaysia. This company is involved in a various
program, which includes upstream exploration and production of oil and gas to downstream
oil refining; marketing and distribution of petroleum products; trading and so much more
(Petroliam Nasional Berhad, 2015).

According to the official website of PETRONAS organization, there were only 15

staff and just two phone lines in the year of 1974. Then, they started their performance from
the office of the Prime Minister’s Department in Jalan Dato’ Onn, Kuala Lumpur back in
1974. Later, PETRONAS launched their first Production Sharing Contract (PSC) in 1976 and
modified the concession system governing oil exploration and exploitation to the more
equitable PSC system. Thus it’s indicating the responsibility of PETRONAS Carigali Sdn
Bhd. Beyond their role as an operator; they embarked on exploration and merchandise
activities with the incorporation of PETRONAS Carigali Sdn Bhd in 1978. Finally in 1981,
PETRONAS had their own merchandise in Taman Tun Dr Ismail, Kuala Lumpur which is
happen to be their first gas station ever. During 1984, HQ had moved to Kompleks Dayabumi.
In 1985, the organization had started the first exportation of fertilizer and liquefied. Later in
1990, PETRONAS had the first overseas operation in Myanmar.

PETRONAS organization has been growing to a massive international gas and oil
company. Its merchandise was attentive in thirty five different countries. The group enclosed
103 owned subsidiaries, 57 joint companies, and 19 outfits at the end of March 2005. Finally,
at 31 August 1998. The 42 years of Independence Day of Malaysia, they chose to moved
into headquarter place in Kuala Lumpur, Malaysia.

In PETRONAS Company, employees can be divided into two groups which are the
group in working in onshore and offshore. Onshore division only deals with technical and
non technical while offshore staff deals with all the technical parts. Over the past few years,
the employees in PETRONAS are always experiencing the development, advancement, or
even an excellent training practice. This is because; the company are always looking forward

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to generate more competent and excellent employees by providing training and development
which is based on skill group on specific field.

Beside that, to take care of the employees, they are provide with the right skills,
knowledge and abilities to complete their job, training and development plays its important
role towards the growth and success of PETRONAS. In this case, PETRONAS insiders are
confidential not only for the case of training and development activities but also giving
advantage from the daily casual counselling and instructing

1.2 The company’s real problems

Training is not just important in a company but it is vital. Therefore, there are several
advantages of training and development to the PETRONAS organization. The first
advantages are the in-house training could save the cost. By providing in-house training, the
cost of representative will be decrease and the scenario would be different if we sending
employees to public training courses. Secondly by providing their own training practice,
PETRONAS organization will get a lot of benefits because it is easy to draft the training
schedule besides it fits around the working schedule of the employees and the location of the
training. Furthermore, it’s saving trainee’s travel cost because there are some of the
PETRONAS’s trainee need to travel further than their offices and suffer extra costs like
transport fees, driver and so on. Next one is can enhance the social relations among the
workers, all the trainee will be in a same room which is full of delegates from various
departments which they will be able to encourage greater team work, progressive and
understanding of each other’s role.

On the other hand, the issue of in-house training is include extra administration
burden that PETRONAS need to make sure there have suitable training room, equipment,
trainer parking to get the delegates to the training centre. At the same time, some of the
trainee may not take it as seriously as they might attend just to have a break from their job or
don’t turn up when the course is conducting on another day. Therefore, it end up with no
networking opportunities during this training as employees are not allow to have networking
and learning from another company. As a result, this will place some pressure to
PETRONAS’s employees, if they are offsite training then they cannot be contacted to class
however if they are onsite they can be stop being involved in a classroom if needed.

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 Meanwhile, there are also some issue in technical training particularly in cost. When
the company sends the employees for training, the company has to pay off employees to
invite the trainer. Therefore, it will increase the expenses of the company. Moreover, a good
trainer may be expensive and causes over budget. Besides, the disadvantage of technical
coaching is time necessities. The company should pay a many time for coaching workers
however the corporate don’t have abundant time. If the corporate offers the time that doesn’t
enough for coaching, it may causes employees do not know everything that they have to learn.
The trainer will also have to be compelled to rush the time is not enough and causes the
trainer goes through some topic that’s vital and ignore some topic that employees have to
learn too.

