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Change management is the process of multiple activities executed in a sequence for the description and implementation of change within an organisation comprising its internal and external business processes (David, 2011). A merger is classified as a major change in the business as it requires the organisation to alter its internal and external processes due to the unification of two companies into one new enterprise.
The report is based on the case study of change management in Alpha Plastics as it underwent a merger with Colmar Chemical Company. Mergers take place between two or more companies to expand the companies as one single unit to enhance the competitive positioning in the market and acquire a higher share of the consumers along with expanding into other segments (Nguyen & Kleiner, 2003). Alpha Plastics was established in 1974 and has an employee strength of 6000.
The organisation is SME manufacturing laminates and plastics along with industrial additives. Colmar Chemical Company is larger compared to Alpha plastics with an employee strength of 8500. The organisation also produces industrial chemicals and plastics along with synthetic fibres. According to the case study, the merger had occurred between both companies after multiple rounds of discussions and site visits and resulted in the establishment of Colmar Alpha chemicals.
The case study also indicates the issue of serious discontent among the employees of Alpha Plastics due to their fear of redundancies and loss of position in the company. The major communication gap regarding the announcement of the major change had created a lack of confidence among the employees and influence them to resist the changes and look for other employment opportunities.
This report concerns the analysis of the present condition of the merged company called Colmar Alpha chemicals and presents the findings to the board of directors. The report also determines the likely outcomes of the organisational issues without intervention and analyses the contexts of multiple projects in the company. The projects include the relocation of the divisions in the company and establishing a standard and integrated system in the entire organisation. The final project also includes establishing a cultural change in the merged organisation to ensure the change’s success.
Analysis of the Present Situation of the Merger
The present situation of the merger among both the chemical companies has been done to identify the problems that surface in the organisation and the probable long-term outcomes that might occur in case there is no intervention.
Principles of Successful Change
Figure 1: PRINCIPLES OF SUCCESSFUL CHANGE, Source: (HORNSTEIN, 2015).
Change is introducing new methods and processes in an organisation to achieve better and more successful outcomes (Bakari, et al., 2017). The principles of successful organisational change are fulfilled by the drivers of change that comprise the key core factors. The advancements in information and telecommunication technology along with rapid digitalization of the business processes has resulted in the requirement to store and evaluate huge chunks of information for the businesses.
It is essential for businesses to conduct their research and development activities and keep track of the customer’s desires and needs. The processes of the businesses have also become digitalised and capable of being control through computer-based software (Burnes & Bargal, 2017). This has reduced the inventory cost of the businesses and streamlined the supply chain.
However, there is a lack of information regarding the choices and needs of the organisational staff at the merged organisation. This is mostly due to the lack of proper communication channels that there is no loss or misinterpretation in the process. The company’s business processes are hampered due to the lack of cooperation among the employees and their prejudice against the change of responsibilities and work.
The people and culture of an organisation along with its policies are also the drivers of successful change. The organisational culture in Colmar Alpha chemicals is very poor due to a lack of clarity regarding the position and job roles of the employees. The company’s four organisational cultures and the lack of representation of the employees in the decision making and feedback creates difficulties in the bottom line.
The organisational policies of formal and top-down communication also create changes and the communication gap is the bottom line. The personal interests and union among the workers are regarded highly without the due focus on the overall improvement of the business. The factor of technology is an external factor that influences the business processes of the company and its efficiency.
The UK government has been vocal about digitalisation in the country and encourages businesses to become paperless (Cummings & Bridgman, 2016). The chemicals company had decided to merge to benefit from the research and development expertise and improve the intellectual property. It is also important for the stakeholders to understand the need for change in the organisation for understanding how it can benefit themselves and ensure positive outcomes in the long term.
The stakeholders include the organisational employees, the board of directors, customers and regulatory authorities (Hornstein, 2015). The organisation’s employees consisting of the staff previously employed by Alpha Plastics have been vocal about their resistance to change and remain elusive about accepting the new job roles and responsibilities. The company managers had also been unable to accept the new rules and intended to keep their secretaries in the newly merged company for transcription.
SWOT analysis is done to evaluate an organisation’s internal environment and competencies. Colmar Alpha Plastics SWOT analysis is done for identifying its internal strengths and weaknesses along with its external opportunities and threats.
