Change management refers to the approach that a manager, an organization or an individual uses to shift from one organizational state to another (Gans 2011). Change is inevitable, and changes always occur in various organizations. The prime concern for organizations, when it comes to organizational changes, is how well the stakeholders will adapt to change. Adaptation, control and effecting change are the most crucial aspects of change management. The main goal of change management is usually to reduce any negative effect of such change on the organization and employees through control of organizational change efforts (Gans 2011). Organizations have realized the importance of using various diagnostic models, used to undertake a systematic diagnosis of the organization.
The following report describes change management in regards to the Samsung Corporation. As a large Corporation, Samsung is constantly facing organizational changes every now and then. The paper will explore the use of the Force Field analysis as a diagnostic model for Samsung Corporation. The paper will give a brief analysis of the organization’s internal, external and temporal environment. It will identify the key problems and inefficiencies that affect the organization and any interrelationship between the problems. The paper will also identify interventions and recommendations for the diagnosis.
Samsung is a multi- billion dollar, leading electronic company, having grown from its inception in Taegu, Korea in the year 1938 (DATAMONITOR 2010). It started off as a small export business, but now it has grown while specializing in digital products, memory, system integrations and media. Samsung products (especially the televisions and smart phones) are recognized all over the world due to the high levels of innovations and quality involved from production to distribution (Sustainability Report 2011). In the year 2007, Samsung exceeded annual sales of $100bn mark for the very first time in the history of the company (Khanna 2011). Samsung has been taking advantage of the global technological advancements, thus responding with advanced innovations, products and technologies that have enabled it to keep a competitive edge against its competitors.
A Brief Analysis of Samsung’s Internal, external and temporal environment
In the internal environment, Samsung can be said to be particularly innovative when it comes to production of electronic products, thus realizing high profits (Sustainability Report 2011). Samsung has six design labs with approximately 450 staff who work in the design laboratories. In these labs, the staff’s work is to understand customer needs through research, whereby they use approximately $6bn on research (Khanna 2011). The company has realized that it has strengths in gaining a strong hold in consumer electronics, high skilled labor is available to them, commendable focus on customer service and marketing mixes, loyalty of employees, strong management and increased sales due to low margin strategy. However, it also lacks brand recognition in mobile phone sector and has poor pricing strategies.
In the external environment, Samsung faces several threats and opportunities too. For example, it faces exceptionally high competition from other electronic and digital corporations such as Nokia, Apple and Sony in the mobile phone sector (Samsung Dost 2012). Because of growth of the flash memory industry, Samsung has been contemplating to shift from DRAM memory to flash memory (Sustainability Report 2011). Also, the customers are becoming very price- conscious due to the high concentration of suppliers. However, there are no temporal factors that may affect the company as per now.
Current Changes in Samsung Company
Samsung has had to cope with various changes in order to enhance growth and development of the company. Samsung recently decided to increase the number of employees in all branches across the globe in order to increase its workforce (Heejin et al. 2005). Having the many branches across the globe, Samsung has continued to employ more and more employees in Korea and outside Korea. The company either employs or outsources the work force, meaning that change management is crucial for the human resource department. By the end of the year 2010, the company had a total of 190,464 employees, whereby 95,662 worked in Korea, 94802 worked in international branches while 67,750 accounted for outsourced persons (Heejin et al. 2005). Every year, Samsung has been employing, contracting and outsourcing more and more employees. This reflects an aspect of constant change that occurs in most businesses, requiring significant management of change by the company.
The other change that is vital for the company is the introduction of a new global code of conduct that should guide each and every employee in the company. The code of conduct describes the expectations of Samsung upon all the branches and employees worldwide (Laczniak & Kennedy 2011). Samsung has introduced the global code of conduct in respect to its aim of becoming a world leading company while contributing to the betterment of the global society. The code is supposed to be followed by all employees and subsidiaries across the globe by complying with all laws and ethical practices as a socially responsible company. The code of conduct covers issues to do with law, ethics, culture, respect, safety and social responsibilities. This change should be implemented at all management and subordinate levels, and respected by internal and external stakeholders of the company across the globe.