Nevertheless, education grant has disadvantages as well. Grants have a slender down
by proscribing the quantity of workers to use with the size of job fitting. Employees who
obtaining the education grants usually need to work more durable and lots of examine and
strategic to fulfil individual’s demand. Moreover, it’s conjointly increase an organization’s
expenditure since specific activities should be enclosed in a number of the project. In addition,
revolution of technology nowadays up growth. Legislator and different charge of education
or coaching would like a lot of funds to re-establish the changes.

2.0 LITERATURE REVIEW

2.1 Review two theories

2.1.1 Lewin’s Change Model (Three Stages)

Lewin (1951) introduced the three-step change model. In his research, he considers behaviour
as a dynamic balance of forces working in opposing directions. Driving forces facilitate
change because they push employees in the desired direction. Restraining forces hinder
change because they push employees in the opposite direction. Therefore, these forces must
be analyzed and Lewin’s three-step model can help shift the balance in the direction of the
planned change.

2.1.2 Framework of Mento, Jones & Dirndorfer (12 Steps)

The research of Mento, Jones and Dirndorfer (2002) is outlined a framework for change.
There are 12 steps in are recommended when one wants to implement change. These 12 steps
are based on lessons learned from the change models discussed above filtered through the

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actual experience that occurred throughout the late 1990s. These 12 steps are shown
holistically as visual metaphors ( Davenport, 1999).

2.2 Analytical statements

According to Lewin, the first step in the process of changing behavior is to unfreeze the
existing situation or status quo. The status quo is considered the equilibrium state. Unfreezing
is necessary to overcome the strains of individual resistance and group conformity.
Unfreezing can be achieved by the use of three methods. First, increase the driving forces that
direct behaviour away from the existing situation or status quo. Second, decrease the
restraining forces that negatively affect the movement from the existing equilibrium. Third,
find a combination of the two methods listed above. Some activities that can assist in the
unfreezing step include: motivate participants by preparing them for change, build trust and
recognition for the need to change, and actively participate in recognizing problems and
brainstorming solutions within a group (Robbins, 2003).

Lewin’s second step in the process of changing behaviour is movement. In this step, it
is necessary to move the target system to a new level of equilibrium. Three actions that can
assist in the movement step include: persuading employees to agree that the status quo is not
beneficial to them and encouraging them to view the problem from a fresh perspective, work
together on a quest for new, relevant information, and connect the views of the group to well-
respected, powerful leaders that also support the change.

The third step of Lewin’s three-step change model is refreezing. This step needs to
take place after the change has been implemented in order for it to be sustained or “stick”
over time. It is high likely that the change will be short lived and the employees will revert to
their old equilibrium (behaviours) if this step is not taken. It is the actual integration of the
new values into the community values and traditions. The purpose of refreezing is to stabilize
the new equilibrium resulting from the change by balancing both the driving and restraining
forces. One action that can be used to implement Lewin’s third step is to reinforce new
patterns and institutionalize them through formal and informal mechanisms including policies
and procedures (Robbins, 2003).

Mento’s model (2002) is the only one which includes a step for monitoring and
measuring change as it is implemented. Successful implementation of change involves
discipline. Collins (2001) in his book, Good to Great, indicates that the most successful

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organizations should have disciplined people, disciplined thought and disciplined actions.
People should be held accountable for their actions and this cannot occur unless
measurements are in place. Newcomb (2005) suggests that leaders have to be accountable to
the organization for the results of their plans and the outcomes of the organization.
Accountability requires a master plan which can be segmented into smaller projects, assigned
to teams and monitored by team leaders. This plan can be tracked with target dates for
completion and evaluation (Newcomb, 2005).

2.3 Comparison

Lewin’s (1947) notion of unfreezing, movement and refreezing as the essential components
of the change process. In essence, the model focuses on the leader’s role in creating urgency
for the change, crafting and communicating the vision, leading the change, measuring the
progress of change along several dimensions, and institutionalising the change.
Institutionalising the change, or the refreezing, involves changes in the organisational design
factors, ie creating a fit of systems and structures to enable change. Lewin's model is very
rational, goal and plan oriented. It doesn’t take into account personal factors that can affect
change. Conversely, Mento et al. (2002), 12 steps theory and practice proposes that
behavioral change is affected by environmental influences, personal factors, and attributes of
the behavior itself. Lewin’s model makes rational sense, but the Social Cognitive Theory
because it takes into account both external and internal environmental conditions.Table 1
shows the comparison between Lewin’s Model (1945) and Mento’s Model (2002).

