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Change Management in Nestle: Implementation of Erp System

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Words: 7003 |

Pages: 15|

36 min read

Published: Mar 20, 2023

Words: 7003|Pages: 15|36 min read

Published: Mar 20, 2023

Table of contents

  1. Abstract
  2. 1. INTRODUCTION
  3. 1.1 INTRODUCTION TO ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM:
    1.1.1 INTRODUCTION TO CHANGE MANAGEMENT:
    1.1.2 INTRODUCTION TO NESTLE COMPANY:
    1.1.3 INTRODUCTION TO CHANGE MANAGEMENT AFTER ERP IMPLEMENTATION:
    1.2 OBJECTIVES OF THE STUDY:
  4. 2. REVIEW OF LITERATURE
  5. 2.1 LITERATURE REVIEW:
    ILKKA KEMPPAINEN (2004) –
    DONALD B. FEDOR, DAVID M. HEROLD (2004) –
    THOMAS F. GATTIKER, DALE L. GOODHUE (2005) –
    TRIEU THI VAN HAU, DR JOZE KUZIC (2010) –
    AHMED A. ELRAGAL, AYMAN M. AL-SERAFI (2011) –
    HAMIDREZA VAKILIFARD, SHAHLA ABBASZADEH MEINAGH, MOHAMMAD REZA KHATAEE (2013) –
    SAMWEL MATENDE, PATRICK OGAO (2013) –
    GOEUN SEO (2013) –
    KHALED ALMGREN, CRISTIAN BACH (2014) –
    RICHARD KAPUPU, MURIEL MIGNERAT (2015) –
    JIAHUI MO (2015) –
    VIJAY M KHAPARDE, DR. S M KHOT (2015) –
    MOTAB RAJA ALJOHANI (2016) –
    DR. REVENIO C. JALAGAT (2016) –
    HAMZAH ALTAMONY, DR ALI TARHINI, DR ZAHRAN AL-SALTI, ALA’A HAMDI GHARAIBEH, DR TARIQ ELYAS (2016) –
    KWANG O. PARK (2018) –
    ARROGAH ADADE-BOAFO (2018) –
    WOUROUD ELFARMAWI (2019) –
    HUONG DOAN, HIEN NGUYEN (2020) –
    SARA ALMUHAYFITH, HANI SHAITI (2020) –
  6. 3.CHANGE MANAGEMENT STRATEGY AND ITS IMPLICATIONS
  7. 3.1 INTRODUCTION TO CHANGE MANAGEMENT:
    3.1.1 TYPES OF CHANGE:
    3.1. 2 MANAGING CHANGE:
    3.1.3 COMMITMENT TO ORGANIZATIONAL CHANGE:
    3.1.4 PERCEPTION OF CHANGE:
    3.1.5 EFFECTIVE CHANGE MANAGEMENT STRATEGIES:

Abstract

This essay examines the importance of change management in the successful implementation of Enterprise Resource Planning (ERP) systems. ERP systems are software solutions that integrate business processes and data flow in real-time, but their implementation can be complex and expensive. Change management strategies, including top management support, effective training, clear communication, and experienced staff, can help ensure success. The case study of Nestle is used to illustrate the challenges, risks, and benefits of ERP implementation and change management strategies. The essay also discusses the tools used to implement successful ERP applications. The study highlights the importance of considering the people side of change in the implementation of ERP systems to achieve the ultimate business outcome.

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1. INTRODUCTION

1.1 INTRODUCTION TO ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM:

Human resource management, Customer relationship management (CRM), Supply chain management, inventory management, Business Intelligence (BI), Financial Management are the main components of the ERP software system which basically includes all the main business processes and keeps information flowing through the entire system in real-time thus helps in making effective decisions.

As ERP system are expensive and complex should be implemented properly by considering the change management critical success factors or else it can lead to failure. Some of the change management strategies that have proof to be successful are support from top management, effective training and proper knowledge transfer, effective communication, clear systematic plans, and experienced people.

Prime players of ERP solution such as SAP, Microsoft, Oracle provide the required ERP software solution to large, mid-size, and small organization according to their parameters of requirement such as may it be for business expansion, and may it be adding new functions to the existing business for its improvement. So, choosing an appropriate ERP solution is important for the business as business management software solutions may differ from organization to organization.

1.1.1 INTRODUCTION TO CHANGE MANAGEMENT:

Change Management (CM) is an approach which supports, helps, and prepares organizations, teams and individuals in making an organizational change. Customer requirement pressure, evolution of technology, crisis responses, organizational restructuring, internal reviews of activities, acquisitions, mergers, and competitive pressure are some of the important drivers of change.

