The Change Implementation And Management

Published Date: 02 Nov 2017

Since its beginnings in 1998, One GmbH was a company that successfully entered the market of mobile telecommunication services occupying the third place in the market. Despite new entrants in the market, the company maintained its position during the years with a market share over 20% and more than 2 million customers in the country (Fiedler, 2010). PILAS OTRO!

However, E.ON, the main shareholder of One GmbH wanted to sell for several years looking forward to enter completely into the energy sector. In 2007, after seven years of negotiations, the deal was set and it was finally bought by France Telecom Orange and Mid Europa Partners for shares of 35% and 65% respectively (Derstandard, 2007).

This papers aims to make a critical analysis of the process of change after the acquisition of One GmbH by France Telecom Orange by explaining

2. Critical Analysis of the Change Implementation and Management in the Acquisition of One GmbH, a mobile operator company in Austria.

From the acquisition in July 2007, several changes were implemented within the company. Apart from having new shareholders, there were also changes in the management board which it was changed for an entirely new one. Changes in the second level management were introduced, changes in the strategy, a reorganization, new members of the staff, changes to processes, new positioning and new cultural elements were carried on (Fiedler, 2010) .

Furthermore, in November 2007 a rebranding plan was announced, to change the name One for Orange, an already international established brand (Fiedler, 2010).

The type of change is transformational and it happened due to the new acquisition. Transformational changes are characterized for being very complex and radical. It is going from one stage to another completely different (Ackerman, 1997), which it is the case of the restructuring process in One GmbH. The reason is that the new shareholders wanted to enter the market in Austria with their entire new and unique brand in the country that has already an internationally recognized reputation and it is an already established brand abroad. With new services introduced in the country such as TV on mobiles, mobile landline numbers for enterprises and fixed prices for mobile broadband (Derstandard, 2008), France Telecom Orange’s strategy was to develop a competitive advantage to gain a better and stronger position among its competitors.

According to Cummings and Worley (2009), changes introduced by organizations in order to get a better position in the market and establish a competitive advantage are activities related to transformational change.

Additionally by the time of the acquisition, One GmbH’s profits were declining since 2005 and it had cut approximately a fifth of its workforce in that year (Derstandard, 2008), so Orange needed to implement changes to contrarrest those figures.

Although the professionalism and established reputation of France Telecom Orange, the changes were implemented with any change management team, no change agents or any change management model. The problem was that those changes were implemented as a very quick manner and without any previous announcement and without any management of change (Fiedler, 2010).

Therefore it could be said that the new style of leadership implemented was an autocratic style. All the new changes and activities were dictated without giving any concern about the employees’ autonomy and feelings (Schoel et al, 2011) rather than implementing a consultative style, where the staff’s opinions and ideas are taken into account, although all the decisions are still made by the manager (Gill, 2011). According to Burnes (2004) in order to implement change successfully, it is essential to involve the employees on these activities, especially if it is a transformational change. In addition, Kotter ******** QUE NO SE TE OLVIDEEEEE!!!!

Furthermore, this is the reason why deviant behaviour and resistant started to be perceived in the organization, specially in the rebranding stage, when most of the people have had accumulated many negative feelings towards all the previous changes (Fiedler, 2010).

The resistance was observed in different types of behaviour. Many resignations, many rumours, and bad comments started to increase within the company. Old employees did not want to share any information or knowledge to new employees, there was an evident lack of motivation to work and separated groups were mainly perceived inside the company. Basically the behaviour within the groups was that old employees did not want to talk to new ones (Fiedler, 2010).

As the changes were just implemented but not announced or even managed, there was a noticeable lack of trust between old employees and the new management board. The employees did not feel secure on what it was going to happen to them and to the company afterwards. People also felt threatened with all the new strategies and restructuring going on, they did not know their role in all the processes and they did not know their future in the company as well. Besides, Orange recruited the new management from the former most rival competitor of One GmbH, that is one of the reasons why the bad feelings and bad rumours started to spread more. There was a significantly high dissatisfaction among the employees who were loyal to the values of One GmbH’s brand and also with the employees that were loyal to the old management board. The new changes with the new management brought changes of culture and values as well, the internal environment became too stressful for old employees and many times seeing the new brand as a risk for them (Fiedler, 2010).

In this case it is obvious that the main reason of resistance was the lack of management during a change implementation. Despite France Telecom Orange being an international company, with years of experience, they failed by not using any change theory or model to introduce new changes in the company HABLAR DE RESISTENCIA, EVIDENCIAR ESTO CON LO QUE HA DICHO ALGUN PUTO DE ESOS

However, after seeing the negative behaviour and resistance affecting the rebranding program (which was essential for the company), Orange implemented a model in order to manage and reduce the resistance among the employees. The model implemented was an adaptation of the project risk management field. Basically, the company saw the change process as a project, where resistance was seen as a risk. This implementation process was directed by the CEO of the company, where there were also a project team with several duties in terms of change management (Fiedler, 2010). The model developed by Fiedler (2010) has five phases (See Appendix 1):

1. Identification and evaluation of resistance potentials: Explicit observation of the queries of the staff, further identification, measurement and evaluation of factors of resistance.MAS BIEN AQUI EXPLICAR LO QUE LA COMPANIA HIZO Y NO EL MODELO COMO TAL

2. Planning of resistance management: Development of a project plan to conduct the management of resistance.

3. Preparation for resistance: Communication with staff, ensuring an understanding of the change among employees through workshops, meetings, events, presentations, etc.

