How to influence Change Readiness for organizational cultural change 2011

(1)

2011

D.G.J. Mestebeld [S1830368] Masters’ thesis

Business Administration,

Specialization Change Management 08/05/2011

(2)

D .G .J. M est eb el d : H o w t o in flu en ce Cha n ge Rea d in ess fo r o rgan iz at io n al cu lt u ral ch an ge . 2

How to influence Change Readiness for

organizational cultural change

Examining the influence of communication quantity

& quality, intrinsic & extrinsic motivation, and commitment to change.

By

DANIEL MESTEBELD

S1830368

University of Groningen, Faculty of Economics and Business

Masters‟ thesis, MSc Business Administration, Change Management 16th May, 2011 Supervisors University Dr. K.S. Prins Dr. J. Rupert (Co-Assessor) Initiator P. Milchem

National Customer Service Manager HOYA Lens Australia

76 Old South Head Road 2022 Bondi Junction, Sydney,

(3)

How to influence Change Readiness for

organizational cultural change

Examining the influence of communication quantity

& quality, intrinsic & extrinsic motivation, and commitment to change.

ABSTRACT

This exploratory research focuses on how change readiness of employees can be influenced in the process of an organizational cultural change. Using an Organizational Culture Assessment Instrument it became possible to identify the current and desired cultures which were used to give advice regarding the change strategy. Furthermore, three sub questions were conducted using a literature research, which were later on researched using in-depth interviews. Concluding one could argue that communication quantity and quality, intrinsic motivation and commitment to change all have a positive influence in an organizational cultural change process. This research adds to literature that extrinsic motivation does not have to have a positive influence on change readiness. Individual targets with a reward can increase a persons‟ stress level and thus their change readiness level. Extrinsic motivation can be used when focusing on team incentives, helping to create team ownership and enthusiasm, and thus positively influence change readiness. This research furthermore implies that it is important to adjust changes within organizations towards their specific organizational culture.

KEY WORDS

(4)

Preface and acknowledgements

I guess the writing of a Masters‟ thesis is like a journey, for both the writer and the reader. As a student I took the adventure and challenge of doing my research abroad, in a country I have always dreamed of: Australia. Whilst I still had my doubts stepping for the first „real‟ time in a plane, I soon found out that it was all worth it. My adventure was bigger than I could have ever dreamt of, in both a positive and a negative way.

By my second week I had already spent a week in the office in Queensland. I slept in a hotel and worked side by side with the National Managers. It also gave me the opportunity to see how Change Management goes in real life, since unfortunately employees had to be laid off. Later on I travelled, at my own expense, to the offices in Victoria and West Australia, conducting the interviews for this research. Of course, as in every trip happens, I also had some downsides with the four operations I had to have in Sydney. I will never forget the trouble I had, and the pain I felt, but most importantly the lessons of life I learned there. Clichés are true; the small things can really make the difference.

There are quite a few people who made a difference for me and which I now would like to thank. First of all I would like to thank Karin Prins, because without here it was not possible for me to do this adventure. She stuck her neck out for me, especially at the start of my Masters‟ thesis, for which I am really grateful. A colleague at HOYA which I am especially grateful to is Natasha Windsor. She gave me the opportunity to travel to Perth, showed me the office and the Perth City together with her husband Todd. Furthermore I would also like to thank Paul Milchem, for giving me the opportunity and trust to conduct my research. Last, but not least I would like to thank all my other colleagues at HOYA for their valuable time, and input in my research.

As a final note, I would like to thank my family and friends. Thanks to their support and especially their trust in my own capabilities I made it this far. From the office, to the hospital, towards my backpack adventure that I did. The journey does not stop with the completion of this thesis!

Thus, as they say in here: Cheers mate!

Daniël Mestebeld

(5)

1| Introduction

7

1.1| Initial motive 7

1.2 | Problem analysis: HOYA Lens Australia (HLA) 8

1.3 | Organizational Culture 9

1.4 | Measuring organizational culture in HLA‟CS 11

1.4.1| Organizational Culture Assessment Instrument (OCAI) 11

1.4.2| Results measuring culture within HLA‟CS 12

1.5 | Research question 15

2| Theory

16

2.1 | Change readiness 16

2.2 | Communication quantity and quality 18

2.3 | Intrinsic and extrinsic motivation 19

2.4 | Commitment to change 20

2.5 | Concluding: conceptual model 22

3| Methodology

23

3.1 | Data collection: in-depth interviews 23

3.1.1| Operationalization from theoretical framework 23

3.2 | Data analysis: in-depth interviews 26

4| Results

28

4.1 | Change readiness in HLA‟CS 28

4.2 | Communication quantity and quality and change readiness 31 4.3 | Intrinsic and extrinsic motivation and change readiness 33

4.4 | Commitment to change and change readiness 35

(6)

5| Discussion

37

5.1| Conclusion 37

5.2| Implications for HLA‟CS 40

5.2.1| Change readiness in HLA‟CS for their organizational cultural change 40

5.2.2| Closing the gap in the cultural change process 41

5.3| Discussion 43

5.4| Limitations and further research 44

6| Literature

46 Appendices

51

(7)

Love it or hate it, but one cannot deny the influence that organizational culture has in organizational theory. Famous models like the Competing Values Framework of Quinn & Rohrbaugh (1983) and Handy‟s (1979) four types of culture have all shown their importance and provided ways to measure and compare organizational cultures. These models make it possible to identify strong and weak aspects of an organizational culture, identifying the gap between a current and desired culture. They give valuable insights into the implementation of a change process, although unfortunately organizations (too) often make the mistake to move too fast into the implementation phase of a change. When organizations are moving before there is change readiness, i.e. before an individual or group is ready for the change, they are increasing the chance of inefficiency and thus high costs, or even the fail of a whole change project (Jones, Jimmieson, and Griffiths, 2005).