It is an approach in which the organizations describe and implements change within both its internal and external processes so as to adapt with changes. In organizational perspective the change which is concern about any event or program that the enterprise undertakes which causes major disruption in its daily operations such as implementing an ERP software system.

The right executive sponsor, cultural willingness to adapt and change, individual willingness to change, communication and communication planning, rewards and consequences, resistance management, employee training and development, readiness assessments, data collection, feedback analysis, after project review are the elements for implementing a successful change management process.

So, when deploying ERP software solution across the whole organization proper change management process, tools, and strategies should be used to manage the people side of change so as to achieve the ultimate business outcome.

1.1.2 INTRODUCTION TO NESTLE COMPANY:

Nestle S.A. a swiss multinational company founded by Henri Nestle in the year 1866 is headquartered in Vevey, Vaud, Switzerland is one of the largest foods and drink processing company around the globe and is the major shareholder of Loreal cosmetics company.

With subsidiaries all around the world it currently offers for about 2000 brands with a broad spectrum of products which includes coffee and tea, baby food, ice cream, confectionery, pet food, infant formula products, snacks, breakfast cereals, dairy products, frozen foods, healthcare nutrition, and milkshakes. Maggi, KitKat, Nescafe, Smarties, Nespresso, Stouffer’s are some of its products which contribute the most to its annual profit.

1.1.3 INTRODUCTION TO CHANGE MANAGEMENT AFTER ERP IMPLEMENTATION:

To sustain in this today’s competitive market businesses, have to make sure that their businesses processes are streamline and aligned together so that it can generate efficient outcomes. Enterprise Resource Planning (ERP) is a software system which is a consolidation of certain software packages which unifies the entire business activities and bring in usability, reduced cost, efficiency, centralized control, and high productivity.

Implementation of ERP can only be successful if proper change management tools, processes, and strategies are executed. Change a particular framework of business process is not easy and takes considerable amount of time as the change is not only about the deployment of a certain software system but it is about the changing the employees work approach, function, processes, and organizational culture. So basically, change is about the people of the organization.

1.2 OBJECTIVES OF THE STUDY:

  • To study about the significance and benefits of ERP software system.
  • To understand the change management strategies in ERP implementation of Nestle company.
  • To determine the challenges involved in Change Management in Nestle after implementing ERP solution.
  • To assess the risk involved and precautionary measures to avoid risk in change management after implementing ERP solution.
  • To study about the change management tools used to implement a successful ERP application at Nestle.

2. REVIEW OF LITERATURE

2.1 LITERATURE REVIEW:

ILKKA KEMPPAINEN (2004) –

In this research paper titled as “Change Management Perspectives in an ERP implementation” the author describes about the problems faced by the global fortune company when implementing an ERP (SAP R/3) system. A successful ERP implementation primarily is a change management process when not addressed properly there is chance that few of the business units can be left integrated thus like the case of this company. As always technical, economical, and managerial factors are considered as a major problem while implementing ERP and often the human side is left unaddressed. Ultimately it was understood from this report as that the issue in implementing ERP is not the technology but the organizational and human changes which is are not conveyed in a proper manner can also lead to implementation failure.

DONALD B. FEDOR, DAVID M. HEROLD (2004) –

In this research paper titled as “Effects of Change and Change Management on Employee Responses: An Overview of Results from Multiple Studies” the authors describe about how to sustain in the highly competitive business environment businesses needs to change their business processes repeatedly. Change is the necessity for the businesses to overcome the increasing challenges in the competitive environment. Adapting to the changing environment in not easy at all. Changes in the business operations can create a stressful impact on the employees of the organization, they will find it difficult to adjust to the new business activity and this will eventually impact their overall business performance and their commitment to the organization. The paper concludes about that the age factor is the concern when it comes to taking into account the good change management approach if not properly managed. Change should be implicated carefully both at individual job level and unit level of the organization so that the organizational change can have a minimum impact on the people.

THOMAS F. GATTIKER, DALE L. GOODHUE (2005) –

In this research paper entitled as “What Happens After ERP Implementation: Understanding the Impact of Interdependence and Differentiation on Plant-Level Outcomes” the authors would like to state about the impact of the ERP model on the overall organizational performance and business operations. It will be much better for the organization when the two important sub-unit level element interdependence is low and differentiation element is high as because ERP systems includes the involvement of data and integrating the business process of the organization. The ERP implementation is executed and adopted in well-organized manner can mostly show positive impact on the organizational level and the two elements interdependence and differentiation both affect the level of the gain obtain from the data and process integration.

