Introduction
Change management refers to an umbrella term denoting each type of processes that managers of corporations implement in the preparation and support of their organizational change. The range of activities involved in the process include those applied to resources, budget allocations, businesses procedures as well as other operational elements of different projects undertaken by corporations (Todnem, 2005). In other terms, the application of the term change management is used in reference to the approaches that organizations undertake to ensure that they implement changes in their organizations smoothly and thoroughly. The focus of the procedures is on three issue concerned with the operations of the companies, which are enterprise change management, organizational change management, and individual change management (Aladwani, 2001).
This essay applies the theories and concepts of change management to the context of the case study of A.S. Watson Group. The company was founded in the Guandong Province of China as a small dispensary in 1828 but has since grown to expand its size as well as the product and service portfolio. The organizational approach to expansion, as the case study suggests, was the use of mergers and acquisitions. For instance, the organization has been involved in a series of acquisitions with different companies across different geographical regions. For instance, the Hutchinson Whampoa was the first company to acquire A.S. Watson Group before the organization would benefit from the strong economic power of the acquiring company to expand through Asia and Europe in the years that followed. Consequently, the organization has been keen to acquire and merge with other firms to facilitate its growth into new markets. Nevertheless, the case study suggests that the firm has had issues with an integration of the wide range of products and services provided into one business, especially in making the newer businesses suit in with the older businesses. For this reason, it is useful for the management of the institution to receive expert guidance on the application of the concepts of change management to improve their integration.
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In the course of the discussions in this essay, the author shall analyze and evaluate the managerial techniques adopted by A.S. Watson Group in the implementation and management of innovation and change using two approaches to change management synonymous with mergers and acquisitions. The two approaches are task and human integration that are explained further through the Kotter and Lewin models of change management. The chosen theories used in the analysis of the case study of the firm are the Lewin and Kotter’s models o change management. The essay further appraises the implications of the processes of change management that have been experienced by the organization.
Analysis and Evaluation
Two Change Leadership Styles and Behavior Adopted by A.S. Watson Group
Identification of Two Theories of Change Management
After a careful analysis of the activities undertaken by the organization, one might realize that the managerial setting used lessons from the Lewin Change Management Model as well as those from the Kotter’s Change Management Theory. While there are no steps listed in the case study highlighting the manner, in which the organization approached the issue of its expansion and growth of the product portfolio, it is critical noting that these two approaches to change management emphasize activities that could be traced to the managerial undertakings of the company as described in the case study. The organization realized the need to change its approach to business through focusing on customer satisfaction and create a competitive advantage over its competitors who were using the conventional approaches to corporate leadership. However, having been faced with the challenge of integrating the new acquisitions of the company into the older one, the company’s management realized the need to approach change management more creatively.
Analysis of the Two Theories in Relation to the Case Study
While the two theories have different numbers of steps entailed change management, their application in the context of A.S. Watson Group can be interpreted to suggest that they have the same steps. For instance, both models suggest the need for companies to identify the need for them to change. The Lewin model considers that organizations should always prepare for the change because it limits the chances of failure that would result from resistance to the proposed changes (Burnes, 2004). On the other hand, the Kotter’s approach to change suggests that managers should create a sense of urgency among the organizational members for them to change (Kotter & Cohen, 2002). In this case, A.S. Watson realized the need to change the nature of its operations in the wake of increasing levels of competition from other retailers who were busy using different approaches to competition, especially through price wars. Therefore, in the words of the Lewin model, it was necessary for the company to ‘unfreeze’ from the conventional procedures that threatened a lack of integration between the new and old activities of business that the organization had been acquiring throughout its history. In this case, the company knew that it needed to change its model of business to focus on customers better than it had done in the past.
The Lewin model may have moved too fast in recommending that companies execute their changes as soon as they shall have prepared to do so since it does not suggest the ways through which they should prepare. However, the theory remains largely significant to the nature of the company because of the support that the Kotter’s approach to change management offers. The latter theory indicates the different procedures that companies seeking to transition smoothly should take, which includes effective team building (Appelbaum et al., 2012). The management of A.S. Watson Group realized the role that its human resources would play in ensuring that it attained the new goal of orienting its services to suit the clients and improve their levels of satisfaction with the firm’s products. While there is no mention of a specific team that the company formed, one realizes from the case study that it relied on the entire group of employees for the attainment of the desired change. Therefore, the approach adopted involved the improvement of the capacity of the existing staff of the company in dealing with customers, which as the case study suggests, entailed staff training.
