Culture in Change Management
Culture in Change Management
Culture in Change Management
The only constant reality in life is change. Change is not only observable on a personal level but also an organizational front. Nonetheless, managing change is a challenging task that it takes effort, energy, training, and time (Hickman & Silva, 2018). Change is also characterized by uncertainty and fear, and therefore most people and organizations prefer to maintain the status quo. With the Internet Age introduced by the 21st century, maintain the status quo is harmful to business as it puts companies at the risk of losing their competitive advantage as witnessed by various companies such as Levi Strauss & Co., which is a textile company in the United States. Given that change destroys the familiar corporate culture and status quo, managers should be very careful when implementing change because people are inherently resistant to change. Understanding and applying the best change theory helps a company to implement change efficiently.
Unfortunately, managers in most organizations rarely pay attention to the impacts of culture on organizational change, even when confronting major problems. Often, managers disregard the power of culture in maintaining the status quo as they regard culture as too mushy and soft to address (Kezar, 2011). Other managers think that a company’s culture adjusts itself once the new strategy is in place or feel that the costs for changing the company’s culture are considerably high as well as difficult to achieve. Others yet, believe that they can avoid addressing their company’s culture until the company has implemented the change, which may include new policies and procedures. What such managers fail to understand is that when change is introduced in an organization, stakeholders, including employees, shareholders, suppliers, and investors, expect an intrusion or a disruption (Kezar, 2011). As such, the culture that these stakeholders are used to fights hard to defeat the change and maintain the status quo. Consequently, significant changes mean more intrusion and more disruption, and therefore, the culture works very hard to defeat the implemented changes.
Purpose of the Study
As a result of the tremendous change that has come with the Internet Age, the business environment is constantly changing, which makes it important for managers to apply the right systematic strategies in limiting stakeholder resistance towards a positive corporate change process. The main purpose of this research paper is to investigate the significance of an organization’s norms, values, as well as principles in change management. This paper with pay special attention to one of the textile companies in the United States, Levi Strauss.
Significance of the Study
Levi Strauss & Co was among the leading textile companies in the United States. However, today the company experiences significant challenges in maintaining a competitive advantage over other companies such as L Brands, Inc., Abercrombie & Fitch, Co, Coach, Inc., American Eagle Outfitters, Inc., and Urban Outfitters companies among others. This paper is important because it provides useful information on how textile companies such as Levi Strauss & Co. can revolutionize the company through change management strategies while paying special attention to its culture.
Some of the questions that this paper seeks to answer are:
- What value does culture change create for the company and the customers?
- Why do people resist change?
- What role does culture play in change management, and how can a company limit resistance?
- How has globalization created a need for change in the textile industry?
- What are the advantages and risks of not making the necessary change?
- What theories support the role of culture in change management?
This paper investigates the role that corporate culture plays in change management. The methodology that is applied in this research study includes a literature review, interview, and descriptive studies. The materials used in this research paper provide detailed information about the importance of considering culture in change management. The literature review offers supporting evidence that links cultural consideration to successful change management within an organization. The descriptive studies offer information about the best practices during organizational change supported by theories.
The criteria that are used for the inclusion of the articles for both literature review and descriptive studies pay attention to the nature of articles, timeframe, keywords, and search area. The timeframe applied for the secondary resources is within the past 30 years. The nature of the resources used includes business news articles, peer-reviewed articles, and journals. The keywords used include organizational change, corporate culture, change resistance, strategic change management, and culture change. The search areas include business websites such as the Society for Human Resource Management (SHRM)and the United States Department of Labor and Organization for Economic Co-operation and Development (OECD). The inclusion criterion helps in setting research boundaries for the literature review to ensure that the research paper is focused and the discussion is valid.
Background information on Levi Strauss & Co.