TRIEU THI VAN HAU, DR JOZE KUZIC (2010) –

In this research paper titled as “Change Management strategies for the successful implementation of Enterprise Resource Planning Systems” the author wants to convey that with the rapidly rising technology in business operations it provides the business various benefits which are helpful to the management to operate their business efficiently and yield as many profits. One such solution that the information technology offers is ERP (Enterprise Resource Planning) solutions which is a multi-module software package consisting of various modules that unifies the entire business activities from the initial stage to the final stage such as the after-sales service stage. This entirely integrated system through which the information flows can automate the business processes thus improving the quality, efficiency, accuracy, and cost reduction. So as to yield maximum benefits from the ERP system proper ERP implementation is necessary. According to some of the case studies reviewed the paper concludes some commonly identified change management strategic components which should be properly addressed for the successful ERP software system implementation in any organization. Top management backing, effectual communication, experienced employees, proper well-structured plans, effective training, and knowledge transfer.

AHMED A. ELRAGAL, AYMAN M. AL-SERAFI (2011) –

In this research paper titled as “The Effect of ERP System Implementation on Business Performance: An Exploratory Case-Study” the author wants to signify that the implementation of ERP (Enterprise Resource Planning) software system is very much usual in today’s business organization. The benefits achieved from implementing the ERP solution is not clearly known but it seen that it does affect the ultimate business performance of the organization. ERP vendors for selling their software solution do exaggerate about the gain obtain from executing ERP such as fast return on investment and providing rapid solutions for business decision making. The significant relationship of the ERP on the business operational performance cannot be estimated on the basis of the financial profit gain by the organization. The impact of ERP can only be understood by focusing on the qualitative approach that is by considering the operational and intangible gains. Operational effectiveness, information, communication, operational efficiency is some of the intangible business performance factors on the basis of which the benefits can be estimated after adopting the ERP software solution.

HAMIDREZA VAKILIFARD, SHAHLA ABBASZADEH MEINAGH, MOHAMMAD REZA KHATAEE (2013) –

In this research paper titled as “Evaluating the Effects of ERP Systems on Performance and Management Accounting in Organizations” the authors want to state that with the IT (information technology) spreading widely the use of IT system have also increased. ERP system an automated business software management system integrates the various departments and provides information in real time provides that helps the top management to make complex decision very quickly and in an easier manner. Subsequently after implementing the ERP system its impact can be assess through the changing management practices, organizational performance, and on accountants and management accounting as advanced management accounting techniques are also introduced once the execution of ERP system was found to be successful. As a consequence of implementing this ERP system technology some of the problems associated with generating budgets of the organization where eliminated and more up-to-date information was available to the employees of the organization.

SAMWEL MATENDE, PATRICK OGAO (2013) –

In this research paper entitled as “Enterprise Resource Planning (ERP) System Implementation: A case for User participation” the authors describe about the information system (IS) such as the ERP (Enterprise Resource Planning) software system which deals with automating and integrating the business process through the interaction between technology and people. Different researches which are being conducted are mostly about the successful adoption of ERP in an organization, its critical success factors, and the factors through which success can be measure so that it may not lead to opposition from the users of the system ranging from the top-level management to the low-level management. The implementation of the complex IT based system which involves huge amount of expenditure to be spend, organizational commitment, and lengthy periods are the obstacles or the challenges which should be backup by user participation that is by the employees of the organization are necessary for the successful development of the ERP information system. Thus, any information system cannot be executed successfully if users are not ready to accept the changes is the system.

GOEUN SEO (2013) –

In this research paper titled as “Challenges in Implementing Enterprise Resource Planning (ERP) system in Large Organizations: Similarities and Differences Between Corporate and University Environment” the author wants to convey about the obstacles the organizations have to face while implementing ERP in between the corporate and university environment and to assess the required the critical success factor and risk factors while executing ERP software system. The legacy support system which was replaced ERP for the betterment and improvement of the management and the administration are primarily evolved from the manufacturing and planning system to integrating other system such as the finance, production, human resource, planning, supply chain management, and sales force automation. Some of the challenges assess from the study are failure to get user support, lack of senior manager commitment, failure to redesign business process, insufficient training of end-users, ineffective communication with users, conflicts between user departments, and attempts to build bridges to legacy applications.