This research will focus on the influence of change readiness within an organizational cultural change, thereby focussing on three variables: communication (quantity and quality), motivation (intrinsic and extrinsic) and commitment (to change). A special characteristic in this research is the large physical distance in between locations where the cultural change has to be done; an Australian company wants to change their culture in five locations (e.g. the distance between Sydney and Perth is almost 4000km and time difference is 3hours). Nonetheless the researcher conducted interviews on three locations, doing an exploratory research on the influence of the three variables on the change readiness in an organizational cultural change.

1.1| Initial motive

Losing business from competitors forced HOYA Lens Australia‟s Customer Service (HLA‟CS) to make redundancies. Trying to change times, National Management (of Customer Service) is currently implementing a different set of changes, e.g. metrics systems, a new Customer Relationship Management system (CRM system), Standard Operating

(8)

D .G .J. M est eb el d : H o w t o in flu en ce Cha n ge Rea d in ess fo r o rgan iz at io n al cu lt u ral ch an ge . 8 Procedures (SOP‟s), and training days to name but a few. National Management desires from local Team Managers to work more on customer service, which explains the new systems. The training days focus on explaining how these new systems can help employees improving their way of working and thinking about customer service, setting new norms and values unique for HLA‟CS. It requires adapting their organizational culture, since organizational culture can be defined as: ”a particular set of values, beliefs, customs and systems that are

unique to an organization” (Burnes, 2009: 169).

Unfortunately there is a specific setback explaining the initial motive. National Management struggles with implementing the changes; employees fall back to their old habits and go back to their old routine within a couple of days. This raised the question from National Management whether there is sufficient change readiness among employees. A specific aspect in this change process is the large distance between locations, making face-to-face contact between all participants on a regular basis impossible due to time and cost constraints and thus makes the change even more challenging. Summarized this change raised two areas of interest by National Management: 1) whether there is a problem in the change readiness for their organizational cultural change and 2) how this process can positively be influenced. Hence, the management question used was:

To what extent is there a problem in the change readiness for HLA’CS’ organizational cultural change, and how can this process be positively influenced?

In the following section more information about HLA will be provided, followed by information regarding organizational culture in general. Furthermore this chapter will provide information about measuring organizational culture and the types of culture measured within HLA‟CS. Finally, this chapter will conclude with a research question, providing input for the next chapter regarding scientific theory about change readiness in an organizational cultural change.

1.2| Problem analysis: HOYA Lens Australia (HLA)

(9)

D .G .J. M est eb el d : H o w t o in flu en ce Cha n ge Rea d in ess fo r o rgan iz at io n al cu lt u ral ch an ge . 9 nowadays have 29,000 employees in establishments in 29 countries in Europe, America, Asia and Australia. This research focuses specially on the site of HOYA Lens in Australia (HLA), which has locations in all five states: Western Australia, South Australia, New South Wales, Victoria, and Queensland. HLA focuses on the manufacturing and supplying of ophthalmic lenses to opticians throughout the country, whereas the 52 employees of HLA‟CS take care of the order inquiries and solve all kinds of customer service problems. Five of them are Team Managers on the locations, two are National Managers and thus the remaining 45 employees are Team Members (i.e. all other employees than management).

As mentioned before, National Management has difficulties changing the current organizational culture, using their unique systems as their CRM system and SOP‟s to adapt the norms and values of employees and seen as necessary conditions considering the lost in business. To increase the chance for a successful change it is essential to examine the culture of the organization and its capabilities related to the change (Jones, Jimmieson, and Griffiths, 2005). As explained, this examination helps to identify strong and weak aspects of an organizational culture, giving valuable insights in the change process. But, before going in depth regarding the organizational culture of HLA‟CS it is first important to focus on three aspects of organizational culture: 1) what it is, 2) the functions it provides, and 3) whether it is changeable. This will provide the theoretical explanation necessary for understanding the method used, and will help interpreting results from the examination of the organizational culture within HLA‟CS.

