Approaches to managing change in e-business

Hayes (2002) notes that for external forces of change, it maybe difficult for those in an organization to manage and control the impact of change – the deterministic view. However, the voluntarist view is that managers can make an important difference to managing the impact of change. In the case of information systems management, it is clear that much can be done to reduce the impact of change although some negative aspects of change will remain. Change management is conducted by change agents who are the managers responsible for controlling change. In the context of e-business, the change agent could be the project manager responsible for implementing a new information system, an e-business manager responsible for increasing adoption of e-business by an organization, or specialist digital marketing or supply chain managers seeking to increase adoption of e-channels.

1. Senior management involvement

Cope and Waddell (2001) have assessed the role of leadership style in e-commerce imple­mentations. They assessed the most common approaches to e-commerce implementation, distinguishing between these approaches:

• Collaborative – widespread participation of employees occurs to define the changes required and techniques to achieve them.
• Consultative – management takes the final decision, after calling on some employees for input.
• Directive – the management team takes the decisions, with the employees generally trusting them to do so and being generally informed.
• Coercive – the management team takes the decision with very limited recourse to employees.

Of these approaches, the consultative approach was, as might be expected, most common, but other statements used in the research suggested that there were elements of other approaches.

2. Models for achieving change

There are many process models for achieving change which can be usefully applied to man­aging e-business-related change. A classic model for achieving organizational change was suggested by Lewin and Schein. It involves three stages:

• Unfreeze the present position by creating a climate of change by education, training and motivation of future participants.
• Quickly move from the present position by developing and implementing the new system.
• Refreeze by making the system an accepted part of the way the organization works.

Note that Lewin and Schein did not collaborate on developing this model of personal and organizational change. Kurt Lewin developed the model in unpublished work and this was then extended by Edgar Schein (1956) who undertook research into psychology based on Lewin’s ideas. More recently, Lewin (1972) summarized some of his ideas. Later, Schein (1992) concluded that three variables are critical to the success of any organizational change:

1. The degree to which the leaders can break from previous ways of working.
2. The significance and comprehensiveness of the change.
3. The extent to which the head of the organization is actively involved in the change process.

To achieve the unfreeze stages different staff can be identified for different roles by the proj­ect manager:

• System sponsors are senior managers or board members who have bought into the e-business initiative, are committed to major change and want to achieve success. The sponsors will try to fire up staff with their enthusiasm and stress why introducing the system is important to the business and its workers.
• System owners are managers in the organization of key processes such as a procurement manager or marketing manager who will use the e-business system to achieve benefits in their area.
• System users. These are staff in the different areas of the business who are actively involved in making the process happen. They could be a buyer in procurement or a brand manager within the marketing department.

Special types of system users can be identified, and it is important for the change manager to try to influence these staff to help achieve commitment among other staff. The three main types of system users that should be influenced are as follows:

• Stakeholders should be identified for each of the process areas where change will be intro­duced. These will be staff who are respected by their co-workers and will again act as a source of enthusiasm for the system. The user representatives used in specification, testing and sign-off are key stakeholders.
• The legitimizer protects the norms and values of the system; they are experienced in their job and regarded as the experts by fellow workers; they may initially be resistant to change and therefore need to be involved early.
• Opinion leaders are people whom others watch to see whether they accept new ideas and changes. They usually have little formal power, but are regarded as good ideas people who are receptive to change and again need to be involved early in the project.

For e-business implementation these roles will need to be identified for each implementa­tion project as well as the overall change.

A more detailed change model proposed by Jay and Smith (1996) identifies four phases:

• Initial orientation. In the orientation phase, it is necessary that there be a clear under­standing of the reasons for bringing about change. This should be identified as part of the e-business, e-marketing or SCM strategies. A change strategy must be developed that includes an indication of how results will be measured, the project milestones, and how objectives would be measured and the change project organized. A skilled change team should be established and committed change sponsors identified.
• The preparation phase will involve an analysis of the environment within which the change is to take place. This includes an identification of the critical success factors for change along with a threat analysis. A work-plan for the change process must also be developed that includes detailed tasks and timings. The change direction must be announced to those affected and there should be an emphasis on maximizing communi­cation effectiveness. It is necessary to communicate the future position to a wider audience and the need to make the change and its potential consequences must be clearly specified. The final step in this phase is to provide direction, particularly through strong communi­cation of the goals and how they will be achieved. Hayes (2002) notes the importance of diagnosis at this stage to evaluate the differences, particularly from a staff perspective, between the initial state and the final state. This diagnosis is used to build a case or vision (Chapter 5) for change which can be communicated to staff.