The company through that it would have useful for it to train its human resources in customer service. It is for this reason that the management introduced a personal care store in about fifteen locations in Asia that offered different types of products to the customers after effectively training the staff training would offer the best approach to transforming the corporate approach. In this case, the company wanted the employees to improve their knowledge in the new products that had been offered for sale, the elements of sales management, and the best skills in the provision of service to customers. The new strategy would be done hand in hand with the requirement that the company makes the employees understand the role of the mission and vision statements adopted by management. This element is one of the components of the Kotter’s model of change management (Appelbaum et al., 2012). Concerning the case study of the company, the transformation of the company into a new model of business relied on a campaign strategy, the Look Good, Feel Great, and Have Fun proposition, which would be pivotal in directing the activities of the organization towards the improvement of customer satisfaction levels with the types of services and products offered. The training also served the need to communicate the change among the different stakeholders of an organization proposed by the Kotter’s theory of change management.
The two models then coincide in suggesting that managers should proceed to implement their changes, especially when they shall have undertaken enough preparatory strategies. In this case, the organization settled on the implementation of the change strategy following its thorough market research that was effective for the identification of a market niche that appeared to have been ignored by other firms as well as through the creation of the personal care center. However, the case study does not suggest much concerning what the corporation had done to sustain the implemented changes.
Two Activities and Behavior of the A.S. Watson Group
Identification of the Activities
The organization of the company approached their change management using the Prosci’s approach. The focus of the change that the company adopted, unlike the rest of the firms that concerned price wars, dealt with the manner in which the organization would transform its activities to suit the needs of the clients. Therefore, from the analysis of the case study, it would be possible to argue that the corporation adopted the individual and organizational change management activities that are described by the Prosci’s model. The focus of this model considers that organizations do not change, and that only people change. Therefore, it would be useless for managers to concentrate on the transformation of their business models without considering the need to change the people who would deal with the new system. The management of the company focused on the two elements described in the case study.
Specifically, at the organizational change level, the case study suggests that the company ventured to create a competitive advantage for its brand through the provision of customer shopping experiences that were unique in comparison to the rest of the competitors. In the past few years, as the case study further notes, the group highlighted its uniqueness in the provision of unique customer experiences through its proposition to help the clients to have fun, feel great, and look good. The organizational transformation to focus on the clients was also evidenced in the establishment of a personal care store concept in fifteen nations across the Asian continent that would provide a wide range of product portfolio and improve the company’s sale of its brand of products. The new line of products would ensure that the firm concentrated on the tastes and preferences of a group of consumers who the existing competitors had not targeted for a long time.
Considering the element of individual change management, it was critical for the company to ensure that it transformed the culture of its employees. The management thought that it would be wise for the corporation to ensure that the employees understood the role that clients played in the success of the company. For this reason, the organization sought to train its staff to ensure that it understood the new business model in terms of its requirement from the workers. At the back of the minds of the managers of the company, it was critical that the employees be involved a great deal in transforming the corporate business model from one that focuses on the prices of products offered to one that catered for other elements of customer satisfaction.
Analysis of the Activities
The two main activities are in line with the propositions of both the Lewi and Kotter’s models of change management since they prepared the organization for the change that was desired by the managers of the corporation. Their objective was to ensure an integration of the businesses that the corporation was acquiring along the way. Considering the procedures of integration of companies in the contexts of mergers and acquisitions, the two procedures may appear similar, yet they follow quite different paths (Shrivastava, 2006). The integration of the tasks of the corporation hopes to ensure effectiveness in the identification as well as the realization of corporate operational synergies. In this case, as Zollo & Singh (2004) argue, the process entails the combinatory procedures entailed in the reshaping of the activities of the different companies involved in the mergers and takeovers that A.S. Watson Group undertook. For instance, this process was critical for the organization since the management had moved from the original focus on health care services to the provision of other services that were outside the scope of products and services in the original plan. The expansion of the firm into Europe and other Asian countries meant that the management would not ignore the business opportunities that were present in some other industries with which it had no experience. The problem at hand that the institution requires to solve is the integration of products sold under its brand with those that do not have such brands. It has been identified that the company only sales fifteen percent of its products under its brand name, which would be one of the indicators that it has been struggling with the task corporate integration procedures.