1.3 |Organizational Culture

Whereas the earlier mentioned definition of Burnes‟ (2009) of organizational culture also places emphasize on systems in organizations, others like Cummings & Huse (1989) state that culture consists of four major elements like basic assumptions, values, norms and artefacts (“observable manifestations of other levels of cultural elements”). Other scientists like Eldrige and Crombie (1974: 89) emphasize the importance of the individual in their definition: “Culture is a unique configuration of norms, values, beliefs, ways of behaving and

so on, that characterize the manner in which groups and individuals combine to get things done.” Comparing these three definitions it becomes clear that there are two aspects that all

(10)

D .G .J. M est eb el d : H o w t o in flu en ce Cha n ge Rea d in ess fo r o rgan iz at io n al cu lt u ral ch an ge . 10 unique configuration characterizing behavior within an organization. Albeit these three definitions are closely related, Burnes‟ definition is arguably most suitable when expanded with the term „norms‟; as explained will HLA‟CS start using their CRM system and SOP‟s which will influence their norms. Furthermore the definition of Burnes acknowledges the influence that systems can have in an organization, as happening within HLA‟CS. Hence, the

used definition for organizational culture in this research is: a particular set of norms or

values, beliefs, customs and systems that are unique to an organization.

Organizational culture is still a major topic of interest, explained by the important functions it

provides like relative patterns for problem solving and handling, and the reduction of

uncertainty in new situations (Keuning, 1998 and Marglin & Marglin, 1990). Another function of organizational culture is that it can be seen as a prime mover in organizations, even more influential than structure, strategy or politics (Deal and Kennedy, 1982). Although a strong and cohesive organizational culture can reduce uncertainty, the downside is that it can make organizations resistant to certain types of change (Schein, 1985). These functions of organizational culture explain the need to know what type of culture is present in an organization before changing. An organizations‟ culture provides relatively fixed patterns for problem solving and handling, influencing the changes within HLA‟CS in using their systems.

One can imagine that within HLA‟CS these patterns of handling and problem solving have a lot of influence on the experienced level of customer service, although the question remains whether this organizational culture is changeable by management. It is a debate still going strong in scientific literature, although researchers do agree that organizational culture

changes. But as Meek (1988: 470) argues it “(...) should be regarded as something an

organization „is‟, not something is „has‟: it is not an independent variable nor can it be created, discovered or destroyed by the whims of management.” Hence, organizational

(11)

D .G .J. M est eb el d : H o w t o in flu en ce Cha n ge Rea d in ess fo r o rgan iz at io n al cu lt u ral ch an ge . 11 conclude that organizational culture is changeable but one should be careful in trying to achieve this top-down in a short amount of time.

Now considering that organizational culture is defined, its potential functions are explained, and that organizational culture is changeable, focus should be placed on how to measure organizational culture. The next section will provide insights about how to measure organizational culture using an Organizational Culture Assessment Instrument (OCAI), whereas the second part will provide information about the results of measuring the current and desired organizational culture within HLA‟CS.

1.4 | Measuring organizational culture in HLA’CS

One can imagine that it is impossible to include every relevant factor in diagnosing and assessing organizational culture, but a framework with an empirical foundation certainly can help narrow down the right focus. Examples of such frameworks are from scientist like Deal & Kennedy (1982), Quinn & McGrath (1985), Handy (1986) and Cameron & Quinn (2006). In this research the Organizational Culture Assessment Instrument (OCAI) of Cameron & Quinn (2006) is used since it is proven to be a valid and reliable instrument for measuring organizational culture (Choi, Martin and Park, 2008). In the next section this OCAI will be explained, whereas later on in this chapter the results of the OCAI will be examined.

1.4.1| Organizational Culture Assessment Instrument (OCAI)

(12)

D .G .J. M est eb el d : H o w t o in flu en ce Cha n ge Rea d in ess fo r o rgan iz at io n al cu lt u ral ch an ge . 12 The Competing Values Framework encompasses two dimensions which embody the essential characteristics of the four culture types. Whereas the dimension on the left represents an organization focusing primarily internally, i.e. within the organization, the right represents a more outside focusing organization; i.e. towards suppliers, customers and the external environment. The other dimension of the framework represents stability versus flexibility. Management has control at the lower end of the axis, whereas at the upper end employees are empowered to decide for themselves. Using the framework and its four different culture types making it possible to distinct the dominant current and desired organizational culture within HLA‟CS, which will be the focus of the next section.

1.4.2| Results culture measurement within HLA’CS

This section will briefly discuss the most important results gathered by measuring the culture within HLA‟CS, using the Competing Values Framework. Readers who like to have more information regarding results or methodology used are referred to appendix two: “OCAI

Methodology and results”, whereas in appendix one:”Survey Questions (OCAI)” the original

OCAI questions can be read. As one can see in table one, there was a total response rate of 67%, and results were categorized in three groups of respondents: National Management, Team Management and Team Members. Furthermore can one see the lower response on the location in Queensland, which can be explained by difficulties on the location (like a Team Manager who was recently fired). Although the standard deviation was quite high (12.3 as total average) the results show an interesting aspect within the company. It shows that especially the values and beliefs differ quite a lot among Team Managers and Team Members

(13)

D .G .J. M est eb el d : H o w t o in flu en ce Cha n ge Rea d in ess fo r o rgan iz at io n al cu lt u ral ch an ge . 13 within the organization, probably causing confusion about the direction that should be headed, and thus not contributing towards the cultural change.