An example of an approach to communicating change to employees is provided by RS Components which, when first introducing an e-commerce site, set aside an area of their staff canteen and put up a stand staffed by members of the electronic commerce team. Other staff were then encouraged to learn about using the Internet and the services that the web site would provide. By doing this all staff understood the purpose of using the Internet and were more supportive of it. Additionally, it helped support the adoption of an in-company intranet. More formal education and training which explains the purpose of the Internet marketing strategy and provides practical training for those involved was also necessary.

• Change implementation. In the third phase, Jay and Smith suggest that the changes are implemented by piloting the change, introducing the new procedures, conducting training and finally rolling out the change. In cases where a new information system is being rolled out to the whole organization at the same time, choosing a pilot department or site may be difficult. However, the organizational aspects as they relate to reporting relationships, job definitions, training schedules, working procedures and reward systems must be still be defined and communicated. Appropriate training should be completed and the imple­mentation must be carried out using a roll-out plan.
• A supportive phase. In the final phase, the change must be stabilized. This means that management must openly commit itself to the change and fine-tune or adjust procedures where necessary. Measuring acceptance and new behaviour and producing a formal report can be used to evaluate the effectiveness of the change. There must be prevention of a relapse, such as an attempt to revert to old systems and practices or even bypassing the new system altogether. Conducting regular review meetings along with continual training and procedure reviews can help this.

Hayes (2002) has summarized how change managers can facilitate progress through the over­all change process and progress through the transitions an individual makes during change.

He notes the following general implications of the transition model for change managers:

• The overall form of the transition curve will take different forms – individual stages may be longer or shorter and the degree of mood change at each stage can vary considerably.
• There will often be a time lag between the announcement of a change and a reaction to it. It is possible to mistake initial shock and denial for acceptance of the change.
• Different people and different parts of the organization will pass through the change cycle at different rates and in different ways.
• Change managers will typically be out of step with other staff since they are involved earlier and deeper.
• The cycle cannot be avoided, but there is much that change managers can do to facilitate people’s progress through it.

Hayes (2002) also gives specific advice about how change managers can facilitate change through different change transitions. This advice is summarized in Table 10.5 together with typical implications for e-business initiatives and applications.

3. Organizational culture

Bocij et al. (2005) suggest that social relationships in an organization that are part of its cul­ture are important. They say‘the efficiency of any organization is dependent on the complex formal and informal relationships that exist within if. Formal relationships include the hierar­chical work relationships within and between functional business areas. Informal relationships are created through people working and socializing with each other on a regu­lar basis and will cut across functional boundaries. E-business-led change has the capacity to alter both types of relationships as it brings about change within and between functional business areas.

Boddy et al. (2001) summarize four different types of cultural orientation that may be identi­fied in different companies. These vary according to the extent to which the company is inward-looking or outward-looking, in other words to what extent it is affected by its environ­ment. They also reflect whether the company is structured and formal or whether it has a more flexible, dynamic, informal character. The four types of cultural orientation are:

• Survival (outward-looking, flexible) – the external environment plays a significant role (an open system) in governing company strategy. The company is likely to be driven by customer demands and will be an innovator. It may have a relatively flat structure.
• Productivity (outward-looking, ordered) – interfaces with the external environment are well structured and the company is typically sales-driven and is likely to have a hierarchical structure.
• Human relations (inward-looking, flexible) – this is the organization as family, with inter­personal relations more important than reporting channels, a flatter structure and staff development, and empowerment is thought of as important by managers.
• Stability (inward-looking, ordered) – the environment is essentially ignored, with managers concentrating on internal efficiency and again management is through a hierarchical structure.

Source: Dave Chaffey (2010), E-Business and E-Commerce Management: Strategy, Implementation and Practice, Prentice Hall (4th Edition).