KHALED ALMGREN, CRISTIAN BACH (2014) –

In this research paper entitled as “ERP Systems and their Effects on Organizations: A Proposed Scheme for ERP Success” the authors would like to describe about the effect the ERP (Enterprise Resource Planning) software information system on the organization’s financial position, business process, and their overall business performance. Basic computer system which was conventionally used to manage the business data, information, and its activities were later replaced by the ERP solution which was firstly introduced in 1990s but back then this was only provided the feature of the back-office system, then later the modern ERP came into more highlight in the business world due to the problem of Y2K. The modern ERP then included the not only the core business processes, back-office but also the activities of the organizations which involved the customers as well. The paper stated that about the success scheme and the effects of ERP system on the managerial and operational level. The success scheme (SS) which was suggested in this paper consisted of eight phases which are consultation team phase, team plan, announcement, involvement, business process mapping, implementation, tracking, and evaluation phase.

RICHARD KAPUPU, MURIEL MIGNERAT (2015) –

In this research paper titled as “Change Management Strategies in ERP Implementations” the author wants to state that the implementation of ERP (Enterprise Resource Planning) software system is not consider successful unless it is accepted by the people of the organization. The ERP system which integrates business activities and presents accurate and effective data in real time across the functional departments of the organizations often encounters resistance from the internal employees. As employees are left with fear that this automated technology-based system can make them lose their jobs, some are concern about the change that this system will bring in their work, and some worry about that there will be no control over the information so to avoid this change management and its strategies should be adopted and not neglected due to budget and time constraint. Thus, in order to make sure that the problems consider while implementing ERP system can be checked by matching it with the Aladwani’s model of think-feel-do framework.

JIAHUI MO (2015) –

In this research paper entitled as “The Organizational Change Dilemma of ERP Implementation in a Small Manufacturing Company” the author wants to describe that change is a necessity for each and every business if they want to thrive and survive in the rapidly changing pace of the business environment. Computer system being used traditionally had made the work a little bit easier for the businesses but there was a communication-based problem as the system worked as sperate systems and increased a lot work related pressure for the managers. Information technology (IT) has provided a solution to integrate this various functional departments into one single integrated system by implementing the ERP software system solution which not only integrated all the sub-systems but provides real time and accurate information by fetching from its common database making it easier for managers in decision making. But implementing an ERP solution is a very big challenge for every organization be it large organizations, medium size organizations, or small organizations. For small organizations it is even more difficult due to the shortage of funds and lack of talented and experienced individual thus making the implementation of the ERP solution resist able due to organizational changes.

VIJAY M KHAPARDE, DR. S M KHOT (2015) –

In this research paper entitled as “ERP: Implementation Procedures and Critical Barriers” the authors want to state about the how the implementation procedure to implement ERP the management information system (MIS) backbone of the information technology (IT) in an organization to unify the various departments at all which will share a common database through which accurate information is generated then being useful for making effective decision by the top-level management for the betterment and improvement of the organization. The main purpose of this research paper was to understand the execution procedure for implementing ERP software system solution and also to assess the critical barriers while implementing the same. There are five implementation steps which consist of project preparation phase, requirement gathering, business blue printing (print), realization phase, and go-live preparation or data migration. Lack of top management support, technological barrier, knowledge gap, general barrier, and change management barrier are some of the most crucial barriers that needs to consider.

MOTAB RAJA ALJOHANI (2016) –

In this research paper entitled as “Change Management” the author wants to state that how change management has to managed, implemented effectively by the HR human resource management department. Change is crucial for every organization to survive, to take a lead in the market. At times organization tend to adapt change management but fail to execute it practically. Change management seems to be successful when the people of the organization are satisfied with their work life quality and are readily agreed for any future changes. So, if the employees, job satisfaction, and productivity are connected or link together it can generate better effective results. Generally, change management factors is driven by an acknowledged leader but proper adaption and execution of it is to be done by the HR personnel. Communication, training, process re-designing, accurate change management programs are considered as applications for change management mechanism. Organizational change is a highly complicated process and has become a primary concern for the organization with the growing political and economic pressure. Understanding customers, technology, and improving communication are considered as the major factors to complete a successful organizational change whether in terms of cultural, strategic, political, and operational change.

DR. REVENIO C. JALAGAT (2016) –

In this research paper titled as “The Impact of Change and Change Management in Achieving Corporate Goals and Objectives: Organizational Perspective” the author would like to state about how leaders and managers should try to implement a change management model which help in achieving the corporate goals and objectives and how the internal and external factors if properly assessed can contribute to the positive consequences of change. Adapting change in the business is important because it is unavoidable and has to be consider for the existence of the company. Change management is a systematic well-structured approach that deals with transforming the management, employees, processes, structure due to the influence by the internal and external aspects such as the political, social, environmental, and economic. Lewin’s change model, McKinsey’s 7s model, Kotter’s 8 step model are some of the change management model mentioned in this paper which help organizations to grow dynamically for expansion or for competitive advantage purpose.