The most important aspect about the current culture is that on a total average, as shown in table two, the Clan culture is dominant(30.1), with influences of a Hierarchy culture (28.5). The most important difference is that Team Managers are the only group who currently experience the Market culture as dominant (31.5), which is a culture focusing on productivity and characterized by a competitive organization. That Team Managers experience the Market culture as dominant can be the effect of the recent implementation of the metrics system by National Management.

Analyzing the results of the desired culture reveals that the current dominant culture is the same as the desired one; the Clan culture (33.6). National Management and Team Members in general give quite the same score for the values of a desired culture, whereas Team Management has a different view regarding the desired culture within HLA‟CS; they value the Clan culture higher and Hierarchy lower. One could argue that Team Management thinks that HLA‟CS should emphasize more on the values of a Clan culture to be successful, implying that they value flexibility and the family type organization. They also place less value on the formalized and structured way of working of a Hierarchy culture, which is quite remarkable keeping the recent changes by National Management in mind; these changes fit the Hierarchy culture (e.g. the metrics systems, CRM system and SOP‟s).

Table 1: General information regarding the OCAI survey held in HLA‟CS.

Population (N ) 52 Response 67% Respondents (n ) 35 Working years (Average) 5,2

National Management 2 Working years 7 Team Management 4 (St. Deviation)

Team members 29

Working locations Response Population of location Percentage

South Australia 5 5 100% Victoria 8 9 89% West Australia 4 7 57% New South Wales 10 11 91% Queensland 8 20 40%

(14)

D .G .J. M est eb el d : H o w t o in flu en ce Cha n ge Rea d in ess fo r o rgan iz at io n al cu lt u ral ch an ge . 14 Thus, the results of the OCAI make it possible to highlight the differences between the current and desired culture of HLA‟CS and make conclusions. It helps to give a change related advice on how National Management can use the culture specific within HLA‟CS for their culture changes. One of the conclusions is the gap between what Team Managers rate as important values for HLA‟CS to be successful, compared with National Management and Team Members. Team Managers have a different opinion about a desired culture within HLA‟CS; they rate the Hierarchy culture as less desired, whereas changes imposed by National Management focus also on a Hierarchy culture e.g. the CRM system and SOP‟s that help them to standardize and formalize. These differences in values and systems could explain problems National Managers currently face in the change process, but need to be researched more in depth before real conclusions can be made. Especially when taking into account that Team Managers had a high standard deviation of 18.1 (Clan culture) and 15.1 (Market culture), as one can read in Appendix two.

It provides an interesting starting point of this research for which the focus will be on the cultural changes implemented by National Management: the new metrics and CRM system, SOP‟s and training days. The question remains how National Management can use the current Clan culture, with influences of also a Hierarchy culture, in the organizational cultural change process, taking into account the influence of the large physical distances between all locations. Before going in depth into the research it becomes first necessary to clarify

Table 2: Current and Desired Culture scores (mean) within HLA‟CS, according to the results of the OCAI Survey. N= 35, of which 2 National Managers, 4 Team Managers, and 29 Team Members. Clan culture Adhocracy culture Market culture Hierarchy culture National Management 35.0 14.6 13.8 36.7 Team Management 25.6 19.0 31.5 24.0 Team Members 29.7 20.5 24.9 25.0 Total average 30.1 18.0 23.4 28.5

Total standard deviation 14.4 9.6 13.0 12.8

National Management 31.7 17.9 22.1 28.3

Team Management 39.0 20.8 20.8 19.4

Team Members 30.1 20.5 21.3 28.2

Total average 33.6 19.7 21.4 25.3

Total standard deviation 15.3 10.0 11.9 11.2

(15)

D .G .J. M est eb el d : H o w t o in flu en ce Cha n ge Rea d in ess fo r o rgan iz at io n al cu lt u ral ch an ge . 15 definitions and provide more detailed information about change readiness, in a theoretical framework. Before this specific framework can be given it is first necessary to give the research question.

1.5 | Research question

In the previous parts, as mentioned, the influence and meaning of organizational culture is explained, whereas with the use of the OCAI the current and desired culture within HLA‟CS is explained. As mentioned earlier, the management question in this research has two aspects: 1) to what extent exists a problem regarding the readiness for change within HLA‟CS, and 2) how this readiness for change can be influenced. To provide a solid foundation it is first essential to conduct an analysis of scientific theory, providing answers and suggestions regarding organizational characteristics which positively can influence change readiness in a cultural change in organizations. Hence, the research question became:

Which organizational characteristics influence the change readiness of employees in the process of an organizational cultural change?

(16)

D .G .J. M est eb el d : H o w t o in flu en ce Cha n ge Rea d in ess fo r o rgan iz at io n al cu lt u ral ch an ge . 16 Reading the previous chapter, one can conclude that culture is changeable, although the conditions are tough; it takes a long time, it is not sure whether it is successful and there is no real road map for management. But, how can change readiness in an organizational culture be influenced, say for example within HLA‟CS dominant Clan culture? That is the focus of this chapter. The first part will focus on defining change readiness, whereas later on variables will be discussed which according to scientific literature can influence change readiness for an organizational cultural change. Each section will end with a conclusion and sub question. Later on the next chapter, Methodology, will go in-depth about the methods used in this thesis, followed by the Results and Discussion chapter.