Application of Force Field analysis as a diagnostic model for Samsung Changes
Force Field Analysis
The Force Field analysis refers to a diagnostic model developed by Kurt Lewin, used of various situations like in change management (Kruglanski et al. 2012). It is usually a vital tool for analyzing situations that deal with overcoming resistance to change in an organization or company (ORGANIZATION & MANAGEMENT THEORY, 2009). In his model, Lewin recognizes that there are two main opposing forces that act upon change in an organization. These forces are the driving forces and the driving forces. In other words, the driving forces express the factors that represent the desire to implement change while the restraining forces refer to the opposing forces that may hinder implementation of change in the organization (Van de Ven & Sun 2011). This can be expressed through a diagram as shown below:
Force Field Analysis – Kurt Lewin Source (Kruglanski et al. 2012)
The diagram above shows that the force field is usually in equilibrium between the two forces before the change is implemented. Therefore, for change to be implemented the equilibrium mus
t be interrupted by the addition of factors to either the driving-forces side or to the restraining- forces side (Bold 2011).
Problems and Inefficiencies affecting the organizational change
Based on the force field analysis, there are various driving and restraining forces that affect organizational change in Samsung. Considering the two changes mentioned above, the forces can be categorized as follows:
Driving forces based on (Samsung Sustainability Report 2011):
1. The C.E.O for Samsung is totally committed and dedicated to the success of these changes because they show that the company is growing.
2. The human resource department supports the code of ethics changes because it will offer guidelines to employees on what is expected or not expected from them.
3. The departmental managers support the addition of employees because some employees in various departments had been complaining of being overworked due to increasing work in the departments
4. Employees had complained of having no guidelines on how to act at the work place
5. The company will strike a balance between work and the number of employees assigned to various tasks within the company.
Forces against Change based on (Samsung Sustainability Report 2011)
According to the diagnostic model used (Force field analysis), it is vital to consider the opposing forces that resist change
1. The board of directors feel that it is not the right time to continue increasing the number of employees in the company. This is because it might impact negatively on the company returns because of the increase in the expenditure in terms of salaries.
2. The employees feel that the global code of conduct consists of too many rules that they may not be able to remember or effect in their daily operations.
3. Regional managers are worried about some of the rules in the code of conduct that may not rhyme with some local laws and regulations. They fear that the code of conduct may not recognize that different states, countries and governments may have laws and regulations that are in contrast with the global code of ethics
4. The finance department feels that there will be a strain on the finances once new employees are brought on board.
5. The existing employees feel that the additional new employees might come to take their positions in the company. They have feared that once the company employs more workers, their benefits from the company might be reduced with an aim of streamlining the salaries by a reduction.
Inter relationship between the above problems (the restraining forces)
The problems identified above (the restraining forces) have a relationship with each other because they all point towards resistance to change. Resistance to change refers to the behavior of individuals or groups once they perceive that the change that is just about to occur is a threat to them (Gans 2011). In essence, the board of directors feels that the increase in the number of employees has not been strategically planned especially due to the increase in the salary expenditure. This is the reason as to why they are highly resistant to such change. The board of directors shares those sentiments with the finance department. This can be seen in the resistance that the finance department has against employee increase in the company. They feel that the finances will be restrained because of increase in salaries.
The employees also exhibit resistance to change because they feel that the code of ethics will give them a hard time to adapt to its rules and regulations. The same case applies to the regional managers (those based outside Korea) who feel that the code of ethics will be hard to implement because different countries may have conflicting state and government laws. They are not sure how they should act in case a certain law conflicts with the state and country laws of the regions where they work. The existing employees are also resisting change in terms of employment of more workers in the company. This is because they fear that the salaries might be reduced to accommodate the growing work force. This means that there is always an interrelationship between the restraining forces in the Force Field Model.
Underlying Sources of Resistance to Change
Some individuals or groups of people may be having parochial self-interest. Parochial self interest refers to instances where individuals may be more concerned about their own interest, thus having a biased view caused by their perception of the change (Mariana & Violeta 2011). In this case, the existing employees may feel that the new comers will replace them in terms of benefits and opportunities to grow.
Also, the employees could be so engrossed in their normal operations, thus finding it hard to leave that habit and accommodate the use of code of conduct in their daily deliberations of their work. Habits can be extremely hard to change since they usually form a well-established base that has both comfort and security (Mariana & Violeta 2011).
Another underlying problem could be misunderstanding, whereby the regional managers could be having inadequate information. Communication problems can lead to resistance to change. If they had answers to their questions, may be they would not resist the implementation of the global code of conduct.