Levi Strauss & Co. is a privately owned textile firm that was established by Levi Strauss about 164 years in 1853. For many decades, Levi Strauss & Co. was able to effectively compete as a clothing company known globally for Levi’s brand of denim jeans. This company was the first textile corporation to make the first blue jean across the globe, and since 1853, the Levi Strauss & Co. has heavily relied on innovation to come up with new products. Throughout the 1960s, this company benefited from various U.S movements such as counter-culture groups and campus rebellion groups, which wore jeans as their uniform. During this period, sales doubled, and in three years, the company revenue almost hit $200 million. By 1979, the Levi Strauss & Co. had become the largest clothing industry across the world and had licensed its brand to be used in other products such as socks as well as shoes. By this time sales had hit $ 2million. Levi Strauss & Co. had ventured in about sixty nations. During the prosperous years, Levi Strauss & Co. had fifty-three production facilities and thirty-two customer service centers in forty-nine nations. Some of these countries included Japan, Europe, South Africa, Argentina, India, Australia, New Zealand, and the Philippines.
Nonetheless, from the beginning of 1980, Levi Strauss & Co. started to experience market difficulties, and although the demand for denim jeans stabilized, its profits flattened. Thus, to enhance distribution, Levi Strauss & Co. reached agreements with marketing companies such as Sears and J.C Penney, but the profits still fell by about 25% (Au, & Ho, 2006). In 1982, the company was forced to shut down nine production plants, which led to layoffs of 2,000 employees globally. In 1885 Levi Strauss & Co. restructured the company and was taken private in a leveraged buyout for $1.45 billion. The company afterward introduced a successful upscale men’s pants line known as Dockers, which saw that sales increase to $4 billion. Since then, the company invested in adverts, campaigns, and stand-alone jeans boutiques to maintain sales. Despite these endeavors, the company still faces stiff competition from other leading companies across the United States.
In an effort to provide the best analysis for the importance of culture in change management, a research interview was conducted with Levi Strauss & Co. CEO Mr. Chip Bergh. Chip Bergh has been the chief executive officer of Levi Strauss & Co. since 2011 and is also a member of the company’s board of directors. As such, the Chip Bergh is well acquitted with the company’s history, market trends in the textile industry, the corporate culture that guides Levi Strauss & Co., challenges faced by the company, and what needs to be done to ensure market competition.
Interviewer: As a textile company, who you say that Levi Strauss & Co. has a competitive advantage in the market today?
Interviewer: Why is that?
Interviewee: The textile industry has undergone a great deal of change, specifically due to the high levels of competition and global sourcing. More so, the textile and clothing industry is now characterized by significant changes such as high volatility, short product lifecycle, high chances of impulse buying, and low predictability. Additionally, retailers across the world source for their textile supplies from companies that can meet their specific needs in time. This has been a huge setback for the company because it has failed to adopt the necessary strategies for its supply chain.
Interviewer: What do you think is the main hindrance in implementing effective change?
Interviewee: Our corporate culture. Levi Strauss & Co. is largely a bureaucratic corporation, which makes the implementation of change very difficult. Our employees, shareholders, and some managers resist change.
Interviewee: What do you think should be done?
Interviewee: The Company needs to change its supply chain and adopt one that enables it to optimize efficiency, minimize acquisition and delivery time, cut on operations costs, and improve product distribution globally.
According to a report given by OECD, many companies are driven to change because of several reasons today (Rothaermel, 2016). These factors include technology, globalization, market conditions, organizational growth, and poor performance. Whichever the cause, stakeholders in a company will always resist the change, which puts the company at risk because failure to adopt the necessary changes may influence the company’s ability to secure a competitive advantage in the market. A survey conducted by the SHRM (2007), change resistance is one of the biggest reasons why most corporations fail to change. During change, a company may experience active resistance, passive resistance, or compliance, which is destructive to a company’s endeavors for change. Effective change management out to cultivate enthusiastic support from the stakeholders and to achieve this. The corporate managers have to understand how their corporate culture is affecting the change.
People simply resist change because it disrupts their “way of doing things,” which can be defined as culture. Notably, culture in change management is a significant component in every firm that all corporate developers and managers in human resource departments must consider when making plans and executing any viable changes within an organization. Organizational change management refers to a systematic and organized way through which corporations apply their tools, resources, and knowledge in an effort of facilitating change. According to Kneer (2013), change management can be defined as the strategy of systematic and planned chance that is achieved based on how the structure of the organization influences the culture of an organization and stakeholder behaviors. The endeavor of change management implies that the change process demands proper planning and systematic management. Proper change management facilitates progressive, efficient, and effective implementation of new methods and systems within a firm. Change management also involves a company’s response to external stimuli when it cannot straightforwardly influence factors such as political, social, competitor’s strategies, legislations, technological advancements, and globalization.