2.1 | Change readiness

According to Armenakis, Harris, & Mossholder (1993:681), change readiness is“(...) reflected

in organizational members‟ beliefs, attitudes, and intensions regarding the extent to which changes are needed and the organization‟s capacity to successfully make changes.” It can be

seen as a continuum; on one end there is resistance to change and on the other end readiness for change” (Elving, 2005). Or, as Lewin (1951) called it, change readiness is a process of „unfreezing‟. It involves creating the right conditions for change to occur, otherwise employees are resisting the change and are in a „frozen‟ mindset, keeping their old values and beliefs and thus not changing their organizational culture.

In addition to Armenakis, Harris, & Mossholder‟s (1993) definition, Piderit (2000) states that past research have conceptualized change readiness in three ways: a) as a behavioural state, b) cognitive state, and c) emotion state. The behavioural state as a first element, regards intensions or actions in response towards the change, i.e. complaining or convincing others about the usefulness of the change. Second element, the cognitive state, is about what one thinks about the change, i.e. if the change is necessary or whether it will be beneficial. The final and third element of change readiness is the emotion state, which concerns feelings about the change, e.g. anxious or enthusiastic feelings.

(17)

D .G .J. M est eb el d : H o w t o in flu en ce Cha n ge Rea d in ess fo r o rgan iz at io n al cu lt u ral ch an ge . 17 Employees should have individual commitment regarding the need for organizational change, making changes within HLA‟ CS more effective than without these positive views (Elving, 2005, Foster, 2010, and Jones, Jimmieson & Griffiths, 2005). Gilley, Dixon, & Gilley (2008: 153) argue that these views from employees can be influenced using

communication and motivation in change projects “since a leader‟s ability to implement

effectively a change is influenced strongly through the abilities to communicate and motivate others.” National Management from HLA‟CS can increase the change readiness within their

culture when they communicate a clear vision and motivate others to act on this vision (Kotter, 1995), since employees within a Clan culture are driven though a vision (Cameron and Quinn, 2006). Employees get educated, inspired, and influenced by their leader. The question always remains whether leaders „walk the talk‟ i.e. set an example by their actions, which can be particular difficult to demonstrate from distance. Hence, following literature can one conclude that change readiness thus is influenced by communication, motivation and commitment to change.

Acknowledging that the three variables communication, motivation and commitment to

change can influence the change readiness in an organizational cultural change (Foster, 2010,

Gilley, Dixon, & Gilley, 2008, Elving, 2005 and Fenton-O‟Creevy, Gooderham, & Nordhaug, 2005), the reason to research these three specific variables was due to the organizational characteristics. Using the results of the OCAI it became clear that HLA´CS mainly has a Clan culture. A characteristic of a Clan culture is that drivers in the change process are communication and commitment to change (Cameron & Quinn, 2006). Motivation was included in the research since it has a close relation with commitment. Whereas commitment has relatively long-term implications for an employee, motivation has more short-term implications for behavior making it interesting to research them both together instead of just only commitment to change (Latham, 2007). Special about the change situation in this research was that the changes were conducted on five different geographical locations, which have large distances between them (some more than 4000km), for which one can imagine that particularly communication is an interesting and influential variable to research.

(18)

D .G .J. M est eb el d : H o w t o in flu en ce Cha n ge Rea d in ess fo r o rgan iz at io n al cu lt u ral ch an ge . 18 motivation, followed by the third variable commitment to change. This chapter will conclude with a conceptual model used in this research.

2.2 | Communication quantity and quality

Communication can be seen as one of the most important factors in changing an organizational culture, since it is essential to inform employees about the nature of a change process in order to modify behaviour (Elving, 2005 and Elving & Bennebroek Gravenhorst, 2005). The quantity of communication is about the amount of information sharing; memos, reports, one-to-one discussions, and presentations towards groups, and is seen as a powerful moderator in employee motivation and morale (Kotter & Schlessinger, 2008 and Loftin & Moosbruker, 1982), showing a relation between communication and motivation. High communication quality, i.e. providing complete information, on the other hand can help to prevent misunderstandings and let people see the urgency of the change, thereby decreasing uncertainty of employees, one of the functions of organizational culture (Kanter & Seggerman, 1986 and Yemm, 2007). Palmer (2009) adds that high communication quality helps to establish trust in managers and create change readiness of employees in change innovations.

Hence, both the quantity and quality of communication have two aspects: 1) sharing information, which can be seen as the primary communication purpose, and 2) the creation of perspectives on the reality, e.g. a change project, in an interactive process (Elving & Bennebroek, Gravenhorst, 2005). Sharing information is important to assign people to tasks, and in a changing organization information has to be given regarding the cultural change. Although the importance of this first aspect of communication, information sharing, it is certainly not that employees affected by the change have all information they require, whether they are management or employees (Kotter & Schlessinger, 2008). The best method to share this required information is through face-to-face contact, although this is a very time consuming method (Larkin & Larkin, 2005), and almost impossible when distances are large between locations like within HLA‟CS.