Also, the board of directors and the finance department could be having different assessment of the situation. When individuals or groups assess situations differently, disagreements may arise over the need for change (Shin et al. 2012). One group may find it advantageous whereas the other group feels otherwise.
The employees could also be harboring fear of the unknown and negative economic implications. Organizational changes always generate fear and anxiety due to uncertainties (Mariana & Violeta 2011). Employees may perceive that certain changes will bring negative impacts on their rewards, benefits and pay. All the above reasons are vital to the operations of the organization and the underlying issues need to be sorted out through change management.
Intervention to tackle the problem of resistance to change
The first intervention would be to communicate effectively regarding the changes that are to be implemented. Communication refers to the aspect of explaining to all stakeholders the necessity of implementing change in an organization (Thomas et al. 2009). The C.E.O (being in the fore front of change implementation) should understand the value of explaining to all employees and regional managers of the importance of adding more employees in the organization and the advantages of having the code of conduct within the company. For example, the CEO may explain to the regional managers that in case the local laws do conflict with the global code of conduct for Samsung, the local laws should be preferred against the code of conduct. That way, the regional managers, will understand that it is easy to implement such a change. Any communication should be direct, honest and accurate to enable employees to understand the whole picture (Shin et al. 2012).
The second intervention would be facilitation, training and support. Facilitation and support can be vital tools of overcoming resistance to change (Patt, & Julie 2012). Support can be facilitated through listening to the involved parties (employees, finance department and regional managers), and providing the necessary guidance depending on the queries that may arise. The management can listen to why the employees are resisting change and assure them that the change is not a threat to their positions; rather, it is for the betterment of each person and the overall company. The company should also listen to the board of directors and the finance departments. This is to ensure that they can all come up with a strategic plan regarding the salary that the new employees will be paid.
Action Plan and Recommendations
1. The Chief Executive Officer should first discuss the issue of introducing new employees with the board of directors and the finance department. Communication and involvement of every party is vital for the success of the change implementation (Mariana & Violeta 2011). This is because the three crucial bodies of the organization seem to be in conflict due to the inadequacy of information. He should call a meeting with the concerned parties and explain the importance of adding new employees and the source of funds for their salaries.
2. After the meeting, the C.E.O should write a memo to all employees and regional manager, explaining the importance of the global code of conduct, while explaining how to act in case the rules and regulations in the code differ from countries outside Korea. This can be done through the web, to ensure that it is fast, confidential and efficient in reaching the many employees within and outside Korea.
3. The company should then conduct a video conferencing with all regional and departmental managers to explain to them that the employee changes will not affect the salaries for the existing workers. This should then be communicated by the line manager to their subordinates in order to remove any negative perceptions or fear amongst the employees.
4. After ensuring that all the questions from employees, board of directors and finance departments have been answered and that every stakeholder is ready to accept change, the CEO should authorize the hiring of new employees and introduce the new code of conduct to all employees.
The above report describes change management in regards to the Samsung Corporation. Samsung is constantly facing organizational changes every now and then because of its size in the electronics industry. The paper has explored the use of the Force Field analysis as a diagnostic model for Samsung Corporation. The model has successfully determined the driving forces towards change and the restraining forces against change, thus giving the organization an opportunity to find ways of resetting the equilibrium. The paper has also given a brief analysis of the organization’s internal, external and temporal environment. It has identified the key problems and inefficiencies that affect the organization and any interrelationship between the problems. The set of interventions given above can significantly ensure that all stakeholders accept change and overcome factors that cause resistance to change.
Personal Input to the overall assignment
I started the paper with thorough research of the relevant topic. I researched regarding management and change management from various sources. Apart from research, I undertook reflection of the management course, especially all the diagnostic models that I had learnt in the course. After going through all the models, I chose one that I applied in the assignment. I settled for the Force field model, and I embarked on more research regarding the model. Having been given the opportunity to choose one organization among any private, public and voluntary organization, I chose Samsung Corporation. Samsung is a private company that has a lot of changes due to its large size. I did a lot of research about the company especially the changes involved in the company currently. That is how I came up with the employee hiring and the introduction of the code of conduct. I had the opportunity to access all these information through peer-reviewed journals related to Samsung Corporation.
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