[Year]

Strategic Change
Management
PART - A
NAME
Table of Contents
Introduction...............................................................................................................................................2
About the company....................................................................................................................................2
1. Understanding the concept of strategic change management in organizational context..............3
1.1 Current and seminal theories, models, and concepts relevant to strategic change
management...........................................................................................................................................3
1.1.2 Definition of strategic change...................................................................................................3
1.1.3 Purpose of Organizational Change..........................................................................................3
1.1.4 Change Management Theories................................................................................................3
1.2 Role of leaders and managers as agents for change................................................................4
1.3 Types and styles of organizational change...............................................................................6
2. Different perspectives on change......................................................................................................8
2.1 Change from an organizational cultural perspective....................................................................8
2.2 Change from a power and politics perspective..............................................................................9
2.3 Change from an organizational learning perspective.................................................................10
3. Change management strategy in organizational contexts............................................................11
3.1 Influence of external and internal environment on organizational change.........................11
3.2 How the change transition is designed by strategic leaders and managers.........................13
3.3 Critically evaluate ways in which strategic management enabled the conditions for
organizational change in Heineken....................................................................................................14
3.4 Importance of employee engagement for organizational change.........................................15

1
Introduction
The report is prepared upon Heineken (Pvt) Ltd which was in need to refocus the organizational
change strategy.

The first chapter begins with a discussion of the current ideas, concepts, and models that are
pertinent to change management. The function of leadership as change agents is next discussed,
followed by kinds and styles of organizational change and their contextual significance to change
choices.

The second chapter discusses the many points of view on change from the viewpoints of
corporate culture, power, politics, and learning.

The third chapter examines the internal and external forces that influence change, followed by a
study of strategic management leadership in transition planning.

About the company

Heineken is a Dutch company which was originated in 1864. It was founded by Gerard Adriaan
Heineken whereas as the ownership is passed down from among family members. The company
is the World’s most international brewer whereas they are the leaders in developing and
marketing premium beer brands.

Heineken currently operates as a multinational with the presence over 70 countries by employing
more than 80,000 employees worldwide. The operating industry is food and beverages, and the
headquarters are situated in Amsterdam.

2
1. Understanding the concept of strategic
change management in organizational
context
1.1 Current and seminal theories, models, and concepts relevant to strategic
change management

1.1.2 Definition of strategic change

Change management is defined by Change management is defined by (Moran, 2001) as a process
in which the organization's direction, structure, and capabilities are subjected to continual
renewals to meet the changing needs of internal and external stakeholders. Similarly, (Knight,
2008) argues that changes can be rapid or gradual, major, or small, can occur over time or
abruptly, and can occur at both the strategic and operational levels.

1.1.3 Purpose of Organizational Change

The idea of organizational change, as well as techniques to change implementation, are well-
documented in the literature (French, 1995). Change has been described as the ‘Stable State' of
businesses today by major management writers. Organizational change can be traced back to
factorial shifts in the external environment, market dynamics, or internal demand fluctuations.
Many believe that in a rapidly changing period like the twenty-first century, businesses cannot be
resistant to change unless they define change as a constant necessity.

1.1.4 Change Management Theories

 Kotter’s ‘Eight Stages of Change’

In terms of strategy, execution, and nourishment of change, (Kotter, 1995) developed the 8-step
change model for managerial functions. This is a crucial step for leaders to take. The steps are as
follows:

i. Establishment of a need for urgency

ii. Formation of a powerful coalition
iii. Creation of a vision
iv. Communication of the vision

3
 v. Empowering others
vi. Planning for short term wins
vii. Capitalizations on early wins the motivate change
viii. Recognition of new steps

According to (Kotter, 1995) failing to satisfy these phases efficiently might have negative
consequences for the change process.

 Mintzberg’s ‘Change Cube’

Drawing in terms of formal to informal, macro to micro, casual to formal, bottom up to top
down, and planned to non-planned, demonstrates the organizational transformation approach. An
organization can change the direction of its present strategy or structure. A change in one aspect
of strategy or structure might cause changes in several others (Mintberg, 2003). These
interdependencies may be successfully handled after the cause-and-effect relationships are
addressed.

