Change Management Report
Change Management Report
Change Management
Report
June 23rd, 2023
Presented to Prepared by
Dr. Tamer Salem Moataz Radwan
Kholoud Mustafa
Sherine Sabra
Table of Content
1 Executive Summary
2 Introduction
8 Report Conclusion
Change management is the process of preparing, assisting, and supporting individuals, teams,
and organizations in making a transition from the current state to a desired future state. Effective
change management is crucial for organizations to successfully navigate through periods of change,
whether it be technological advancements, restructurings, or other organizational initiatives. It is
an essential component for any organization seeking to adapt to changing circumstances and
remain competitive in today's rapidly evolving marketplace.
This report tackles different aspects of change management: the need for change
management and its importance, change management processes, types and models, and a case study
on Change Management Readiness for an Oil & Gas SME Company in Malaysia.
1| Change Management
2. Introduction
Organizations are constantly changing. They are introducing new products and services,
expanding into new markets, and adopting new technologies. These changes can be disruptive
and stressful for employees, who may be resistant to change. Change management helps to
mitigate the negative effects of change and to ensure that the change is successful. It does this
by helping employees to understand the need for change, to develop the skills they need to
adapt to change, and to support them through the change process.
Second, change management can help to minimize the negative effects of change. When
employees are resistant to change, they may be less productive, they may make more mistakes,
and they may even leave the organization. Change management can help to mitigate these
negative effects and to ensure that the change is as smooth as possible.
Third, change management can help to improve employee morale. When employees feel
like they are being supported through the change process, they are more likely to be positive
about the change and to be committed to making it a success.
1. Initiating the change: This step involves identifying the need for change, developing a
plan for change, and communicating the change to employees.
2. Planning the change: This step involves developing a detailed plan for how the change
will be implemented. The plan should include a timeline, a budget, and a list of resources
that will be needed.
3. Communicating the change: This step involves communicating the change to employees in a
clear and concise way. Employees should be kept informed about the progress of the
change and about any potential challenges.
4. Supporting employees through the change: This step involves providing support to
employees who are struggling with the change. This support can take many forms, such as
training, coaching, and mentoring.
5. Managing the change: This step involves monitoring the change process and making
adjustments as needed. The change manager should be prepared to address any challenges
that arise during the change process.
Change management can be used to manage many types of organizational change. The three
most common types are the following:
Best practice models can provide guiding principles and help managers align the scope of
proposed changes with available digital and nondigital tools. Popular models include the
following:
ADKAR.
The ADKAR Model was created by Prosci founder Jeff Hiatt, consists of five sequential
steps:
1. Awareness of the need for change;
2. Desire to participate and support the change;
3. Knowledge on how to change;
4. Ability to implement desired skills and behaviors; and
5. Reinforcement to sustain the change.
RESISTANCE.
The executives and employees who are most affected by a change may resist it. Since change
may result in unwanted extra work, ongoing resistance is common. Transparency, training,
planning and patience can help quell resistance and improve overall morale.
COMMUNICATION.
Companies often fail to consistently communicate change initiatives or include employees in
the process. Change-related communication requires an adequate number of messages, the
involvement of enough stakeholders to get the message out and multiple communication
channels.
NEW TECHNOLOGY.
The application of new technologies can disrupt an employee's entire workflow. Companies
can improve adoption of new technology by creating a network of early learners who
champion the new technology to colleagues.
SCHEDULING ISSUES.
Deciding whether a change program will be long or short term and clearly defining milestone
deadlines are complicated. Some organizations believe that shorter change programs are most
effective. Others believe a more gradual approach to change reduces resistance and errors.
ABSTRACT
Change management is vital process in any organisation in sustaining and remaining
competitive in a volatile environment. A well-planned change management effort has been
craved by organizations in need to be more profitable, reputable, and sustainable. These
changes to the pillars of the organization are normally more transformative than
incremental in nature. All arrows pointing to the single biggest step an organization is to
embark if they choose to ride the path of a successful change management execution – the
change management readiness.
This paper discusses the aspects of change management readiness which entails the
need for readiness, the activities within readiness, the factors of leadership, communication
and awareness that embodies the readiness as a whole. A case study of an actual organization
participated in the study using leadership profiling assessment, organizational communication
survey, change management awareness survey and maturity assessment. The results from this
study is realistic and impactful to its readers. This paper validates the underlying theory of the
three factors in a real industry environment and how successful change management readiness
can be obtained with diligent planning and execution
The sixth Prime Minister of Malaysia initiated the Economic Transformation Plan, which
place high priority to the Oil and Gas industry, as it has been the most potential and lucrative
industry at the moment. The concentration encourages new companies to join the industry,
while the current businesses grow within rapidly. Many incentives are being given to support
this effort but the biggest question remains whether these “Small Medium Enterprises” (SME)
companies are ready for expansion, globalization or survival. Are they ready to compete on
the international playing field in terms of deliverability, quality and price competitiveness?
