Reorganization (Investopedia, 2003) means a change in the structure or ownership of the company through a merger or consolidation, acquisition, transfer, recapitalization or change of identity. This study focuses on departmental reorganization with an analysis of the change process using John Kotter's 8-step Change Model and William Brides' Management Transitions. Using this case study, it will bring a deep underestimation of the implementation of the change process, which increased the quality of work and performance within the procurement group.
Data collection will take place through personal interviews with positions that affect the change. More importantly, it prepares organizations to be aware of the effects of change and reduce the chance of failed change. This study will focus on one of the largest oil and gas companies in Thailand.
The role of the supply chain department is to contribute to organizational efficiency and effectiveness. The goal of the management team is to restructure the roles and responsibilities of the procurement professional and create a new position to create and delegate a new scope of work. This study focuses on departmental reorganization by analyzing the change process using John Kotter and William Brides' 8-stage change model.
The timing of the change occurs as the organizational change takes place as the company makes the transition from its current state to a desired future state (US Legal, 2010).
Organization using Kotter’s 8-Step of Change Process
Review, 2000) notes in his article “Wake up IBM” that IBM ranked first on Fortune's list of most admired companies in the mid-1980s. By the end of 1994, the company had incurred $15 billion in cumulative losses in three years. This was the wake-up call for IBM to look at the global market and the company itself.
After the change that took place in late 1998, IBM had $82 billion in revenue with the new business scope. Transforming an organization is not only helping the company compete, but also helping the organization survive in the rapidly changing world. Kotter (Harvard Business School Press, 1996) began by listing the common mistakes managers make when trying to initiate change.
He points out that "the biggest mistake people make when trying to change the organization is to dive in without creating a high enough sense of urgency among fellow managers and employees." The eight-step change model used to transform organizations is as follows: (Kotter, 1996; Smith, 2005).
Establish a sense of urgency about the need to achieve change. People will not change if they do not see the need to do so
Create a vision of what the change is about and tell people why the change is needed and how it will be achieved.
Develop a vision and strategy. Create a vision of what the change is about and tell people why the change is needed as well as how it will be achieved
Generate short term wins. Seeing the changes happening and working while recognizing the work being done by people towards achieving the change is critical to
Consolidate gains and produce more change. Create momentum for change by building on successes and invigorate people through the changes by developing them
Organization using William Bridges’ Managing Transition Concept
He states that "it's not the changes that make you, it's the transitions". He distinguishes Change and Transition, as change is situational: the move to a new site, the retirement of the founder, the reorganization of the new team, the revision of the pension scheme, while Transition, on the other hand, is psychological. It is a three-phase process that people go through as they internalize and come to terms with the details of the new situation that the change brings.
The final stage: saying goodbye to things as they were, a certain job, co-workers, location, even the manager or supervisor can change when there is a redeployment in the organization. Neutral Zone: New environment, new responsibilities, rules have changed, there are different people working on the report, all of this can be worked out as you explore and experiment in this new environment. New Beginning: This period requires a definitive adjustment to new ways of doing many different tasks, or even similar tasks, but in a new way.
Cameron and Green (Cameron & Green, 2004) say that the management transition model is useful when faced with inevitable changes. The model encourages all involved to gain insight into where they are in the transition process.
RESEARCH METHODOGY
- Sample Selection
- Interview Questions
- Operational Procurement Manager: This person takes care of procurement and material management within the supply chain department. She is a
- Purchasing Manager and Procurement Team Leads: Purchasing Manager is a manager in the procurement function who ensures the effectiveness of
- Procurement Specialist: Procurement Specialist is a person involved in daily operations including sourcing, negotiations, contract preparation, supplier
The list of questions is divided into different groups based on the roles and responsibilities of the interviewees, as well as on the different levels of the organization. Purchasing Manager and Procurement Team Leaders: The Purchasing Manager is a manager in the procurement function who ensures the effectiveness of the Manager is a manager in the procurement function who ensures the effectiveness of the purchasing process. Was the change plan effective in properly aligning the project's time, cost and objective.