 Tuchman’s ‘Frame-Breaking Change’

Based on different organizational research, (Tushman, 1988) proposed a framework for change
management. The proposed organizational life model includes incremental change periods that
merge or are interspersed with intermittent change. Fine tuning and gradual adjustments are two
sorts of changes they show.

1.2 Role of leaders and managers as agents for change

It is commonly agreed by the researchers and other scholars that the role of leadership in the
organization is a fundamental requirement in managing the change as well as addressing the
issues relevant to change. (Kennedy, 2000.) claims that the leadership role is determining factor
in addressing the issues in organizational change and an effective leader is capable at bringing
the effective change to the organization. (Fleming.J, 2006) discuss in their book, Organizational
change that leaders are the agent for change who are at the capacity to incorporate changing
initiatives to the organization.

4
The following factors will explain how leaders will effectively manage the dimensions of
change.

Advocate – Being a role model

An effective leader should be able to walk the talk whereas they need to be the behavioral
models that employees will eventually want to follow. For example, if they claim that it is
important to take part in the training for change while themselves claiming busy will set a bad
example for their employees whereas they will tend to devalue the need for training as well. The
leaders should always be involved and be exemplary for the employees to follow them. They
should be onboard with the change themselves while promoting the benefits whereas they can be
transformational leaders change coach their employees.

Communicator - Communicate About the Change

It is necessary that the change is communicated to the employees by the leader. This can be
helpful on lessening anxiety of not being aware about the implications of change while keeping
everyone going forward in the same direction with the change. The change management team is
heavily relied upon the leadership whereas they would keep the employees informed and
engaged with the change.

It is also vital that the employees understand what is expected from them during and after the
change process with some knowledge about important details such as times and places of
training. Similarly, successes in milestone achievements should be communicated with a
celebration wins and rewards to keep the employees rather engaged and positive.

Also, this change leadership skill is responsible to communicate the important information such
as resistance to change and the adoption of their teams to the change management team.

Resistance Manager - Manage Employee Resistance to the Change

One of the most important roles of the leadership is the recognition and management of
employee resistance to change as the resistance can be a determining factor that can enable to the
failures in change.

5
The change management and leadership are heavily focused upon managing resistance
proactively and reactively. This involves the understanding on ways to recognize resistance to
change as well as being solution oriented to resolve that.

Liaison - Facilitate Exchange Between Change Team & Employees

Liaison within the employees and change management team and employees is important to keep
the smooth flow of communication between them. The employees can have questions relevant to
the change and the ways in which they ate affected by them whereas the management is not
aware about them. During that point they should reach the change management team and get
answers on behalf of the employees.

This leadership skill involves the ability to as an eye and ear for the change management team
while report their inputs back to the employees.

Coach - Mentor Employees

The effective leadership should be capable at guiding and coaching employees to the change.
Even though the resistance is not outright, when a change is imposed, employees often feel
anxious, scary, and stressed about the ongoing transition.

1.3 Types and styles of organizational change

The typical usage of organizational change stands to describe a significant organizational change
such as restructuring or addition of new products or services to the portfolio. This is contrasting
with smaller changes such an adoption of a new computer system. Such that way organizational
change can be seen as an indefinite phenomenon that is helpful in describing change in various
dimensions.

Organization-wide Versus Subsystem Change

A major restructuring, collaboration or rightsizing can be identified as an organizational wide

change. Firms undertake organizational wide change in order to reach a different level in the life
cycle such as going from a reactive entrepreneurial organization to more stabilized and planned
enhancement.

6
Experts suggest that an organization change is supported by a systematic change in culture
whereas cultural change is also an example for an organizational wide change.

Addition or elimination of products/ services, rearrangement of a departments or implementing a

new process to deliver a product/service can be taken as examples for subsystem changes.

Transformational Versus Incremental Change

Changing the structure of the organization from a hierarchical order to self-directing teams can
be identified as an example for transformational change. This is also sometimes referred as
Quantum change. Similarly, incremental change describes the continuous improvements in
quality management process or introduction of new technologies to increase the efficiencies.
Incremental change is very abundant in the organizational context.