The organisation’s strengths include the increase in wages of the employees after the merger and the introduction of standardization for hikes. The company has the advantage of having its new facilities in geographical proximity to one another leading to the arrangement of transportation for the employees for the convenience of travel.
The company has a highly organised production department with individual departments for laminates, adhesives and industrial chemicals (Lasserre, 2012). There is also been a dedicated department for synthetic fibres manufacturing. The research and development facility of the company is well developed and remains a strength for the organisation.
Weaknesses of the company consist of discontent among the employees regarding the change and the lack of communication channels. The organisation does not provide any yearly bonus to the employees leading to dissatisfaction. The firm has been unable to manage the redundancy is in the organisation leading to the turnover of skilled and young employees.
The organisation also has the weakness of having a lack of collaboration among the employees as the previous staff of Alpha plastics have not joined the union membership (Ambrosini, et al., 2015). There is a deficiency of face-to-face and horizontal communication, leading to improved communication among the employees and the cross-departmental managers. The rights and interests of the employees are not looked after in the organisation as the union has not made much effort to integrate the workers of the Manchester facility. The company’s management has been unable to reassure the employees about their position and they have not been communicated, leading to uncertainties regarding redundancies and future scope.
The organisation’s opportunities include utilising skilled and young workers in the specialised production divisions. The company has the scope of establishing horizontal communication in the organisation to allow the departmental managers of the same ranks to communicate directly and resolve the organisational issues quickly.
Integrating a feedback system for the employees is also crucial for the company as it has the opportunity to learn about the staff’s grievances and their perspectives on the organisational decisions. The company can also utilise the department’s deputy managers in specialised positions according to their skill set (Pugh, 2016). The organisation has the opportunity to make the employees understand the importance of change and influence them to accept company transportation to the new facility from Manchester. This is due to the organisational intention to close the facility at Manchester and shift the synthetic fibres plant at Stockport.
The threats for the merged company include the redundancies of the skilled and young workers and the resistance to change. The company faces the threat of refusal of the employees working at the Manchester facility regarding the acceptance of free transport to the Stockport facility. There is a high turnover rate due to a lack of clarity about the job roles and future scope of the employees. Workers previously employed at Alpha plastics have refused to join the Union and remain unhappy about the removal of the annual bonus (Ambrosini, et al., 2015).
The morale of the staff is very low along with their job satisfaction leading to the performance below the expectations. The productivity and efficiency of the organisation have suffered due to the lack of employee engagement and motivation that causes hindrances in the business processes and information distortion at the bottom line.
Lewin’s Change Model
Lewin’s change management model has three stages to solidify a change in an organisation including unfreeze, move and refreeze. The unfreezing stage enables the organisational managers to increase the dissatisfaction of the employees by enabling them to identify the reason for the change with higher visibility and education (Cameron & Green, 2015).
This stage involves explaining the reason for introducing the change and the long-term benefits for the organisation and the personal career of the workers. The managers are also required to identify key people and leaders in this stage who can carry forward the organisational message and change directives for influencing and motivating the workers.
The second stage is the move during which organisational leaders with the help of the managers implement the change in the business processes and manages the internal business environment. This procedure involves the allocation of resources for the execution of the change and its monitoring (Swanson & Creed, 2014).
The model instructs the managers with the help of the leaders to educate the employees regarding adjusting to the new work practices and habits along with the potential use of new technologies. The third stage of the model is refreezing in which the organisational management and board of directors institutionalize the implemented changes based on the positive outcomes after monitoring and controlling.
This includes the implementation of the new business practices and segregation of the production departments across the merged facilities of both the companies along with the appointment of distinct facilities for manufacturing plastics laminates and synthetic fibres. This stage also consists of revising the HR policies and the overall organisational plan.
There are major issues in human resource management and leadership across the newly formed company due to the inability to understand the needs and requirements of the employees of Alpha Plastics. The company’s communication system is entirely formal with a lack of clarity and transparency of the organisational happenings among the employees. The lack of influence and inclusion of the employees reduces their motivation and engagement impacting their productivity and decision making abilities.
Present Issues and Likely Outcomes Without Intervention
The present issues in the organisation include redundancies in the management and operational positions. The employees were previously employed in Alpha Plastics and were accustomed to the different organisational culture compared to the present situation. There has been a major shift in the organisational and communication system from informal to highly formal.
