Organizational Change: Murphy’s Dilemma in Biscuit & Co.

1 Organizational Change: A Case Study of Biscuit & Co Murphy’s Dilemma in Biscuit & Co. Murphy’s predicament is a paradox: Managing great expectations of change from antichange agents. From the management to the workers at the mill at Biscuit & Co, the culture of loyalty to the proprietor family is in-grown and is the sole motivation to work. Resistance to change is the biggest challenge Murphy has to face in Biscuit & Co. For management, financial management is the only way out to the business success as is evidenced by the statement “financial management is the heart of our success”. For over 80 years, the corporate mindset is production focused and barely sees the need for marketing. The company relies on its history for a good name while in the retail section; things start to turn around with lots of dissatisfaction from retailers.

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2 The entry of Murphy into Biscuit & Co is necessitated by need but in the top management, not all can see it. Andrew Eastern, the company managing director has an overall role of overseeing success of the company but is not a marketer. His search for a marketer is influenced by the CEO but he is himself an anti-change agent. Murphy’s entry into management as a marketing manager is viewed by loyal employees as a threat to their job security and is thus not welcome. Murphy comes in with a vision to increase resources to sales and marketing and implement strategic marketing analysis and customer feedback. The company has been underinvesting in its launches. One of the major hindrances Murphy encounters is the “this is how we do things” attitude. The operations manager and the managing director have dug their heels deep against change and this pauses a threat to Murphy’s effort for change. In spite of all this resistance, there is great expectation for change as is evidenced by the words of the financial controller regarding Murphy as “the guy who is coming to turn the company around”.

Making strategy everyone’s job Today, work is knowledge based and employees contribute to organisational goals with full knowledge of their contribution. Employees must therefore be made aware of any strategy to be implemented before they can implement it. After developing an understanding about the strategy within the employees, develop buy-in so that the strategy can gain support. Also ensure compensation is linked to the strategy.

Burnes and Jackson (2011) argue that the success of change implementation depends on the extent to which value systems are aligned to the organisational change. They indicate that effective organisations are that goals and values are congruent and so shared by management and other staff of the firm. This however is not sufficient until the approach to the change is also

3 congruent. It means that management must identify the values that underpin various approaches to change.

In a case study of XYZ Company, Burnes suggests an approach that worked for this company. The activities in that implementation included: 1. an audit of change readiness 2. assessment and planning workshops 3. communication of the change strategy 4. implementation of the change accompanied by team building 5. evaluation of the success of the implementation (Burnes 2004) The change framework Various steps are involved in implementation of change. 

The idea of change and its context – at this point what needs to be changed is highlighted or what new thing needs to be introduced (Schuler 2003).

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Defining the initiative for change – this is an important step as it defines the role of strategic players in the effort for change. A vision of the desired results is created, what change is workable and who will defend that change (Smith et al 1993).

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Evaluation of the climate for change – at this point, the change implementers seek to understand the strengths and weaknesses of the organisation and how it functions in its environment. This enables drafting alternative scenarios which proposed changes could bring and designing an effective plan for implementation.

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Development of a change plan- one that balances between flexibility and specificity

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Finding and cultivating a sponsor – it involves trying to influence powerful executives to help create a massive support for change. This sponsor should be informed frequently on the progress so that they can keep pushing.

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Preparing the recipients of change – change is not possible unless there is acceptance from the recipients. This is to overcome resistance to change (Burnes 2004).

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Creating a cultural fit – a strategic change initiative should be congruent with the organisational culture. Communication and rewards can help reinforce this.

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Development and choosing of a change leader team – change is better implemented by a team rather than an individual.

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Establish small wins for the sake of motivation – short term wins are created and employees who perform well in this implementation are recognised.

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Communicate change constantly and strategically – this is to enhance organisation’s understanding and commitment to change.

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Measuring the progress of the change – change implementation ought to be measured continuously and not merely at the end.

Change agents In any transformational change, all people affected by this change are change agents in that their contribution in reframing leads to the successful outcome (Burnes 2004). At all levels of change, an external agent of change is regarded as a helper who intervenes as a facilitator.

These external change agents need skills to handle anxiety, shock and resistance, ambiguity and hopelessness due to the contradicting information that comes along (Buchanan & Dawson 2007).