HAMZAH ALTAMONY, DR ALI TARHINI, DR ZAHRAN AL-SALTI, ALA’A HAMDI GHARAIBEH, DR TARIQ ELYAS (2016) –

In this research paper entitled as “The Relationship between Change Management Strategy and Successful Enterprise Resource Planning (ERP) Implementations: A Theoretical Perspective” the authors would to draw the attention towards the successful change management strategy factors being measured in three phases preparing to change, implementation of change, and to measure the impact on the user. Evolution of the business is important to thrive between the competitors, to satisfy the customers changing needs, and for this the management has to be updated with the latest innovative technology to stand out in the business market. In the preparation stage of the change management factors the organizational culture and structure must be prepared to change which should influence the individuals of the organization. In implementation stage effective communication between end-to-end user, training and development programs must be applied. Lastly the measuring impact on the user stage feedback for the previous stages must be taken and accordingly mistakes should be modified to develop and the change management strategy.

KWANG O. PARK (2018) –

In this research paper entitled as “The Relationship between BPR Strategy and Change Management for the Sustainable Implementation of ERP: An Information Orientation Perspective” the author would like to convey about that even after implementing the ERP system it didn’t showed any positive outcome in terms of the financial performance it may be due to the resistance the ERP system faced for the organizational changes and so as to understand the impact of the relationship between the business process reengineering (BPR) strategy and change management (CM) on the performance of the ERP software system. Businesses in these days are inclined more towards the technology-based solution to improve their business performance and their financial performance as well but adapting the information technology solutions is not only complex but expensive and time consuming as well. So, the critical success change management factors should be properly addressed and executed.

ARROGAH ADADE-BOAFO (2018) –

In this research paper entitled as “Successful Strategies for Implementing an Enterprise Resource Planning System” the author wants to state that since the existence and implementation of ERP in the organizations the its success rate has not been that much due to the lack of the understanding about the other support factors which basically contribute to its successful impact on the organizations performance in terms of the financial gains, and better improvement in the automation of the business process. Success stories are very less than compared to the drastic failure cases of the ERP affecting the business operations, its performance, stakeholders, the working system, and the organizations people. On the basis of some significant case studies and data analysis some successful strategies were identified for the implementation of the business software solution. So, to overcome the organizational inefficiencies the top-level management leaders should acquire to integrate the organizational, environmental, and technical factors.

WOUROUD ELFARMAWI (2019) –

In this research paper titled as “Challenges Affecting the Implementation of Enterprise Resource Planning (ERP)” the author signifies about how using ERP system in large, mid-size, and small organizations helps it achieving a sustainable competitive advantage and its positive impact on profit and productivity which makes it a market leader. Every business enterprise needs some sort of system so as to support its business processes. ERP does that it acts as a backbone for the entire business as it unifies the business activities such as production, logistics, accounting, human resource and provides an accurate a timely information through its information system which thus helps the top-level management in taking effective decisions. Only when an organization can address and solve its internal organizational issues and challenges and keep up with the changing trend of technology then only an ERP system can benefit the organization directly in terms of profit and productivity.

HUONG DOAN, HIEN NGUYEN (2020) –

In this research paper entitled as “Driving Change Management strategy in ERP implementation project” the authors would like to talk about the approach towards change management as how it could transform the information system, operational processes, and people of the organization for the successful adoption of the ERP implementation project. With the exponential growth in the digital evolution the amount of data that is getting generated each day is huge which is being useful in planning a busines strategy, taking a complex decision beneficial for the company. Accordingly, the management of the vast and complicated data is important which can be done by the business process software solution ERP which not only manages the data but makes sure it is flowing properly between the whole enterprise by integrating the various departments at all levels. The factors which influence the change management process are namely well-planned communication, a perfect implementation plan, resistance to change, and readily getting agreed for the ERP implementation project. If all the approaches, concept, components, and change management models if carefully evaluated can make this complex and expensive change management process easily adaptable for the people.