Remedial Versus Developmental Change

Change can be incorporated as a remedial solution to prevailing conditions such as improvement

of poor performance, reduction of burnouts during the production, making organization much
reactive than proactive, addressing budget deficits. The remedial processes seem to be rather
urgent as they are addressing a current issue. The success determination is easier as it can be
evaluated by resolving the problem or not.

Similarly change can be recognized as developmental as it can make the successful situations
more successful. This can be exampled by expanding the number of customers served or pseudo
successful products. These projects seem to be more universal and vaguer than the remedial
projects depending upon the importance of achieving given goals to the organization.

Unplanned Versus Planned Change

Unplanned change is usually occurred because of a sudden incident in the organization whereas
members of the organization will be highly reactive to that. Such an unplanned change can occur
in an instance where the CEO will be leaving the organization, occurrence of a public relational
problem, loss of customers due to poor product performance.

Planned change is resulted by the decisions of the leaders in the organization to identify the need
for major changes and being proactive to the organized and accomplish the change through a

7
systematic change. The planned change is a result of a successful implementation of strategic
plan, reorganization plan and other change applications of this extent.

2. Different perspectives on change

2.1 Change from an organizational cultural perspective
The change agent should be cable at managing the change effectively by being forward thinking
and following with the new trends in the business and offering new products/services and
recognizing the competition. Such that way the change agent should smoothly manage the
interaction with organizational culture and climate.

Culture provides a framework for considerations of the management in the organization and
decision making relevant to the structure of the organization. When managing the change, the
national culture as well as the organizational culture should be closely monitored. (Pritchard,
2013)

(Schein, 2010) states that organizational culture is result of dynamics within the organizations
whereas as enacted through the interactions with each individual in the organization. Further,
they are shaped through the behaviors of the leaders.

(Ovidiu-Iliuta, 2014) claims that development of a strong organizational culture is a

fundamental requitement for attaining the change management goals. Similarly, it can act as a
blockade to impose a strategic change.

(Lunenburg, 2010) presents five main elements that help to recognize the direction for
understanding and creating the organizational cultural model.

Adaptability – Creation of change, customer oriented, creation of knowledge, organizational

learning context, orientation for customer service, adoptability to new technology, tendency for
innovations.

8
Employee satisfaction – Reward and recognition systems, cohesion in communication, loyalty
to the organization, healthy relationship with the supervisors, performance orientation.

Involvement - Employee engagement in the decision-making process; work autonomy;

empowerment; team orientation; competence development; employee engagement in decision-
making

Empowerment - Employee involvement in decision-making; work autonomy; team orientation;

competence development; employee engagement in decision-making

Team Orientation - Employee involvement in decision-making; work autonomy

Mission - Goals, objectives, and vision are all part of a strategic plan.

Consistency - Coordination/integration; core values; consensus

2.2 Change from a power and politics perspective

Politics can be described as a way prompting the policies and steering the work. Politics is
playing a vital role in the change management context. Self-interests as well as politics are two
dimensions that controls the way people feel about the change which regards to work.

In an organizational context, power and politics can be used in a constructive way to resolve
problems, conflicts and establish a consensus as a mean of driving the change. Change can
enhance the power plays and political behaviors within the organization. Change has the
potential to create winners and losers or can make individuals or teams believe that their power is
enhanced or weakened.

The use of power is an unavoidable part of organizational life; nevertheless, as we will show,
power and politics may be utilized constructively to solve issues, establish agreement, settle
conflict, and, most importantly, to drive progress.

Because change generates winners and losers – or individuals and organizations that feel their
positions will be reinforced or diminished – change in an organization may exacerbate power
struggles and political behavior. Power is frequently used to motivate change, boosting one's
own power while restricting the power of others.