They also need to resolve conflicts that push them to different directions.

Organisational change

5 Organisational change is the alteration of activities in the organisation in order to achieve set objectives. It involves change of several aspects of doing things including attitude change. A substantive change in the job individuals do that might affect job security, psychological threats or even social disruption could result to resistance to change (Schuler 2003). Individuals may differ in how they perceive change. Dunham (1989) proposed that attitudes towards change could be classified into three categories: the affective, cognitive and behavioural. He explains that the affective relates to the feelings of an individual towards an object. It is linked to emotion and outwardly expressed as like or dislike of the object. Cognitive attitudes is based on knowledge of a person and what is believed to be true while behavioural relates to the way the individual will behave as a result. How the supervisor relates with employees is important as it affects their perception of change climate. Employees are likely to perceive change in the same way as their supervisors (Chapman 2002). No matter whether the change is perceived as positive or negative there will be resistance simply because it will affect the status quo. However, some scholars argue that real change may not occur if there is no resistance.

Organisational culture This comprises of a system of artefacts, beliefs and values that underlay the common perception about appropriate behaviour by members of an organisation. It comprises of beliefs and behaviour. Small and fast growing companies are characterised by sociable and solid cultures. Larger organisations have fragmented low solidarity cultures (Thomas 2004).

Organisational culture affects its performance and subsequently affects changes in the organisation too (Schuler 2003). Organisational culture incorporates the internal politics and these are crucial to success or failure of the changes introduced. Values often show a tendency to change resistance due to their shared nature (Scott 2002). Some norms promote change, for

6 instance risk taking, respect and trust, focus on quality and shared vision (Chapman 2002).

Others discourage change like risk avoidance, excessive competition and group think. Change agents can encourage cultural readiness which comes through open communication.

Challenges to organisational identity There is a transition stage through which organisations go through in their evolution from current state to the desired state. The organisational members need to first realize their dissatisfaction with that status quo so that they can identify a desired state they would want to be in future (Baulcomb 2003). It is recommended to have a team of wise or visionary leaders who are also donned with effective interpersonal skills to effect this change. There must also be resources to support the change (Mento, Jones & Walter 2002). Under-allocation of resources to a total failure of the change implementation and any efforts to repeat the process in future may get a cold reception (Cummings & Worley 2008). There should be activity planning as a way of creating an elaborate road map of everything that must be accomplished in the course of the transition. The team that manages the change should be reporting to the CEO directly and their primary role should be towards managing the process of change. Throughout the process, it should be noted that the cornerstone is effective communication to the entire organisation all details of progress and new tasks that will lead to the change being successfully implemented.

Why the transformation process may fail Some errors made right from the beginning of the change process can be costly to the process of change. Some of these are: Failure to establish a great sense of urgency: The rate of urgency is high enough when approximately 75 percent of the company’s management is completely convinced of the need for change and that the status quo is no longer

7 acceptable. A less proportion can create problems later in the process. The market and the competitive realities should be carefully examined and the crises, potential crises or the opportunities should be identified (Mento, Jones & Walter 2002).

Failure to form a strong guiding coalition: If the change initiative does not have a group strong enough to lead the effort, the efforts may die away. The team should be motivated enough and should work together with a common vision.

Failure to create a vision: A sound vision is important in that it sticks in the minds of all change agents. It is said that if you cannot communicate the vision to another party in five minutes or less, then your vision is lacking and may not be ready for transformation (Thomas 2004).

Failure to communicate the vision: Employees will not help in transformation even if they are not satisfied with the status quo until they are utterly convinced that there is a plan for useful change. Communication must come in both words and deed (Garvin 1993). Behaviour by stewards of change that is inconsistent with their words will undermine their efforts.

Declaring wins too soon: Unless the desire and drive to change is deep into the systems of the change agents, reporting a win too early may be counterproductive (Chapman 2002). Short term wins can however be reported as soon as they are realised.

Evaluating Murphy’s efforts Murphy admits that his hiring into Biscuit & Co. could not have come at a better time.

The company’s competitive position was at a point that necessitated change. Hiring Murphy was

8 not also a wrong decision. He was an old hand in marketing and commanded respect in his field.

As would be expected in ordinary circumstances, the culture was not the proper match for change and needed change first before it could support the oncoming corporate changes.