SARA ALMUHAYFITH, HANI SHAITI (2020) –

In this research paper entitled as “The Impact of Enterprise Resource Planning on Business Performance: With the Discussion on Its Relationship with Open Innovation” the authors would like to signify about the impact of ERP (Enterprise Resource Planning) system on the business performance of the small and medium enterprises (SMEs) which are having a crucial role in the economic development of the country and have made the business environment more competitive. The paper basic purpose was to understand the effect of ERP usage on the financial and non-financial performance of the small and medium enterprises (SMEs) and also to address the primarily put up to the effective and successful use of an ERP software system. The usage of the system is considered to be a successful when the user that is an employee of the organization thoroughly understands the business management software system and don’t resist the changes happening in the work process, culture of the organization.

3.CHANGE MANAGEMENT STRATEGY AND ITS IMPLICATIONS

3.1 INTRODUCTION TO CHANGE MANAGEMENT:

Change is always inevitable it helps the person to keep moving forward and to become better professionals and to improve personalities for the betterment, yet change is less likely to arise from its own sake. It always doesn’t necessarily mean that something needs to be alter, modify it can be implied by making either important difference often which will be amounting to a loss of the original identity or a substitution of one thing for another.

Change is a procedure or a necessity that something we have to believe in that is to evolve is to change. So, as to evolve it is necessary to step beyond fear and take action towards positive change. The act of becoming different can give at times a negative feedback as well if it the process and its importance is not consider. It is required to keep in mind that when to comes to change implementation isn’t the end its just the beginning.

Change management (CM) is the discipline which is defined as the methods and manners in which the organization describes and implements change to its external and internal processes. It is a collective approach which involves understanding why the change is needed, then preparing and supporting employees, taking the necessary steps for implementing change, and have to monitor the pre- and post-change activities to make sure for the successful implementation.

Unlike people change is necessary in businesses as well, every organization for the improve and to thrive and survive in the competing market environment has to keeping changing it business processes and operations. For business change has to be deployed due to both the internal as well external environment. Change is difficult but effective change management ensures that people of the organization embrace change so that it can turn out beneficial to the organization.

The Change Management can be a simple process change or a vital change in the company strategy, policy, organization or culture change in its environment, structure, technology or people. It is a well-structured process that needs to be carried out thoroughly and smoothly so as the long-term benefits of the change are realized. Despite of the structure approach to change significant organizational change can be challenging because changes mostly fail due to human reasons that is the people resist to any kind of disturbance in their work routines, operations because it is mentally challenging for them to adapt to the changes quickly.

The concept of change management in an organization is divided into three major purposes which is either for development, transformation or transition. It thus transpires the thought and the flash of the insight to gain deep understandings about the inner and instinctive nature of change. So, for successful organizational changes it is important to provide guidance to prepare, support and help individuals and teams. It occurs at three levels starting from the individual change management, then organizational change management, and then across the enterprise change management.

3.1.1 TYPES OF CHANGE:

The complexity which is involve in implementing change management in an organization business process and operations is a complex process which can be successfully implemented by the managers, executive leaders, and frontline employees if they work in consonance. So, to deploy these change management there are many different approaches from different perspectives such as from the perspective of individual and organization perspective.

As stated by Henry Mintberg in an enterprise there are specific interval of continuity in which the customary strategies remain unchanged and there are periods of change which are as follows:

  1. Incremental Change: It is the approach that programs and organizations develop frequently and in a gradual manner by making small alterations that is by changing components or activities as for the upgradation in existing technology, expansion of the existing market and many more.
  2. Piecemeal Change: This change is about making some changes in the strategies of change management while the others strategies remain unchanged for instance because of the growing competition the marketing strategy has to change while no changes are made in the functional or the operational strategies of the organization.
  3. Transformational Change: Adopting a completely new technology, change in the operations of the organization, diversification of the organization which is major change and is significantly different form the changes made in the past. This type of change almost takes place very rarely.
  4. Flux Change: For the expansion in the existing market when new products are added to the existing product line that is without any clear direction it is known as the period of flux such as it is not clearly decided.

As per mentioned by David Nadler and Michael Tushman a management professor the organizational changes can be of four types:

  1. Anticipatory Changes: This type of change is anticipated by the managers they continuously monitor the situation and whenever he expects the situation is going to change, he systematically plans with the intention of taking advantage of the expected situation so as the organization can earn maximum benefits.
  2. Reactive Changes: If changes are happening in the external environment so to cope up and for the survival of the organization the changes have to be made in the internal environment as well and sometimes reactive changes are also being made to explore new chances provided by the changing environment.
  3. Incremental Changes: An organization has various different sub-systems so to maintain the smooth functioning of the system they have to adjusted from time to time that is after some interval so that the system follows the selected or the chosen path or the way. So, these types of adjustment made to the systems every now and then is known as incremental changes.
  4. Strategic Changes: Change in the overall technology of the organization business process, changes made in respect to the location of the plant or diversification of organizational operations that is the changes which are being made to the overall size, shape, nature or direction of the organization, overall functioning of the organization is known as strategic change.