9
Managerial development should assist managers in general, and change agents, in dealing with
the realities, complexity, difficulties, rewards, and difficulties of political behavior. Regardless of
employment title or rank, such counsel is applicable to everyone attempting to influence change.
Denial is an impossible goal to achieve. Acceptance without participation is naïve. It's pointless
to acknowledge someone without offering advice. Is it possible that all change agents are
politicians, that all politics is about self-interest and manipulation, and that the resultant
management archetype is a self-aware devious Machiavellian? Organizations include social,
technological, economical, and cultural dimensions in addition to a political component. Because
the issue is excluded or distorted elsewhere, in a work like this, political behavior is cast aside or
conjugated for a more concentrated consideration.

2.3 Change from an organizational learning perspective

For organizational change, there are many other ways available, one of which is the knowledge
creation stance, which is effective and necessary for achieving unified outcomes, ownership,
dedication, and participation in change processes. In addition, the implementation methods
concentrate over how personnel should improve their behavior via cooperative learning
procedures.

The goal in organizational learning should be to improve the scope of potential behaviors for the
purpose of implementing intended changed. For achieving that context, employees should first
recognize that the changes have been taken inside and outside the organization. The changes
have the capacity to trigger other changes such as in the processes which has to be accompanied
through a systematic learning. During the change implementation phase, people eventually learn
the gap that is existing between the existing condition of the organizations and the conditions
required through the change implementation. This incorporates a new strain of knowledge which
allows to accept these gaps and enhance the collective understanding.

The next phase comes as the stage of moving whereas the organization test the new behaviors
allowing the people to experience the new ways of working whereas the range of possible
behaviors will be increasing. When it comes to the institutionalizing stage, reflection will be
undertaking whereby the participants will be reviewing their roles, positions, tasks and

10
generalizations will made upon the basis of experience. This will also lead to draw conclusion
about the possibilities in the future.

A higher level of learning is required by the participants when implementing transformational

changes within an organization. It is essential to be aware about the changes on the
organizational knowledge. The change management team should be responsible to initiate
adequate learning opportunities for the participants whereas making the organization a learning
organization. It is stated that only through an enhancement within the learning abilities within the
organization, change can be successfully implemented.

3.Change management strategy in organizational

contexts
3.1 Influence of external and internal environment on organizational change.

Organizations should be competent enough in anticipating and implementing change in an

effective manner. Similarly, managers should be alerted and take actions to overcome that
natural aversion for the change shown by the employees. The first step to manage the change in
an effective way will be to recognize what change is actually and where it is coming from.

An organizational change can be described as a transformation or modifications of basic

organizational functions. Organizations often take liberty in adopting to the smaller changes on
the way with the aim of enhancing the productivity, adoption to new regulations and recruiting
new employees. However, beside from these smaller modifications, there is quite a larger
pressure looming outside the organization in the form of competition, technology and demand
that requires a larger response from the organization end.

External Factors

Demographic – The changes in the work demographic can demand a change in the
organizational culture. For example, Avon initiated his business on door to door cosmetic sales
with the support of housewives whereas they were the frontline employees. Once the more and

11
more women entered the workforce without being housewives, Avon had to find other ways to
get his product to the customers.

Social – The trends within the society can pressurize the organizations to impose changes.
Customers are more evidently becoming conscious about the environment whereas, trends have
pushed to request products that are environment friendly. As a result, breweries like Heineken
have shifted to paperless transactions and had to introduce mobile apps in order to minimize
energy wastages.

Political – The rules, regulations and restrictions that are imposed by the government force
organizations to incorporate change into the themselves. This can be something like determining
a minimum wage for employees, imposing maximum pricing for products, or banning of
importing main ingredients. From the bank perspective, this can be like controlling interest rates,
strict monetary policies whereas the bank need to adjust their strategies accordingly.

Technology – Technology can create new business opportunities as well as eliminate a current
business completely. If the organizations did not adopt according to the technological
advancements, they face the risk of eliminating from the business.