The job satisfaction and morale of the employees are very low leading to poor performance and work efficiency. This has also affected organisational performance in terms of production and revenue generation. The lack of motivation and engagement has also resulted in high turnover and a loss of intellectual property for the company (Porter, et al., 2016).
The lack of intervention in the newly formed venture will result in a lack of motivation and discontent among the former employees of Alpha Plastics. There are gaps in communication and a lack of established communication channels that can result in information distortion and loss of productivity at the lower levels. The process of revenue generation for the overall organisation and its effectiveness of production can be hindered due to the dissatisfaction and limited productivity of the employees.
Without any intervention in the present situation, it is highly likely that most of the employees previously working for Alpha Plastics will leave the organisation gradually if they find better opportunities. This will result in the drainage of skills and intellectual property in the form of intangible assets that can hamper the research and development of the firm.
The advancements in information and communication technology will also impact the company’s technology acceptance and evolution rate due to the poor coordination among the top management and the bottom line. An organisation must change its culture and policies to better coordinate with the people and influence them to accept the change and work under the new circumstances for the overall benefit. The stakeholders of the company, like the investors and the customers, might have to suffer due to the prolonged discontent and mixed trust among the company employees without any intervention.
Organisations undertake mergers and acquisitions for increasing job security by protecting the management jobs in a diversify the company by maintaining a steady revenue flow resulting in an increase in the salaries and bonuses of the executive managers and the CEO in exchange for taking added responsibilities of the bigger company (Bakari, et al., 2017).
The managers also participate in mergers and acquisitions for job enrichment, extension of their influence, and improvement in their status and prestige. The programme strategy is to integrate the change management across the organisation through proper coordination across the departments and the employees of both the companies.
The program strategy also includes relocating the synthetic fibre production division to achieve better productivity and efficiency and reduce cost. This also includes the integration of standardization across the departments and working procedures for enabling the organisational activities and employees to remain on the same page. The programme strategy also incorporates the possible investment in new technology to achieve change and improve organisational productivity.
Prince2 Methodology for the Project of Merger
Some of the other factors for justification of the merger between Alpha Plastics and Colmar Chemical Company includes the operational synergy across both companies operating across a similar industry and financial synergy for using the fixed costs and reducing the average cost of capital. The opportunity of achieving product-market diversification was also a factor for the merger along with the strategic alignment of the organisational resources across the different facilities like the location of the Manchester facility at Stockport for the production of synthetic fibres.
However, the merger of both companies has not been able to fulfil the expectations as the case study indicates that the synergies have been overestimated along with the slow pace of integration and overpayment of the executives. The cultural clashes in the organisation among the former employees of Alpha plastics and Colmar Chemicals Company have also resulted in the inability of the change to fulfil expectations (David, 2011).
This is because the employees of Alpha were used to the informal communication channels and involvement in the organisational activities. However, the organisational structure of the merger company followed Colmar’s communication framework leading to confusion and loss of morale among the staff of Alpha due to no face-to-face communication and highly structures communication lines.
The PRINCE 2 methodology of the project and programme management states the reasons for mergers to be a reduction in risk, reduction of learning and focus on the project objectives (Hinde, 2018). The Prince2 methodology represents the projects undertaken in controlled environments and by undertaking a process-oriented approach with a detailed framework.
The principles of the methodology include business justification for the choice of the methodology and the project along with the integration of continuous learning and clearly defined roles and responsibilities of the project team members (Turner, 2016). The principles also include dividing projects into modulus and management in stages followed by the management by exception and focusing on the quality of the end product (Reiss, 2013). The methodology also follows the tailored approach for adjusting the project according to the needs of the stakeholders while maintaining the scope and operating across the complex environment to reduce risk.
Figure 2: Project management processes, process groups and knowledge areas. Source: (Jamali & Oveisi, 2016).
It is also important for the project managers and team members to analyse the market demands and understand the strategic opportunities and business needs before making new decisions. The technological advancements in the external environment are also required to be integrated as a part of following the PRINCE2 methodology for reducing cost and increasing production of synthetic fibres and chemicals (Jamali & Oveisi, 2016).