(19)

D .G .J. M est eb el d : H o w t o in flu en ce Cha n ge Rea d in ess fo r o rgan iz at io n al cu lt u ral ch an ge . 19 this also influences employees‟ motivation, letting them see the urgency of the change, showing a relation between communication and motivation. For both aspects of communication it looks like that they are positively influencing change readiness of employees. Thus, before moving on, the first sub question regarding communication will be given:

Q1: To what extent do high communication quantity and quality positively influence change readiness towards an organizational cultural change?

2.3 |Intrinsic and extrinsic motivation

Derived from the Latin „movere‟, which means „to move‟, employee motivation gets more and more attention from researchers, whereas emphasize is placed that motivation must be seen in a temporarily organizational context (Fenton-O‟Creevy et al., 2005). Motivation is defined by Robbins (1996: 212) as: “the willingness to exert high levels of effort towards

organizational goals, conditioned by the effort‟s ability to satisfy some individual need.” It

results from the drive to satisfy needs that remained to that point unsatisfied, and an organization can design effective and efficient incentives towards it to influence change readiness (Fenton-O‟Creevy et al, 2005). Furthermore, as explained in the previous paragraph, communication quantity can help to influence employee motivation. According to Meyer, Becker and Vandenberghe (2004), goal setting is at the heart of a motivation process, whether goals are assigned by others or self-generated. In a Clan culture like that of HLA‟ CS goals are normally focused on teamwork, as it is one of the key elements of a Clan culture (Cameron and Quinn, 2006). Employees who are motivated have higher levels of change readiness according to a research of Narayan, Steele-Johnson, Delgado, and Cole (2007), which can be clarified using two types of distinctions which now both will be discussed: 1) intrinsic motivation and 2) extrinsic motivation (Ryan & Deci, 2000).

(20)

D .G .J. M est eb el d : H o w t o in flu en ce Cha n ge Rea d in ess fo r o rgan iz at io n al cu lt u ral ch an ge . 20 positively increase the change readiness. As said in the introduction, a function of culture is that it also increases or decreases the uncertainty for employees, which can influence the intrinsic motivation level and thereby also influencing the change readiness. Extrinsic motivation on the other hand is distributed by someone external, like a manager or an organization, and refers to doing something because it leads to a separable outcome (Osterloh & Frey, 2000). It motivates indirectly; the reward received is the source of the satisfaction, not the activity itself; i.e. when the reward is restrained the person will stop doing the activity. Examples of rewards are money or gifts. Thus, it seems to be that organizations can use extrinsic motivation to positively influence change readiness in cultural change through linking rewards towards organizational goals. Hence, the second sub question was:

Q2: To what extent does high intrinsic and extrinsic motivation positively influence the change readiness in organizational cultural change?

2.4 |Commitment to change

Although “motivation can have short-term implications for behavior, the binding nature of

commitment has relatively long-term implications for an employee” (Latham, 2007:91).

Commitment is seen as a powerful source of motivation, whereas both can be seen as distinguishable, although related, concepts (Meyer, Becker and Vandenberghe, 2004). When employees possess high motivation levels, they are also often highly committed to the organization, thereby acknowledging that motivation is a broader concept than commitment to change. Motivation theorists have focused more on explaining task performance, whereas commitment theorist have focused more on explaining employee retention or turnover. Thus, next to motivation will this research also focus on the more specific variable of commitment to change.

According to Herscovitch & Meyer (2002: 475), commitment to change refers to „a force

(mind-set) that binds an individual to a course of action deemed necessary for the successful implementation of a change initiative.” Many authors, as stated by Foster (2010),

(21)

D .G .J. M est eb el d : H o w t o in flu en ce Cha n ge Rea d in ess fo r o rgan iz at io n al cu lt u ral ch an ge . 21 promote changes, because they have power over resources or information, or because others look for leadership.

There are different views about classifications regarding the level of commitment to change. One view is from Beckhard & Harris (1987), who argue that although a critical mass is needed, the level of commitment may vary in three kinds: 1) „let it happen‟, i.e. not obstructing the change, 2)‟help it happen‟, i.e. participate in the change process or 3) „make it

happen‟, i.e. drive the change. Herscovitch & Meyer (2002) on the other hand state that

commitment to change is made up of three different kinds of levels: 1) affective commitment to change, 2) continuance commitment to change, and 3) normative commitment to change. This first aspect of commitment, affective commitment to change, is a desire to provide support for the change based on a belief in its inherent benefits. The second aspect, continuance commitment to change, “(...) is a recognition that there are costs associated with

failure to provide support for the change”, whereas the third aspect, normative commitment

to change, “(...) is a sense of obligation to provide support for the change.” (Foster, 2010: 9). What both classification acknowledge is that changing a person‟s commitment level is difficult; especially to develop capabilities and commitment necessary for improvement (Burnes, 2009).