Purchasing Specialist: Purchasing specialist is a person who is involved in the daily activities including sourcing, negotiations, contract preparation, daily activities of suppliers including sourcing, negotiations, contract preparation, supplier management, and involves all users.
RESEARCH FINDINGS
- Kotter’s 8-Step Change Model
- Establishing a sense of urgency
- Build a guiding coalition
- Forming a strategic vision
- Communicate the vision
- Empower others to act on the vision
- Generate short-term wins
- Make more change
- Make change stick
- Bridges’ Managing Transitions Concept
- The Ending phase
- The Neutral Zone
- The New beginning
The first direction that the Supply Chain Manager gave to the new Operational Purchasing Manager was to improve the purchasing function in both efficiency and effectiveness. The Operational Purchasing Manager discussed with the Purchasing Manager the points for improvement and problems within the Purchasing function that have led to a restructuring. The Purchasing Manager called the team leaders together for a meeting and informed the members about the change.
When the new organizational structure and implementation plan were approved by the change team, they communicated the plan to individual employees. It could have been a different situation if the change team communicated why the reorganization was needed and the value of the changes. The change team must inform all stakeholders of upcoming issues and changes that affect their position.
The Purchasing Manager held one-on-one meetings with the Procurement Specialist - Special Projects. After one-on-one meetings with employees affected by the change, the Operational Procurement Manager and the change team held kick-off meetings to communicate the change to everyone within the procurement function. The team leader asked all team members to list the contracts and sourcing events that needed to be submitted to the Procurement Specialist - Special Projects.
One thing the change team had to keep in mind was the limitations of the Procurement Assistance scope of work. The change began in February 2015 when the supply chain manager raised his concern with the Operational Procurement Manager. After discussing with the team, they decided to add more scope to the Procurement Assistant position.
Three months after implementation, the Procurement Specialist - Special Projects consulted with the Procurement Manager to gain a better understanding of their role and responsibilities compared to the Procurement Specialist. The change team did not prepare time for employees to let go of the old path and transition to the new roles and responsibilities. One of the purchasing specialists mentions, “I didn't have any details about the change, so I continued to do what I usually do.
In the implementation plan, the change team was not aware of the timing that it will affect the performance of the team. This helped reduce conflict between the team due to unclear roles and responsibilities after the change was implemented.
CONCLUSION AND RECOMMENDATIONS
- Lack of a clear objective and why the change was necessary
- Unclear scope of work
- Human resource
- No post-mortem session after implementation
- The management team did not manage the transition of organizational change
To get that assertive state of mind, the change team must deliver clear communication about why and how important the change is to all impact users and make them understand the change from all perspectives. However, a contract cannot be created without information from one-off and catalog purchases, which came from the Procurement Specialist's day-to-day operations. Clear roles and responsibilities should be provided by the change team and should be ready before the change implementation.
If the change team provides this information early in the implementation, it will make for a smoother process with less conflict between teams. Prior to implementing the change, management and the change team were aware of insufficient human resources in the Procurement Specialist – Special Projects position. Although there were only two employees in this position, the change team moved forward with the change.
In addition, the change team must provide information about a career path and growth after the change is implemented, because on the new positions and scope of work. After implementation, the change team did not hold a post-mortem review session to review the progress. However, good performance by certain metrics does not mean that there are no problems behind the change.
Management and the project team should evaluate the change by asking for employee input or creating a survey to gain input from all members of the procurement function. In implementing this change, the change team communicated to all members on the same day. From this action, it shows that the change team has not applied any theory or framework to manage the change transition or adapt their messages to the way employees are affected.
The timeline for the change was too fast and the team members did not understand the final stage of their roles and responsibilities and had to start a new process immediately. By applying Bridges' Transition Management concept, this will reduce potential conflicts and issues as people have time to prepare for the change.
Organizational change and employee empowerment, a grounded theory investigation into the integration of lean manufacturing in a traditional factory environment, PhD thesis, Capella University, Minneapolis, MN.