On an industrial level basis there are mainly two type of changes stated by Chaffey and Wood (2005) they are:

  1. Incremental Change: This type of change involves adjusting the small minor business-related issues and introducing new services or products in the existing product line so as to survive and to remain competitive in the market environment.
  2. Discontinuous Change: In this type of change significant changes are made in the business area which changes the base for the competition on a fundamental level.

Nadler et al (1995) made a model by combining these types of changes which was brought forward by the Chaffey and Wood (2005) that provides a tool to classify the different types of organizational change.

These model of Chaffey and Wood consists of four different type of change which can significantly transform the organization and will be make the change management completely effective. So, these two the last types of change can be seen as working differently at different level of challenges will can be the greatest within the discontinuous forms of change which can be seen in this classification model.

The two general goals of organizational change that is to maximize the adaptation possibilities of change management in relation to the environment and to transform the behavior models and the systems of values of the organizations members towards integration of the overall system can be carried out effectively by taking into consideration the types of organizational change which are as follows:

  1. Structural Organizational Change: These changes include changing the entire business operations, process or changing the structure of the management of the organization when mergers, acquisitions take place.
  2. Procedural Organizational Change: Changing manufacturing equipment or using a new CRM (Customer Relationship Management) system such as like the Salesforce, that is changing the internal workflows of how company makes a product or delivers services is known as procedural organization change.
  3. Cultural Organizational Change: This change is related to changing or modifying the employee’s behaviors, attitudes, and skills in the organization.

Depending upon this type of organizational change there is an organizational change matrix which examines all these types of changes for the scope and purpose of the organization. The matrix was reconciled from the Authenticity Consulting Major Types of Organizational Change such as by asking the questions like Company-wide or Subsystem, Transformational or incremental, Remedial or developmental, and Planned or Unplanned.

3.1. 2 MANAGING CHANGE:

In the large organizations which is spread across the globe there will be thousands of employees working for this multinational organizations so implementing change which is intensely personal can be very difficult. The company has to plan and employ such strategies that the leaders could translate them into the appropriate actions so as the leader can win the followers one by one for making the change management strategy successful.

Managing change is not like handling any other type of managerial task that can be solved by using some operational solution it is really a major concern for the managers and the leaders to manage the ongoing change management process which cannot be resolve by the applying the complex operational tactics.

It is like maintaining a proper balance between the people who are going to lead the change effort and those who are expected to implement the new strategies that is managing the organizational context in which change can occur, and managing the emotional connections of the people that is employees that are essential for any kind of transformation.

3.1.3 COMMITMENT TO ORGANIZATIONAL CHANGE:

According to Parish et al (2007) organizations are subject to change in this globally competing environment so as to improve the potential success to these changes and also to provide proper deep insights about the organizational change. How much the employees are loyal towards the organization and their work will ultimately influence the productivity and that perception of individual learning, improved performance and the implementation success influences the employee view of the change initiative.

It should be noted that the individual perspective point of view is very crucial for effective organizational change management as they will be wanted to present a positive picture of the organizational change context to customers and other external connections. Employees that understand the business long term strategic goals will be more likely to be committed to the change and thus will indirectly influence others perspective of the change this is something the leader should strive to be presenting for the change deployment which best suits the companies long term goals.

The two of the important key factors for effective organizational change are the openness and time to time communication between the top management and the employees at all the levels. Change should initially begin from the individual then transited to the team and ultimately the entire organization. So, for the change to happen at all levels it is important that there is significant association between the support of organizational change and quality relationships of managers with the employees. Thus, the managers, leader’s main objective is to create and imitate relationship commitment, trust and satisfaction among their staff and by doing this they have the chance of influencing the predilection towards change.

3.1.4 PERCEPTION OF CHANGE:

Change is inevitable but is not accepted easily by any individual that is it has face resistance of the people of change within an organization related to its processes, operations, and technology. Resistance to the change with the technology can be due to some reasons such as due the limited outlook and lack of understanding, threats to power and influence of managers, perception that costs of the new system will outweigh the benefits, fear of failure.