4. Resolution of resistance: Adaptation of the process ***

5. Controlling of resistance measures and potentials: Further checking of possible resistance potentials.

The model at the end was implemented successfully MOSTRAR EVIDENCIA DE ESTO. However, this model has limitations since there are very little empirical evidence in the change management field, also it does not provide any details of the task involved in the process. REFERENCE

3. Change Model Recommendation

Although, they tried a new model for managing resistance. The company could have avoided/prevented the degree of resistance by managing the change since its beginnings. There are models that can help managers implement change successfully such as Kotter, Lewin, Prosci .... among others.

Kotter’s model is one of the models that the company could have used when introducing and implementing change in the company. It comprehends eight steps that should be implemented each one step by step without skipping in terms to execute the change successfully (Kotter, 1995). Basically Kotter (1995) says that if a company fails to follow the next steps, the change efforts will also fail. The steps are: INTRODUCIR ESTE PASO MEJOR

1. Create a sense of urgency: The need of change must be understood in order to make people follow the initiative of change. Kotter (1995) recommends that the CEO of the company, is the key for doing that. The CEO should have encouraged people to be ready for new changes. The new changes in One GmbH were implemented not only because it was acquired by Orange but also in order to cope with the external environment since the profits in the company were decreasing in the previous years and their new strategy was to gain a competitive advantage in the market. Kotter (1995) suggests that as many conversations regarding the change are done, the better the sense of urgency is created. Although the Orange’s CEO in Austria saw the need for changes, he failed in creating a sense of urgency among the employees in the company.

This step is also supported by several authors like Brower (2007 cited by Stragalas, 2010) who states that before implementing a change process, managers should make sure all employees understood the reason of the change. Also for Kanter et al’s ten step model (1992 cited by Todnem By 2005) it is highlighted the importance of creating a direction that will be shared with the others in terms to manage any change process.

2. Form a powerful guiding coalition: It is about making a change management team with trustable and credible people inside the company. The CEO of Orange Austria should make a team with powerful people within the company, it does not have to be all managers however it is important that these people have a strong expertise and leadership and they are already into going through the change (Kotter, 1995). In this step, the company failed again since there was not any change agent or any change management team. This step is also supported by Jick (1991 cited by Mento et al, 2002) who points out the urgency to create a team of leaders, not necessarily with high positions in the company, and this team should make a plan to manage the change.

3. Create a vision: In order to give a clear image of the expected future of the company, a vision should be generated by the change management. This vision should be easy to understand, it should be very defined and very clear (Kotter, 1995). The company did not create a clear vision for employees to understand, on the contrary the staff constantly felt threatened by the new brand and new changes. Brower gives importance to this step by saying change managers in order to inspire motivation, they should make emphasis on what is important and ratify the mission (2007 cited by Stragalas, 2010), however Cole et al. (2006 cited by Lewin Appelbaum et al., 2012) states that although the vision is important, the implementation of the vision is what really matters.

4. Communicate the vision: The change management team has to make sure to communicate the vision to the staff and that this vision is understood. The communication should be several times. Until employees understand the vision and the necessity for change, there will not be a successful implementation (Kotter, 1995). Orange Austria failed in this step as well since the changes happened without any previous communication. Kanter et al (1992 cited by Todnem By, 2005) emphasises on the importance of this step, on communicating and making people feel involved and on the honesty at all times.

5. Empower others to act on the vision: The change management team should give people power, making people feel involved in the process of change, let them participate. Any obstruction to the process of change should be removed in this step as well (Kotter, 1995). As Orange Austria failed in the previous steps, the company failed in this one and the rest ones as well.

6. Generate short-term wins: In order to keep people motivated towards the change, seeing small victories can help to make people recognize the importance of the change. It is important for managers to recognize that in this step it is not only about proposing short-term wins, it is more about achieving them so employees can see the benefits of the change (Kotter, 1995).

7. Consolidate gains and continue producing more change: Achieving short term is an essential step, however change managers have to prioritize the real vision that the change plan is going to achieve. The success in this step comes from using those short term victories in order to get credibility about the importance of the main change (Kotter, 1995).

8. Institutionalize the new approaches: Making sure that the new culture gained through the change process persists

Although this model has been seen very useful for many authors, it is also criticised for others.

Appelbaum et al (2012) find the model to be too strict

Although they could have also used Lewin’s three stages theory. It is not recommended in this paper because .... HABLAR Y SOPORTAR QUE EL MODELO ES MUY SIMPLE Y NO ADECUADO PARA ESTO, HOWEVER DECIR LAS VENTAJAS DEL MODELO