On entry into the company, Murphy hired staff that he strategically placed within the organisation to implement the change. This was a mistake because he established an old versus new mentality within the company. Murphy should have tried to influence the old mentality first in order to change the culture. Trying to influence the culture first could have helped to increase readiness to change and admission that change was necessary. This in turn required proper communication of the mission that Murphy had. When communication and change of culture were implemented it would be a right time to implement changes.

Murphy did not use the human resource department The HR department is a strategic one in change implementation. It should be given priority when change is being introduced. Change is implemented by employees and the organisation section that is most directly related to employees is the HR department (Thornbury 1999). In effect HR officers should be made to understand the change before it diffuses into the staff. The role of motivating staff to implement change, compensating change agents and especially rewarding small wins should be linked to the HR department (Kamoche 1994).

Performance based compensation Since the organisation is taking a new direction it is important to tag compensation to efforts and contribution to change. Strategic HRM acknowledges that it is common for firms to fear for the financial implications if it promises a set benefits package as a reward to contribution. It therefore creates other reward schemes like bonuses, annuities, and other awards.

They must be linked to the performance rating tagged to the contribution and based on an

9 objective appraisal. Rewards may be granted at the end of it all after achieving set and agreed goals or randomly after small wins. Since they are designed to reinforce or encourage good goal focused behaviour, rewards ought to be given in a way that other employees get motivated to achieve same or even higher attributes (Kamoche 1994).

Murphy did not fully commit the CEO When the CEO is fully committed to change, he becomes a source of authority to influence other managers to follow suit. Even though the initiative to establish a marketing department came from the CEO he did not fully get involved in a follow through activity. The CEO is the symbol of unity and his course of action commands a following (Thomas 2004).

Right from the beginning, Murphy had experienced resistance from managers who maintained that financial controls were the way out to success. These included the managing director and the operations manager. If these two were to be converted to supportive change agents the process would have been a little easier. This especially relates to the managing director in that he was above Murphy hierarchically. His influence too, especially being part of the proprietorship would have contributed greatly.

Communication and ICT In the case of Biscuit & Co, there was not enough communication and that is why Murphy’s presence was still considered a threat to job security. The fact that things were still done manually in the company may have been a hindrance to communication. According to Abraham Maslow, security needs are part of the most basic needs of an individual (Boree 2006).

Murphy’s presence and initiative were considered to be a big threat to such a need and received a cold reception to an extent that some individuals did things the exact opposite just to ensure the change was not successful.

10 Characteristics of a good change agent Change agents should be competent in all areas that change affects except the technical skills. Some of the competencies are highlighted below. 

They should be changes in key personnel and keen on the perceptions of top management and the prevailing conditions in the market (Mento, Jones & Walter 2002).

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They should be able to set realistic and clearly defined goals.

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They should be flexible with respect to responding to changes without deviating from the vision.

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They should have excellent team building abilities so as to influence various stakeholders in order to establish working groups that can work.

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They should be able to tolerate ambiguity and be patient in circumstances of uncertainty.

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Their communication skills need to be excellent so as to transmit information effectively to colleagues and all other change stakeholders (Chapman 2002).

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They should be in a position to sell plans and ideas to others and have good negotiation skills for the sake of soliciting for resources and resolving conflict.

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Political skills and awareness are vital since they help identify good coalitions, influence and get commitment from change implementers.

Summary In the case of Biscuit & Co, the effort by Murphy to implement change was hastened and not inclusive. That is why even though success was realised in giving marketing a key role in the company a competitive edge, the effort still ended in bad blood between him and the managing director. Murphy, despite being a great marketer, was not the best change agent. This could be proved by his lack of involvement of the HR department and his failure to communicate his

11 vision effectively. He lacked political skills that he could use to influence the key change stakeholders.

When a firm is to be taken through a major transformation, it is important to study indepth its culture before trying to induce change. If the culture is not friendly to the change or change supportive, there is need to influence it. Kurt Lewins calls it to “unfreeze the culture, change and then refreeze” (Lewin 1951). The change process involves several steps from identification of need to evaluation of its implementation success. In any organisation that effects change, it is common to encounter resistance from some management staff and other employees.

It is therefore important to evaluate and prepare a favourable environment for change. This helps reduce the resistance encountered (Schuler 2003).

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