Economic – Economic recessions or growth can create a major impact over business like banks
specially. When the economy is growing, people tend to take more loan facilities and develop
investments while on the other hands deposits more savings allowing the bank to receive more
money for their investments. Similarly, in a recession context, this will be turning the other way
round making it quite harder for the bank survival. Such that way economic factors like inflation,
interest rates, per capita income will have significant impact over the business

Internal Factors

Similarly, companies also can undergo internal changes as well as the external changes. These
can be quite due to the change in external forces but can be significant enough to contemplate
discretely. The changes due to internal forces are originated within the organization are related to
the internal functions of the organization. Issue like low performance, less satisfaction, internal
conflicts, rivalries, introduction of newer management approach and new vision/mission can be
taken as examples.

12
Human Resources – In the modern business environment, human resources can know to be the
greatest tressure of the organization. They can either be the greatest strength or the weakness
depending upon the skills and motivation. Thereby employee related factors like job
dissatisfaction, low employee performance, negative attitudes can be known to be impending
reason for encompassing change to the organization.

Capital resources – Financial capital is required by the organizations for the growth and
sustainability of the business. Having adequate financial capital help them to invest on tangible
and non-tangible assets like machinery, factories, human resources, and brand. Similarly, not
having adequate financial capital means lesser investment option as well as selling or getting rid
of prevailing assets coursing changes in the organization.

Organizational Structure – Organizational structure is a set up that are established by the

managements to flow work smoothly within the organization. This can be centralized or
decentralized whereas management need to ensure that the information is effectively conveyed to
the customers.

Infrastructure – When an organization is having well trained employees and operational

efficiencies, they also need adequate infrastructure to carry on all the functions in the form of
high-quality work and manufacturing facilities, stable power, strong internet connectivity.
Inclusion of these in the organization will incorporate higher performances.

3.2 How the change transition is designed by strategic leaders and managers

Change Situation -

Leadership can be described as a process of persuading the organization in their attempt to reach
the established goals and mission (Johnson, 2004). Similarly, strategic leadership can be
identified as the influential process that that support the top management to achieve goals.
(Clegg, 2011). Strategic leadership involves abilities such as anticipation, envision, flexibility
and empowerment which facilitate the strategic change. Effective strategic leadership can know
to be the foundation for successful usage of strategic management process. It helps in prioritizing
the objectives to subordinates and provide guidance towards achieving corporate objectives.
(Boal, 2000)

13
As per the qualities and responsibilities of strategic leadership, the most suitable style of
leadership will be the transformational leadership. Transformational leadership can recognize the
success as the form of confidence within themselves and the fellow staff (Capon, 2008).
Transformational leadership is explained by the ways in which the responsibilities are held by
the leadership and how they recognize the need for change, creating vision as a manner of
inspiring change and execution of change within the organization.

Besides from the increasing demand for changing imperatives, organizations also grow to
achieve success in prevailing and future business environment and effecting change. Most of the
efforts put into the change do not necessarily meet the organizational expectations. One of the
biggest strategic challenge for leaders are to manage the people during process of change while
effectively dealing with the resistance. The resistance shown towards change and absence of the
efficient leadership are the major courses for the failures in change. Therefore, strategic leaders
should effectively communicate with the employees regarding their concerns and feedbacks
(Daly, 2003)

Recently, focus has been given to strategies that leaders can effectively utilized to cope with the
change than simply being reactive to it. Articulations of convincing reasons for change, creating
an open and standard communication, establishing a road map for implementation, initiating
training and development programs to enhance the competencies/skills, formation of coalition of
support systems with the expertise knowledge, not giving up the courses of actions despite the
hardships during the implementations, recognition and rewarding the main contributors, careful
management of resources, enhancing the reliability of the process by making it rather transparent
and creating a strong plan to deal with the resistance can be known as good strategic leadership
initiatives to deal with the change (Kotter, 1995).

3.3 Critically evaluate ways in which strategic management enabled the

conditions for organizational change in Heineken

(Allen, 1972) stated that, for implementing change management within an organization, there
should be a proper management team established in order to oversee the change process. This
team was led by the senior management Heineken who were required to be in charge in the
program by making sure that all the established goals of the strategy are effectively achieved.

14
The culture within the Heineken required the institution to commit necessary resources so as to
reach the suggested goals.