Pfister (2010) asserts that the culture of an organization refers to a shared understanding of a specific group of individuals in a specified context. The shared understanding originates from a set of principles, values, and norms that the individuals deem significant to them and, as such, align their practices towards those particular standards. According to Bhasing (2010), the principles, norms, rituals, and values of a company define its culture. Typically, organizational culture refers to the profile of a group of individuals within an organizational context in regard to factors like standards, values, and behaviors. In the business world, culture defines the way things are done within a company and entails the fundamental patterns of assumptions that have been working for the company in the past and are considered valuable. New stakeholders are inducted to embrace them while working with the organization. While change management purposes to take a corporation through various levels of development as stipulated by the goals put in place by a firm, several factors make a huge difference in determining the failure or success of change management tasks.
Doppelt (2017) argues that people adopt and maintain certain cultures because of their personality, feelings of certainty, fear of failure, the impact of the change, the prevalence of the change, and the perceived loss of power in case of change. When a corporation is comprised of many stakeholders with a low self -concept, they are likely to resist the change because they feel that they may not be able to adjust to the change accordingly and be successful in the new system. As such, they fight to keep the status quo and culture of the organization. Secondly, change brings feelings of uncertainty. Changes such as mergers make people lose jobs while the company’s revenue may take a turn to the worse. The uncertainty created results to fear and stress because people feel that they may lose control. Corporations also fail to change because the stakeholders fear failure as they do not know how performance may be affected by a new system. People also resist change because it may impact their lives negatively and only welcome change that is favorable to them. The prevalence of change may also cause change resistance, mainly if it involves key departments. Lastly, people may fear change if it is associated with losing influence with the company.
According to Hickman & Silva (2018), a flexible organizational culture limits resistance and helps people to adopt changes implemented in a new system easily. Company managers need to understand the relationship between culture and change management. One of the questions that corporate managers ought to ask themselves when orchestrating significant changes is how the existing culture and mindset are similar to the required set of behaviors expected to realize the change. When the disparity is high, the company is at risk of not realizing its goals. According to Lewin’s Change Management Model proposed by Kurt Lewin in the 1950s, a company should apply three steps to achieve systematic and effective change (Ala et al., 2013). The first step is the Unfreeze stage, where the company prepares for change by purposefully changing the stakeholder’s mindset and behaviors towards a proposed change. During this step, the change managers should focus on breaking the status quo and eliminating fear and uncertainty.
The second step is to change implementation. During this phase, the company implements a real transition. The success of this stage depends on how well the management creates the vision for change, communicates the change plan, develops a sense of urgency, builds a coalition, engages employees in decision making, and provides support prior and during the transition. The last step, according to this theory, is refreezing. The company ensures that people embrace and implement new policies and procedures. During this stage, the management tracks the changes to ensure that the organization is stable again. The behaviors, norms, principles, and values of the company must be aligned with the new system.
Currently, industries have adopted outcome-based strategies rather than input-based (World Economic Forum, 2015). The success of a 21st industry is measured through its outcome-based targets and its ability to connect with the significant teams across all functions. It is also measured through is the ability to find the right partners to form collaborative platforms and bridges. With the current demand for speed, the textile company would also need to form meaningful alliances with the transport industries, including road, railway, shipping, and air transport. A collaborative ecosystem will require innovation, flexibility, and efficiency as its core strategic approach.
These demands make it necessary for companies in the textile industry such as Levi Strauss & Co. as well as others in different sectors to employ the necessary changes to acquire a competitive advantage in the global market. Levi Strauss & Co. need to collaborate with suppliers that can supply raw materials promptly and at a low price. The company needs to access its culture and destroy the current status quo to adopt new supply chains that will be more beneficial to the company.
Conclusively, companies are prone to change due to poor performance, technological advancements, globalization, workforce demographics, organizational growth, and market conditions, among other factors. Nonetheless, regardless of the factor, people will always resist change as it disrupts and intrudes on their status quo. Based on Lewin’s Change management model, a company must systematically plan change around three steps, which include unfreeze, change, and refreeze.
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