The legal requirements of the external environment of the UK including the health and safety at work initiatives are also required to be ensured for the welfare of the staff. Following the knowledge areas of the methodology will allow the project managers to achieve better efficiency in marketing and sales of the products along with the product conceptions with better ideas for research and development. This will also improve the manufacturing and packaging quality and strengthen the supply chain.
Overcoming Resistance to Change
According to the case study, it is analysed that the change management in the company is due to an increase in the size due to the merger of the two chemical companies. This also increases the complexity of the core functions and production process due to the increase in the specialisation for research and development (Nguyen & Kleiner, 2003).
The changes had taken place due to gaining access to better channels of marketing and expertise. The organisational employees of Alpha had registered the change due to their lack of involvement and knowledge about the long-term future and implications. The problems in the change management process and employees’ resistance are due to the lack of communication and clarity regarding their job roles (Cameron & Green, 2015).
Kotler and Schlesinger define the methods of overcoming change resistance in 1979. The methods for overcoming resistance to change include proper education and communication with the organisational employees to make them understand the importance of change and involvement in decision making.
The leaders of the company and the management need to educate about the long-term implications of the change and how it can be better for their future and the organisation itself. Negotiation and agreement are another method of overcoming resistance to change by ensuring that the employees are provided adequate benefits and their roles and responsibilities along with remuneration is negotiated.
The expansion of investment and contribution of the representatives like stakeholders in the general cycle of the progress of the change can be achieved by empowering them to include their perspectives for encouraging the change and including them in the dynamic additionally decreases the obstruction (Cameron & Green, 2015).
The extension in the contribution of the staff can likewise improve the staff’s willingness about the chances they can accomplish because of the change. The help and backing of the current representatives are fundamental for perceiving their commitment towards the organization and supporting their government assistance during the interpretation cycle. Control and co-optation may not be utilized as a methodology for conquering opposition as it can prompt long-haul complaints of the representatives. Clear and certain coercion can be embraced as a system by the association if different techniques bring attractive outcomes.
Dynamics of Change
Figure 3: DYNAMICS OF CHANGE. SOURCE: (BURNES & BARGAL, 2017).
The dynamics of change for the organisation include the resistance of the alteration in the business processes and integration of the system (Bakari, et al., 2017). This is due to the focus on individuals and tasks along with the improper culture and values in the organisation that is not inclusive to the employees of Alpha.
The orientation and efficiency of the employees are also very low, resulting in resistance among the employees. There is also a serious gap in empowerment and development of the employees in the company as training sessions are not arranged to enhance the workers’ confidence and will to participate in the change.
Force Field Analysis
Lewin’s force field investigation is an instrument that empowers hierarchical administration to plan for implementing change by deciding the driving forces and the opposing powers of progress. The force field examination takes thought of the objective circumstance for making the adjustment that can remember the increment for profitability alongside the decrease in hanging tight an ideal opportunity for associations (Ambrosini, et al., 2015).
The hierarchical change at Colmar Alpha is focused on eliminating difficulties including the absence of resolve among the previous representatives of Alpha alongside the absence of responsibility towards work. From the contextual investigation, it has been examined that the previous workers of Alpha do not recognize the new association and are on a way towards floating towards other business openings.
The main driving forces of change in the association incorporate the bringing down of proficiency and execution of the general association alongside the high paces of turnover. The other forces incorporate expanding operational expense and redundancies. The opposing forces of change for the association remember the redundancies for working situations for the representatives and the absence of spirit (Swanson & Creed, 2014). The main thrusts of progress at the association are more than the opposing powers of progress. It may prompt the choice to close the Manchester office to assemble engineered strands and move the exercises to the Stockport office.
Action Research Model
The action research model for change presents how a change specialist performs by working together with the change group and the authoritative staff of a firm to mutually analyse the issues identified with the progressions. This results in the formation of an activity plan for giving answers to the issues ejecting because of the change (Burnes & Bargal, 2017). The association is needed to recognize the issues with the advisor and hierarchical workers’ assistance by gathering information, framing the finding, and making moves for assortment.
Belbin’s Revised Team Roles
Belbin’s revised team roles present nine roles that are should have been satisfied by the individuals from a group. The amended group roles incorporate the plant, asset examiner and organizer as the first four roles. The last five roles are the shaper, screen evaluator, team worker, implementer, completer and specialist (Belbin, 2012).