The dependency on personal inclination, the opposition that takes different forms so as to a new system this will include the main areas of:

  • Aggression: simply physical obstruction of the system or the intentional boundless data entries.
  • Projection: the workforce will criticize the system for their problems even if they are not related.
  • Avoidance: keeping away from the system and thus, avoiding the important data and reports generated by it instead of that using manual understudy for the actual system.
  • Criticism: actively uplifting voice about the concerns around the system.

The organizational change has to be viewed and perceived in different ways as it is firmly reliant upon the experience and references of those who going to participate in change so depending on their perspective change will get appreciated and accepted or resisted. If the change is more likely to base on their values or self-interest to the employees then the change is welcomed than in comparison of the other cases.

It is been determined that the people working at an SME’s (Small Medium Enterprises) are more often open to changes since these more often are subject to sub optimization. For understanding the conditions about how change can be perceived form the point of view of participants or stakeholders there are four distinct scenarios:

  1. Expedite
  2. Encourage and Empowe
  3. Reframe
  4. Revitalize of Retrench

Based on the understanding of the matrix some suggestions for different approaches for change managers to expedite implications can be concluded which are:

  • Expedited: when change manager will have a relatively clear understanding of the task the participants of the change will also view it as desirable and consider it inevitable and thus resistance will be minimal.
  • Encourage and Empower: any doubts regarding the change should be replaced with the focus on encouraging and motivate the participants so they will willing accept the change.
  • Reframe: the main focus should be on making the change more appealable by addressing the emotional state of the participants.
  • Revitalize or Retrench: the target should be changing the recipient’s perspective from unlikely and undesirable to transform the likelihood of change process and should try to bring in some positive supporter about the change.

3.1.5 EFFECTIVE CHANGE MANAGEMENT STRATEGIES:

According to Hayes (2007) the two common types of change strategies are the economic and the organizational development which are being tested and used over time. Economic strategy major focus is on generating the economic value by using the result oriented top-down action method within the organization. Whereas organizational development change strategy is little bit different from the economic strategy and the aim is to create the necessary capabilities to uphold the competitive advantage and high performance within the organization.

There are many different strategies and procedures that are can be used to change the environment which are based upon different speculation about human motivation and thus the willingness to engage in change at a specific point of time. These strategies rather than being intended to be incompatible can be used at different stage of a particular change process, and these strategies can only be effectively implemented when the environment is identified.

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The five different perspectives of change strategies are:

  1. Normative-Re-Educative Strategy: This method This approach believes that changing the norms, attitudes and values of individuals will lead to changes in their behaviors. It is based upon core beliefs, values and attitudes. So, change will occur as individuals change their attitudes and this leads them to want to behave differently. People are social beings and will adhere to cultural norms and values. Change is based on redefining and reinterpreting existing norms and values, and developing commitments to new ones.
  2. Rational-Empirical Strategy: This strategy is based on persuasion, and assumes that individuals are rational and as such they will follow their own self-interest once this is made clear to them. The benefits of a change therefore need to be highlighted and sold to the individuals as being of personal benefit to them. People are rational and will follow their self-interest once it is revealed to them. Change is based on the communication of information and the proffering of incentives.
  3. 3. Power-Coercive Strategy: This strategy is based on the application of power, with the belief that most people are compliant to those who have greater power. A potential issue with this process is that once the power is removed, individuals may revert to previous behaviors. People are basically compliant and will generally do what they are told or can be made to do. Change is based on the exercise of authority and the imposition of sanctions.
  4. Action-Centered Strategy: This focuses on the actions which include problem solving, looking at problems and focusing on remedial actions.
  5. Environmental – Adaptive Strategy: People oppose loss and disruption but they adapt readily to new circumstances. Change is based on building a new organization and gradually transferring people from the old one to the new one.
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Change Management in Nestle: Implementation of ERP System. (2023, March 20). GradesFixer. Retrieved April 13, 2024, from https://gradesfixer.com/free-essay-examples/change-management-in-nestle-implementation-of-erp-system/
“Change Management in Nestle: Implementation of ERP System.” GradesFixer, 20 Mar. 2023, gradesfixer.com/free-essay-examples/change-management-in-nestle-implementation-of-erp-system/
Change Management in Nestle: Implementation of ERP System. [online]. Available at: <https://gradesfixer.com/free-essay-examples/change-management-in-nestle-implementation-of-erp-system/> [Accessed 13 Apr. 2024].
Change Management in Nestle: Implementation of ERP System [Internet]. GradesFixer. 2023 Mar 20 [cited 2024 Apr 13]. Available from: https://gradesfixer.com/free-essay-examples/change-management-in-nestle-implementation-of-erp-system/
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