The following shows how Heineken incorporated conditions for strategic change within the
organization as per the Porter’s model for change management.

Increasing urgency – The first step was to create urgency towards the proposed change. In this
stage, Heineken performed the existing exclamation of their standing within the beer industry
with the aim of recognizing areas that needed the improvement. With the determination of the
market position, management came up with proposed changes.

Next the people who will be affected by the change was recognized whereas they took steps to
let them understand how the implications of change will affect them in a way to minimize the
employee resistance.

Establishment of a guiding team – Heineken developed a change implementation team based

in the Head office in Colombo 02 and other local support teams at the regional head offices. The
team was aware about the prevailing position of the bank forge ahead cooperating well with the
management and employees who are affected.

Clear statement of change vision – The head office team along with regional team had a
common understanding with each other as well as the change that is to be imposed. At this stage
the institutional objectives were clearly stated by the management along with the statements of
time frames. The change implementations were only arrived after the discussions and
consultations with relevant stakeholders.

Proper communication of suggested vision to the stakeholders – Heineken was tasked with
training the employees to be familiarized with the proposed system changes. This stage requires
an effective communication strategy that is rather proactive. It involved conducting seminars for
employees, holding meetings, rewarding, gathering social events and inclusion of major
stakeholders in decision making. This laid down a good foundation for imposing the change
more effectively by minimizing the resistance.

15
Action Empowerment – This stage was successful as the consumers, managements, employees
and stakeholders understood the change and appreciated the reasons for creating change. This
helped to receive a steadfast backing for change from their ends.

Creation of short-term success – The management established short term evaluation matrixed
whereas to ensure the efficiency in replacing the old system. They did not wait for the end of the
project to evaluate the success yet initiated short term time intervals to evaluate the success.

Anchoring changes – This was the final stage where changes that were adopted were anchored
in the organization to show their completion of success. The establishment of correct
measurement yardstick help to determine success by enabling the recognize the areas that needed
improvements.

3.4 Importance of employee engagement for organizational change

The employee engagement concept is a relatively recent. Most of the organizations believes that
the employees are working for the pay that is given to them. However, this is rather outdated and
false concept. There are several factors that are non-monetary affecting the employee
engagement such as recognitions, appraisals, advancements, autonomy, equal treatment, work
environment, support, access for management, reliability, and sense of importance for work and
respect (Woodruffe, 2006). Given that most of the organizations take liberty in assessing drivers
to uplift the employee engagement (Bakker, 2008)

Importance of employee engagement

Because distraction leads to an absence of enthusiasm to labor and drive, employee engagement
is critical. According to the Corporate Leadership Council (2004), actively involved employees
perform 20% better than averagely engaged employees. Furthermore, according to ISR (2003),
corporations with higher levels of engagement saw a 3.74 percent increase in production margin
and 2.06 percent upsurge in profits over a one-year period, while other corporations with poor
levels of engagement saw a 2 percent and 1.38 percent drop in the particular clusters.

Relationship with Employee engagement and change management

(Shaw, 2005) defined employee engagement as the ability to translate the employee potential into
employee performance and success of the business. It also means the changing the employee
16
performance by means of internal communication professionals. (Vance, 2006) also described
that higher the employee engagement, they will go an extra mile to complete their task. Thereby,
if the employee engagement is enhanced during the change management initiative, chances are
higher that their support is received for better performance.

In most of the research conducted related to change management, the employee engagement is
notably mentioned as one of the most important factors in implementing the change management
successfully. (Swarnalatha, 2013) claimed that fourth step in building a balanced culture is
evolved from employee engagement. (Goodman, 2004.) points out the reasons behind the
linkage analysis by drafting the pathway for change by recognizing the barriers as a mean of
contemplating a positive feedback mechanism as knowledge sharing is a way of improving the
employee engagement. This will further lead to more knowledge sharing accelerating the change
process.

Finally, (Makumbe, 2016) stressed that employee engagement as one of the main pillars for
successful change management. Employee engagement is a leading component that draws the
attention from prevailing issues creating a cross over between the engagement concepts and need
for change management.

17
18