One can conclude, when comparing the three levels of commitment of Beckhard & Harris (1987) with the ones of Herscovitch & Meyer (2002), that the view of Herscovitch & Meyer is more positive towards commitment. All three aspects, ranging from affective to normative commitment, imply that there is always an amount of readiness for change whether that is through beliefs in inherent benefits or through a sense of obligation. The view of Beckhard & Harris on the other hand also makes a distinction of employees, who not obstruct the change, nor do they really participate in the change; they just let the change happen. Beckhard & Harris classification is clearer that there can also be a low level of commitment within an organizational culture change process, as claimed by National Management of HLA‟CS is the situation. Although this is a negative aspect for the change readiness in a project, it is certainly a more realistic situation regarding change projects. Thus, it looks like that commitment to change has an influence in the change readiness regarding an organizational cultural change, bringing us to the third sub question:

(22)

2.5 | Concluding: conceptual model

One could draw a conceptual model as shown in figure two, taking all three variables together (communication quantity and quality, intrinsic and extrinsic motivation, and commitment to change). The conceptual model will help to explain the influence of the three variables on change readiness towards an organizational cultural change. Next to commitment to change, as one can see in the model, I expect that the variables communication (quantity and quality) and motivation (intrinsic and extrinsic) influence each other in the process of change readiness towards organizational cultural change (Kotter & Schlessinger, 2008 and Loftin & Moosbruker, 1982). Interviews were held in this explorative research to answer the sub questions, as will be described in the next chapter.

(23)

D .G .J. M est eb el d : H o w t o in flu en ce Cha n ge Rea d in ess fo r o rgan iz at io n al cu lt u ral ch an ge . 23 Focus of this chapter will be on the data collection and analysis of the interviews performed in HLA‟CS. As stated in the introduction, information regarding the methodology of the OCAI can be found in appendix two. Focus of this chapter will be on how data is collected and will give a general overview regarding the respondents, whereas the second part will focus on the analysis of the collected data.

3.1 |Data collection: In-depth interviews

The researcher worked for five months within the company and worked at four out of five different locations throughout Australia to get a grasp of the organizational culture, working environment and day to day business. Furthermore this created the opportunity to do in-depth, face-to-face interviews on three locations, for which three Team Managers (out of 4) and eight Team Members (out of 29) were chosen, since they both noticed the influence of the changes initiated by National Management. Interviewees were selected based on their general opinion regarding the changes going on, making sure that both opponents and resisters of the changes were interviewed. Interviews took approximately 45 minutes, were anonymous and semi-structured as one can read in appendix three; “Interview questions used in HLA‟CS”. Anonymity was guaranteed by making sure that specific detailed information could not be traced back to persons. An introduction was used to clarify the benefits for the interviewee and set boundaries. By using open and closed questions, both quantitative and qualitative, it became possible to compare the interviews in a consistent way. Another reason for the open questions is the exploratory character of this research.

3.1.1| Operationalization from theoretical framework

The interview questions used were derived from the theoretical framework and this section will focus on this operationalization process, i.e. how were questions from the theoretical framework operationalized to interview questions. A full display of sources from each

(24)

Table 3: Sources of the operationalization from the theoretical framework.

question is displayed in table three: Sources of the operationalization from the theoretical

framework.

The first two questions in the interviews had a general purpose: interviewees‟ were asked for their age and working years within the company. This made it possible to compare the results of the group of interviewees with the group of the OCAI and see whether they differ. The next four questions, till question six, were regarding change readiness. In the theory chapter it is argued that change readiness consists of three states: 1) the cognitive, 2) behavioural, and 3) emotional state of change readiness. Thus, for example, the cognitive state of change readiness (whether employees see the changes as beneficial) is operationalized in question four: “Do you think that these changes within CS are necessary or that they will be

beneficial? Why? Can you give examples?” Furthermore is the behavioral state focus of

question five, whereas the emotional state is the focus of question six.

After the interviews were held it became clear that the seventh question regarding “factors

(25)

D .G .J. M est eb el d : H o w t o in flu en ce Cha n ge Rea d in ess fo r o rgan iz at io n al cu lt u ral ch an ge . 25 vague and difficult to answer. Respondents‟ answers were totally different and the researcher had to clarify this question too much, causing probably prejudices.

Question eight till nine were based on the research of Gilley, Dixon, & Gilley (2008) and Kotter (1995), and focused on some aspects of change readiness, communication and motivation. It was focusing on whether their manager was giving inspiration by supporting them, if they „walk the talk‟ and clearly communicated about aspects that needed to change, since this can influence change readiness of employees. Question ten was also based on the research of Gilley, Dixon, & Gilley (2008), but excluded from the research since results regarding leadership skills were so close related to the variables communication and motivation that they became indistinguishable and could better be merged.

Questions nine, ten and twelve were also the first questions using a five point Likert scale asking the respondents to value the particular question. The scale was used twice at every variable, thus also in questions twelve and thirteen for example. Reason for choosing the Likert scale is that it is a helpful measurement scale to compare answers in experiments or changes; the scales help to compare answers producing interval data (Blumberg, Cooper and Schindler, 2008). When choosing a four point Likert scale it can be that respondents feel forced to choose an answer which they do not want to, since there is no possibility for them to give a neutral answer (Van de Walle, 2006).