Action Research Model/Theory Lewin’s Model Mento/Jones/

Collier, 1945 (1945) & Schein’s Dirmdofer’s
Lewin, 1946 French, 1969 Model (1980) Model
Schein, 1980 (Adaptation of (2002)
Lewin’s Model)
*1958 Lippitt,
Expanded Lewin
Identify Lewin-Step 1 The idea and it’s concept
Problem(s) Unfreezing
Consult with Schein-Stage 1 Define the change initiative
Behavioral Need for Change;
Science (OD) People must be
Expert dissatisfied with the
present.
Gather Data & Lewin-Step 2 Evaluate the climate for change
Begin Moving/
Preliminary Changing
Diagnosis
Provide Feedback Schein-Step 2 Develop a change plan
to Client Cognitive
Restructuring

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 OD expert & Lewin-Step 3 find and cultivate a sponsor
client members Refreezing change to
diagnose make permanent.
problems
OD expert & Schein-Step 3 prepare target audience, the
client jointly plan Refreezing involves recipient of change
actions self and others.
Take action Schein - To be Create the
permanent, change cultural fitmaking
becomes a part of the
self, relations with change last
others, & system in
Which people exist.
Gather data after *Lippitt, Watson, Develop and
action Westley expand choose a change
Lewin’s Model leader team
Measure & *After Step 1, add Create small wins
Evaluate results Establish a change for motivation
relationship
Feed back results *After Refreezing, Constantly and
add Achieve a strategically
terminal relationship communicate the
change
Re-diagnose *Lippitt, et al Five Measure progress
Phase Change of the change
Model (1958) effort
New action if Integrate Lessons
necessary learned
Table 1: Comparison of Selected Change Models.
Source: Pryor, Taneja, Humphreys, Anderson, and Singleton (2008).

3.0 INCIDENT ANALYSIS AND SOLUTION

3.1 Apply the 12 steps to real scenario

In the case if defence industry, PETRONAS as an organization, directional their organization

program and strategic, setting their practices of coaching and development for the long run.
In order to apply the 12 steps into the issue, we should consider the issue one by one. It is
important to highlight the idea and its context. Lending from Senge (1990), as source for
ideas for improving the organization can arise through creative tension. PETRONAS should
define the change initiative. For example if the trainee may not take it seriously in the
training, there should be another alternative to change. By defining the change initiative way
according to Jick’s step 1 for analyzing the organization and it needs for change (Jick, 1991a).
The third step is evaluating the climate for change. In this context, compatibility of change
goals with the PETRONAS Long-Run Strategic Plan (LRSP) is playing a significant role.

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 The fourth steps are tracking closely the plan by including specific goals and provide
detailed and clear responsibilities for strategies. PETRONAS has created use of technical
coaching, in-house coaching and education grants as their practices for the employees’
coaching and development. Comparing with the similar industry as thought SHELL Global or
ESSO, they need applied some skilled training like publicity and media programme for his or
her employees in keeping with their working experience. It’s higher attending a module with
representative from alternative corporations. This will permit networking interaction a lot of
and learning from each other.

Besides, the fifth steps are PETRONAS should find and cultivate sponsor in terms of
training and development. PETRONAS had used training and development appropriately. For
example, PETRONAS used technical training cause’s employee’s career advancement and
causes employees lead to personal growth. In this case, PETRONAS will be more progress
through training and development. Thus, training and development might causes the
corporate become a lot of effectiveness though it’ll bring some disadvantages to the corporate.

Apart from that, the sixth step is by preparing the target audience, the recipient of
change. In this case, employee productivity is how the organization measures the capability
of employee by using their overall merchandise as compare to the organizational performance.
Productivity is the level of outcome where employees can contribute their best effort to
achieve the organizational goals (Kandi, 2012). Besides, create the cultural fit making the
change last. productivity can be seen as how an organization can use the available resources
to maximize their performance, optimize energy and improve overall efficiency (Olaniyan &
Ojo, 2008).