These are the biggest questions asked of a company in these situations. While they try to
pursue change through generative learning, they see things and begin transforming its
structures when waves of alarming needs corner them for change in process, people, structure
and strategy [1] in order to survive.
This is the current problem and scenario that most companies in Malaysia are facing, as
majority are still operating on local standards and deliverables. When Malaysia eventually
opens up its market in complying to the Asian Free Trade Agreement (AFTA), many will feel
the pinch and loss of business opportunity. Only sustainable model implementation and
adaptation to the current market demand will enable them to survive this phenomenon.
Since companies need to change in meeting the demands of the market, this study explores an
element in change management for this concentrated industry in Malaysia – the readiness for
change management in an organization. For the SME Construction companies within the Oil
and Gas industry, they must be able to act fast and prevent the collapse of market
competitiveness. Globalization will take its toll whether we like it or not, it's how these
companies adapt and transform towards the external imposition that makes survival and
growth possible.
This study has an objective of evaluating a company's readiness in executing change
management through the factors of leadership, communication, and awareness. These three
factors are essential in the completeness of change management readiness and have been
proposed by previous research within the same field to study on the role of organizational
communication processes, as well as the importance of information on levels of change
readiness [2]. The discussion will be led on what change management is all about, its
implementation, preparation for change management, leadership, communication, awareness,
assessments, surveys and recommendation for the further impact the knowledge and industry
stakeholders in the future.
Change Management was defined by Prosci as a process and set of tools to assist
people/organization in achieving its desired outcome [3]. Change management in an
organization relies heavily on human factor with leadership and communication prowess
underlining its helm. Change Management is to be considered successful when the objective of
the company is being met through people collaboration and successful execution of the
program itself. It is glaring that change management is inevitable for companies in Malaysia as
they need to respond to the volatile market. Many claim Malaysia [4] as one of the most open
economies in the world [5], which makes change management and its readiness vital in any
organization.
Implementing change management is an easy feat with the right managerial leadership
within the organization. Being exemplary and communicating strategies, information, updates,
and instruction constantly towards people around you are the leaders of change management
that have helped companies transformed successfully [7]. In a modern organization, the top-
down approach is no longer valid as 360 relations, communications, interaction, evaluations
come into the fray. This factor demands more from the manager to be more sociable, open and
transparent with his/her subordinates. Studies have shown that two out of three
transformation initiatives fail due to incompetent managers. We have seen many of these
instances in companies struggling to compete and maintaining the high quality of services
where lack of "movement" towards organizational needs.
This research emphasizes leadership role before, during and after the change
management process. It is imperative to have the support, concern and committed managers to
employee’s welfare during the times of change [8]. Managers become leaders, acting as change
drivers and change agents during these processes. They need to drive and gain the trust of their
subordinates on why change is needed in the organization. Poor managers cum leaders will
lead to a disastrous change climate within the organization and make it difficult to cope with
the ever-increasing frequency of organizational change with it is already set in motion [9].
Developing managers with analytical, influential, emotional, political, interpersonal and
technical attributes is essential, especially in contributing to the probability of change readiness
success [10].
The first building block of one of the most popular change management model, Prosci’s
ADKAR, is awareness. [13]. An employee needs to know why change is needed, how it is
affecting them and what are their roles in participating in this change. This is where awareness
is crucial in getting their willingness and buy-in towards implementing change. Another factor
of awareness is the believability of the information they receive. This relates much to the
manager's role in relaying accurate information to build trust and enable the communicated
messages being interpreted in the right manner. It is advisable to have constant top
management engagement with employees, regular communication between managers and
subordinates and continuous monitor of awareness level about the change management
situation within the organization.
Through the economic transformation plan launched by the government, oil and gas
and renewable energy contribute a major portion of Malaysian economy with the increasing
growth of 5% per year up to the year 2020 [14]. The concentration on oil and gas industry has
grown over the years and more opportunities and potential are available in the market. This
makes the growth of companies inevitable as when there's a pull factor strong enough to
attract local SME companies, the same pull factor influences international companies in
protruding the local construction scene. With the development and launching of Rapid
Project, increasing construction and revamping works by big players like Petronas, Shell,
ExxonMobil, and Petron [15] for their current and upcoming facilities, increase in
competitiveness is the need for all companies battling to survive.