Having understood the concept of task integration, it is critical to note that human integration entails the development of positive and supportive attitudes towards the integration processes among the employees of the firms that merge or acquire each other (Shrivastava, 2006). In this case, it is needful for the companies involved in the process to ensure the creation of atmospheres of respect and trust among the employees of each of the companies in the mix. Usually, cultural management is one of the challenges that companies may encounter in their attempt to ensure human integration following mergers and acquisitions (Johnson, 2016). The difference arises from the preference for different styles of leadership by different corporate leaders as well as the other existing external factors in the environments within which companies operate. The case study notes that it has been challenging for the managers of the company to take their businesses to the global scale because of the fear that it would not have the required managerial capabilities required to sustain the operations at such a level as well as the differences in cultural competencies.
The issue of human integration in merges and acquisitions is one of the most critical elements that organizations should consider since it has been reported in literature, as one would stagnate efficiency. For instance, according to Kansal & Chandani (2014), managers who do not strive to attain this level of incorporation are likely to realize failures in their mergers or to take too long before realizing productivity from the same process. This idea seems to have been on the minds of the senior management of A.S. Watson Group since they considered the need to integrate their human resources through staff training. The focus of the training was not on job proficiency, but rather, on the need for the employees to revolutionize the approach of the company to customer service. For instance, the challenge that comes from operating in new locations, such as the entry of the firm into the Asian market, means that businesses should always strive to understand the expectations of their prospective markets before working hard to meet the set standards of quality (Kansal & Chandani, 2014). The case study suggests the same trough indicating that the managers at A.S. Watson Group thought that training the rest of staff in customer care would provide the company with the most appropriate chance of dealing with the needs of the target market. The data collected from a survey of the requirements of the market provided the needed metrics for staff training to meet the new standards of service delivery that would lead to the attainment of the set corporate objectives.
The case study suggests that A.S. Watson Group has been struggling with the integration of new and old business despite attempting to follow the two types of integration. As this analysis notes, the failure would have been occasioned by the fact that the management did not undertake to make the staff of the acquired companies to work together. Though the case fails to mention the motivation of the company to engage staff members from the different regions of the world in which the firm operates, this element is critical. According to Karanja (2015), ensuring that the staff of companies that merge work in harmony with each other is one of the most fundamental steps that corporate leaders in such contexts should undertake to reduce delays to the realization of profitability from the mergers and takeovers.
Apart from the training on effective customer service delivery, it would have been useful for the company to engage in processes that would result in an integration of all the human resources. The variation in the cultures of people in different parts of the world is now an issue to businesses because of economic integrations that have been facilitated by globalization. The managers who do not have sufficient cultural competency find themselves on the negative side of the divide since they would always struggle to realize the best out of the procedures. Overall, A.S. Watson Group might want to complete the process of human integration if it has to realize the biggest benefits from its numerous mergers and acquisitions that have characterized its growth trajectory.
Conclusion
The objective is this essay was to report on the approach to change management that A.S. Watson Group of companies that has used mergers and acquisitions to enter into new markets in Europe and Asia. The author has found that the company’s approach to dealing with change could be explained using the Kotter and Lewin models of change management since they relied in realizing the need for change and attempting to create a firm ground for the change through effective planning. The analysis also establishes that the organization is yet to realize the best out of its innovative strategy to dealing with the needs of customers from the fact that it still faces issues with an integration of its different businesses. While the firm has undertaken significant efforts towards task and human integration, the latter form of integration is yet to be cemented since the case study does not suggest the approach to improving corporation among the employees from the different companies in the merger. Therefore, the author proposes that the management of the firm considers adopting a strategy that would ensure the integration of human resources from the different companies and regions in addition to the training in customer satisfaction procedures that have been identified.
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