In other words, it is meant by how well an organization converts their input resources
such as labours, materials, equipment and many more into goods and services (Leblebici,
2012). The eight steps are to develop and choose a change leader team. Employee
productivity can be indirectly improved when an organization provides training and
development to their employees. By doing so, the organization can increase the employee’s
work performance but also offer chance for them to have a better understanding on their jobs.
Therefore, they can perform well in terms of their productivity in work with knowledge,
ability and skills to guide them to achieve a better performance. Furthermore, employee
productivity can be improved based on the employee’s competitive level. This is close to step
9, by creating small wins for motivation. Moreover, the measure of work productivity can be

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affected by the satisfaction of employee towards the organization. For examples, their
satisfaction level increase when the expectations regarding on the training and development
provided by the organization was achieved. Therefore, employee productivity can be
positively impact to the organization (Hallgren & Olhager, 2009).

Lending from Tahir et al. (2014), an organization can reach its goals and objectives
with motivation, innovation of employees which can cause employees to be more productive
as they will commit and contribute more towards the organization. Therefore, by constantly
and strategically communicate the change between the organizations and employee
productivity can determine the well being of the organization. Furthermore, an appropriate
training provided for employees can give positive impacts on employee productivity towards
organization. Employees can overcome any problem related to the organization easily with
better organizational learning therefore employee should make use of the training and
development provided by the organization. Hence, mutual understanding between the
working environments among employees including with the top management are shared
among each other.

In order to have an effective training for the employees, measure the progress of the
change effort is helping the organization to provide the employee acquired the specific skills
to run the business. A well-planned training and development program is a complex task as
human resource needs to determine the training methods and delivery styles, fix a training
period and selection of trainers. Besides that, technical training generates personal progress
among workers. This is because they are learning something in a short period of time through
technical training. This is can be seen in Zin, et.al (2013) work which is they defines that the
job rotation has a positive relationship in career development. Meanwhile, the last step ois
integrate lessons learned. Koontz and Mills (1984) supports this statements when they said
that job rotation is the top type in training and it was create to ease the employee with the
specific information about the positions that might available for the employee as site
Oparanma, A and Nwaeke, (2015). In addition, technical training may help new employees,
in the positions of career- oriented, and refresh the skills and knowledge of older employees
so that they can keep up in their working environment and build up better relationships
between employers and employees

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4.0 CONCLUSION

4.1 Team Structure

PETRONAS organization might be well known and established as an oil and gas company
over the world. In fact, the organization has been running for 3 decades. However, it is still
experiencing fluctuated trends in business. Sometimes rise and fall irregularly in numbers of
selling amount. But, this problem can be can be sped up by several strategies.

PETRONAS got to notice various practices of training and development for his or her
employees. To deciding a protracted term profitableness and well management of an
organization, the quality of employees are the major issues in a company throughout some
training and education. It is a decent guiding principle to devote a wonderful worker, which
can improve the company’s productivity consequently. A suggestion that is PETRONAS may
propose a property organization and leadership techniques with the institutes that embody
Universiti Teknologi PETRONAS (UTP), Institute Teknologi Petroleum PETRONAS
(INSTEP) and PETRONAS Management Training. It ought to conjointly invite some
profession institutor from different country to conduct company workers. Therefore, hope
that it could benefits PETRONAS to achieve some valuable employees and able to increase
company’s employee effectiveness and efficiency.

In conclusion, PETRONAS is a company that categorized under the oligopoly type of

market structures. This company is one of the government’s assets and also one of the
companies that provides petroleum and gas for the country. PETRONAS has been growing
nationwide and worldwide since previous years. The products also being exported and used
in other countries such as Egypt and Africa. By exportation the merchandise, it is making a
lot of profits and as such the country benefits a lot from it. Production of fossil fuel and gas
don’t seem to be the sole issue that it take care of however additionally collaborate with
alternative markets like education and supply support loans to those students which need
them. Various establishments had been established by PETRONAS as their main objective is
to counterpoint the state with quality education.

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