The largest contributor to our national income/business participation is through SME
companies. These companies are companies within the range of 75-200 people [16]. The
challenge of SME to react towards an open market and globalization is to meet the standards
expected by all the current big players and new players in the Malaysian market through the
influx of investment through the market. Companies like Tokuyama Corp., LION Group,
Assar are all newly invested companies in Malaysia which can be considered as Foreign Direct
Investment (FDI) [17]. The SMEs are facing an obstacle in the areas of manpower
competency, infrastructure, business competition, technological and innovation infrastructure
and government policies [18], [19]. It was identified that the key success factor for SMEs with
more than 10 years in the business are including but not limited to the items mentioned below,
which happens to be the biggest challenge for SME to compete and grow into an
internationally competitive company [20]. The items are:
Most of the local SME are struggling with these key success factors and in order to
overcome these challenges, especially in oil and gas, must undergo change management to be
competitive, maintain quality, meeting on-time delivery while gaining significant profit at the
same time. An SME company in Malaysia will need to transform by redirecting its strategies,
internal competencies, structure, process, culture, and people in order to succeed [21].
The case study for change management readiness is a medium sized oil & gas
engineering construction company based in Kuala Lumpur. The company has been operating
in Malaysia for more than 50 years with employee’s headcount of 100 people at the point of
the study (22 managerial level, 72 non-managerial level and 6 non-managerial/non-executive
directors). Steadily growing since its establishment, the company's revenue for 2013 was
RM153 million. Their previous clients are from international and local based company such as
Petron, Petronas, ExxonMobil, and Tokuyama. The company specializes in "Engineering,
Procurement, Construction and Commissioning” (EPCC) operations and provides its services
with exceptional quality and standards. Company objective is to satisfy client through quality,
safety and completion timeliness, maximizing profit for the shareholders as well as providing a
rewarding career to all its employees.
Change management was mooted by the managing director of the organization after a
decline in client satisfaction in the “Customer Satisfaction Feedback (CSF)” for 4 of the last 7
projects, where they achieved below 2.5 of 5, completed by the company. The main reason for
the decline in results was due to lack of manpower support, substandard engineering drawings
quality and technical ability of the employees executing the projects.
The first change management program is to be conducted within the first three months and the
next six programs to be completed within a year after the first program is completed. The
preparation forchange program was designed to minimize implementation risk and ensure
success for the whole change management masterplan. This preparation is also called change
readiness[23], where in order to overcome the barrier of change within the organization, the
company has focused on leadership, communication, and awareness as the key towards
achieving organizational change goals set by the management. Detail activities obtained from
the company's masterplan are as follows:
i. Managerial training
ii. Readiness of communication channels
iii. Improvisation of communication channels and distribution of knowledge
iv. Leadership program
v. Communicating organizational strategies
vi. Change awareness initiatives
There were 4 instruments/tools used to conduct the study by the researcher. These
instruments/tools were carefully adopted and created in order to reflect the true nature of the
organization through these assessments and surveys.
The first instrument is the leadership profiling assessment, which identifies the managers
in the organization on their sociability, dominance, and openness. This assessment was
adopted from a book titled "Managers As Mentors: Building Partnerships for Learning"
published in 2013 [24].
The second instrument is the organizational communication survey, which is a survey
emphasizing to the communication condition within the organization through channels
available internally. This survey was generated and distributed by Qualtrics, an online survey
tool [25].
The third instrument was is the change management awareness survey, intended to gauge
the awareness level of all employees on the objective, execution detail, roles and relationships
and timeline of the change management plan the company intends to implement. This
instrument was developed within the organization itself. The fourth instrument is the maturity
assessment (overall change readiness assessment) which highlights the readiness of the
organization and risk level in implementing change management as a whole. This instrument
was adapted from November ag, a renowned consultant based in Switzerland [26].
For the leadership factor, the assessment was done using the leadership profiling matrix as
explained in section 3. The assessment was done successfully with 100% participation within
the population of the managers in the organization. As explained in section 3 above, the 22
managers involved were subjected to 3 leadership factors of sociability, dominance, and
openness. The Table 1 show the manager profile matrix.
Outgoing 11 50.00%
Moderate 6 27.27%
Leader 8 36.36%
Moderate 10 45.45%
Expressive 12 54.55%
Moderate 2 9.09%
Question 1 1.66 1 3
Question 2 1.97 0 4
Question 3 1.31 0 3
Question 4 1.06 0 3
Question 5 1.68 0 4
Question 6 2.00 0 4
Question 7 1.83 0 3
From the data obtained from the seven (7) questions above, the general statistics
is being calculated and shown in Table 2 below. The questionnaire scoring is
based on 5 level of ratings, where rating 1 isthe best and 5 is the worst. The
statistic shows that all questions have mean rating of 2.00 and below. This
concludes that the level of communication for change management in this
organization is good and rated positively. The best response was answers to
question 4, where the majority of the employees know and well informed of the
organization. This means that the dissemination of information in a timely
manner has been done properly and in an orderly fashion. However, there are mix
responses for question 6 on the manager's communication skills. This is
consistent with the results of leadership profiling matrix in section 5.1 above,
concerning some managers not being sociable and lack of openness while
interacting with their subordinates.