The team members with the job of the plant are needed to convey local and irregular considerations and give answers for troublesome issues while the asset agents are needed to be eager and informative about the authoritative chances. The facilitators must be experienced and fit for appointing duties and advance the dynamic among others.
The shapers need to be tested and empower others to conquer the difficulties while the screen evaluators must attempt vital choices and assess the presence of the group. The team workers have the part of being helpful and conciliatory as well as tuning in to the issues of the colleagues and the implementers attempt functional activities dependent on the thoughts. The completers are the ones who will be liable for conveying the activities on schedule though the specialists are needed to give a consistent supply of abilities.
The action plan is formed for executing the program procedure and accomplishing the venture scope of the migration of hierarchical divisions, change in culture for effective change, joining of frameworks and normalization. The issue is to accomplish a fruitful merger of Alpha and Colmar by expanding the clearness of the workers about their position and importance to the organisation and boosting their spirit.
The goal is to accomplish unification and normalisation of the hierarchical storages and migration of certain divisions by setting up a culture of progress (Rosenbaum, et al., 2018). The ideal results of the merged venture incorporate the foundation of clear lines of authority and a progressive system in the authoritative design alongside removing redundancies as deputies to the managers.
The task additionally expects to accomplish the positive results competitive advantage among the workers and building up the degree for level coordination for facilitating the correspondence among departmental supervisors and representatives. A system for staff communication and feedback is also required in the firm and carrying greater involvement. The results of the primary importance incorporate the upgrade of occupation fulfilment of the representatives and improvement in their confidence and inspiration to work prompting better standards for dependability.
It is essential to accomplish the relocation of divisions in the association for the improvement of effectiveness and by and large execution. This includes the reskilling and reappointment of the accessible workers at the Manchester office and incorporating them at the Stockport office. This likewise includes confronting a few redundancies in work for which the representatives with less an ideal opportunity for retirement can be chosen and given full benefits.
Standardisation and Integration
The normalization in the combination of frameworks can be accomplished with the consolidation of new advancements and the foundation of new techniques for working (Pugh, 2016). It is critical to set up completely new and uniform work arrangements for the representatives across all the divisions to expand the acknowledgement of the change.
The foundation of a social change in the association can be achieved by empowering imagination and advancement among the representatives and remembering them for the dynamic (Wagner, 2016). The leaders can bring the social change in the association for empowering the employees to comprehend the purpose behind the change and the drawn-out benefits in their favour.
Table 1: Risk register.
|ID||Risk Name||Risk Type||Occurrence||Impact||Mitigation|
|1||Poor communication||HR||High||Moderate||Bottom-up communication.|
|2||Employee resistance||HR||High||High||Involvement in decision making, providing training and reskilling|
|3||Delay in standardisation||Operations||Moderate||Low||Analysis of functions and implementation|
|4||Technology issues||Administrative, financial||Moderate||High||Analysis of the external environment, invest in technology.|
|5||Poor employee morale due to culture||HR||High||High||Delegation of responsibilities and participative leadership|
The above table presents the risk register for the project.
Increasing the possibilities for project completion requires the elimination of the risks that can emerge and the resistance of employees. This can be done with the contingencies planning during and after the change of progress alongside technological advancement and cultural change. The undertaking possibilities will be set up dependent on the company’s new structure by shifting the Manchester facility at Stockport by considering the openness to performance risk for protecting the interest of the venture and the general organization.
Milestones, responsibilities and timing
Table 2: An action plan for the project.
The project will take 15 weeks to complete.
This report presents the merger of Colmar Chemical Company and Alpha Plastics. The design of correspondence and employee relations had been diverse across the companies, with Alpha being informal and Colmar being formal. The employees of Alpha had consistently remained engaged with the company matters but suffers from low morale in the merged firm due to the absence of inclusion in the decision making.
The recently merged organization intends to bring changes for synthetic fibres manufacturing from Manchester to Stockport but fears obstruction from the staff and extra redundancies. The shortcomings of the merged firm include helplessness to enhance worker confidence and coordination among divisional managers.
The firm can instruct the staff to communicate using informal channels. The PRINCE2 methodology effectively strengthens the core functions and systems of the business after the merger due to the alignment of the basic functions. The framework will also support the accomplishment of the scope of the individual projects and ensure proper quality management and completion within the predetermined cost and time.
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