Through all the activities done for the readiness of change management, employees
below “managerial level” of 72 personnel took the survey on the awareness of change
management activities to be done within the organization for the next year. Managerial level and
above personnel were excluded because they are the change drivers and change agents
respectively. Results are shown in Table 3 below:
From the awareness activities using promotion, presentations, forum, and other
communication methods for the 3 months of change readiness activities, employees within the
organization are rating high level of awareness and responding well to the change effort. Almost
99.99% commented average or better in all 5 questions combined and only three-person rates
below average on question number 5. It can be said that the employees are well informed,
satisfied and feel important being included in the change management effort from the early stage
of implementation.
Maturity assessment was conducted with the participation of 72% population of the
organization and the results are shown in Table 4. With all the measurement tools, methods,
activities, and surveys being done during the readiness towards change management in the
organization, the ultimate test which reflects the overall outcome comes with the 31 questions of
maturity assessment. It gives a clearer picture of change management implementation. Table 4
shows the results of the assessment based on the areas mentioned in the previous section. It can
be seen that the mean for all areas was scoring a minimum of 7 out of 10. This indicates that the
organization is ready for change and have a high success probability in ensuring change is being
done with minimal risk.
First of all, I would like to thank the management of the organization involved in this case
study for their willingness to disclose information and participate in this study. Next,
highest gratitude to University Teknologi MARA (UiTM) and my supervisor for providing
the platform for me to complete this study and contribute back to knowledge and society.
[1] G. Susman, K. Jansen, and J. Michael, “Innovation and Change Management in Small
and Medium-Sized Manufacturing Companies,” p. 55, 2006.
[2] T. Hallgrimsson, “Organizational change and change readiness: Employees’ attitudes
during times of proposed merger,” pp. 1–98, 2008.
[3] Prosci, “The ADKAR Model for Change Management,” Chang. Manag. Tutor. Ser., 2002.
[4] M. Hashim, “Change Management,” Int. J. Acad. Res. Bus. Soc. Sci., vol. 3, no. 7, pp. 685–
694, 2013.
[5] M. Zulkifli, A. K. Char, M. R. Yasoa’, and Z. Hassan, “Small and Medium Enterprises (
SMEs ) Competing in the Global Business Environment : A Case of Malaysia,” Challenges,
vol. 3, no.1, pp. 66–75, 2010.
[6] J. Gigante, “Breaking Down the Barriers to Feedback,” Pediatr. Ther., vol. 02, no. 03,
2012.
[7] H. L. Sirkin, P. Keenan, and A. Jackson, “The Hard Side of Change Management,”
Proj. Manag.J., vol. 45, no. 3, pp. 98–111, 2014.
[8] J. Kotter, “THE 8-STEP PROCESS FOR LEADING CHANGE Dr. Kotter’s
methodology of change leadership,” 2012.
[9] R. R. Rehman, A. Khalid, and M. Khan, “Impact of employee decision making styles on
organizational performance: In the moderating role of emotional intelligence,” World Appl.
Sci. J., vol. 17, no. 10, pp. 1308–1315, 2012.
[10] C. Bond and M. Seneque, “Conceptualizing coaching as an approach to management and
organizational development,” J. Manag. Dev., vol. 32, no. 1, pp. 57–72, 2013.
[11] A. Whittle, O. Suhomlinova, and F. Mueller, “Funnel of Interests: The Discursive
Translation of Organizational Change,” J. Appl. Behav. Sci., vol. 46, no. 1, pp. 16–37, Mar.
2010.
[12] R. S. Bisel and J. K. Barge, “Discursive positioning and planned change in organizations,”
Hum. Relations, vol. 64, no. 2, pp. 257–283, 2011.
[13] A. M. Calder, “Organizational Change: Models for Successfully Implementing Change,”
Undergrad. Honor. Thesis, pp. 1–20, 2013.
[14] P. Chin and F. Kui, “Oil , Gas and Energy,” 2011.
[15] P. Performance Management and Delivery Unit, “Oil , Gas and Energy NKEA Fact
Sheet,” 2011.
[16] S. C. Malaysia, “New Definition of SMEs - An additional 8,120 establishments set to be
classified
13
as SMEs, bringing the share of SMEs to total establishments from 97,” 2014. .
[17] M. B. I. Photovoltaic, “Tokuyama Corp to invest a further RM3 . 72bil in Sarawak,”
2008. .