The next three questions, from eleven till thirteen were based on the variable communication specifically. As argued before in the theoretical framework, communication can be quantitative and qualitative. Therefore question eleven was focusing on the quantitative aspect of communication, or in more detail: the different mediums that can be used. Question twelve on the other hand focused on the quality of the communication, asking the interviewee whether he or she is getting all information required and whether improvements can be made. Furthermore this question focused on which extent communication has an influence on the trustworthiness of a manager, as was argued earlier in the theory section. The last question regarding communication, question thirteen, questioned the relation between communication and change readiness following the theoretical framework.

(26)

D .G .J. M est eb el d : H o w t o in flu en ce Cha n ge Rea d in ess fo r o rgan iz at io n al cu lt u ral ch an ge . 26 Question fourteen was therefore focusing on the intrinsic part of motivation, asking interviewees whether they find their work interesting and or enjoyable as these are characteristics of intrinsic motivation. Extrinsic motivation was the focus of question fifteen, which was asking interviewees whether they think that rewards are linked to targets following the definition of extrinsic motivation as stated in the theoretical framework. The last question regarding motivation was focusing on the relation between motivation and change readiness, again following the theoretical framework.

Commitment to change was the focus of the last three questions, starting with question seventeen. This question was asking the interviewee to describe actions of their team in a change, and whether there is a certain mind-set binding them to a course of action, as this is the definition of commitment to change of Herscovitch & Meyer (2002). Furthermore the rating scale of the definition of Beckhard & Harris (1987) was used in the interview: “let it happen”, “help it happen” or “make it happen”, as explained in the theoretical framework. Furthermore did Beckhard & Harris argue that a critical mass is needed to provide energy for a change to occur, which is operationalized in question eighteen as: “Do you think that there

is a group of people who can provide the energy for a change to occur? “. The last question,

nineteen, was also derived from the theoretical framework and questioned the relation between commitment to change and change readiness. This brings us to the next paragraph, explaining how the data of the interviews is analyzed.

3.2 |Data analysis in-depth interviews

(27)

Table 4: General information regarding the interviews held within HLA‟CS.

In table four can one find a general overview regarding the interviewees, from which one can see that the three locations were almost equally represented regarding the number of interviewees. Comparing the results of the OCAI survey with the interviews it becomes clear that the average working years is slightly higher in the interviews (2.7 years), also seen in the higher standard deviation from the interviews. When the interviews were done it became also possible to compare the answers of the three different locations, to see whether there are location specific differences. It could be concluded that the answers revealed no significant differences between the locations, thereby also taking into account the amount of contact with other teams, team size and working methods. Results from the interviews were divided in two groups, Team Managers and Team Members, giving interesting insights.

Focus of the interviews was on the variables of the sub questions: change readiness, communication quantity and quality, intrinsic and extrinsic motivation, and commitment to change. This provided insights regarding the current level of change readiness, and the influence the variables could possibly have on change readiness. The results of the interviews can be read in the next chapter, which will provide an overview of the results gathered from the interviews, focusing on the current situation within HLA‟CS and the potential influence of the variables on the change readiness in an organizational cultural change.

52 29,2

11 8,2

- Team members 8 7,9

- Team management 3 9,2

Interviewees Population of location % of location

New South Wales 3 11 27%

South Australia 0 5 0%

Victoria 4 9 44%

4 ₇ 57%

Queensland 0 20 0%

General information interviews

(28)

D .G .J. M est eb el d : H o w t o in flu en ce Cha n ge Rea d in ess fo r o rgan iz at io n al cu lt u ral ch an ge . 28 This chapter will describe and summarize the results of the interviews held within HLA‟CS. Using these results an overview can be given of the potential influence of the three variables (communication quantity and quality, intrinsic and extrinsic motivation, and commitment to change) on the change readiness in an organizational cultural change. Since this is an exploratory research the answers of all interviewees are described and hence results are not summarized in a table. A table would force the researcher to generalize answers of interviewees loosing valuable information.

The next and fifth chapter will provide an answer on the research question, answering the three sub questions, and provide implications for the National Management of HLA‟CS. Moreover will the last chapter give the limitations and an overview of what kind of insights this research has given.

4.1 | Change readiness in HLA’CS

This first part will focus on the experience that both Team Management and Team Members have had regarding the organizational cultural change; do they feel that the changes are structured and what is their general opinion about changes going on? Furthermore, following the theoretical framework, this part will also focus on the three aspects of which change readiness is composed of: 1) the cognitive, 2) behavioural, and 3) emotional state of change readiness.

Eight of the interviewees‟ expressed that changes going on are not very structured, although they can definitely see an improvement in the structure of changes. As one of the Team Members said: “The difference with the other National Managers is massively”. Improvement regarding the structure of changes is possible, in for example the implementation of the CRM system or the SOP‟s. The CRM system „Just popped-up‟ as one of the interviewees said, whereas on the other hand one of the Team Managers said that the process of the SOP‟s could be improved since changes keep going on without really keeping everybody informed. This

(29)

D .G .J. M est eb el d : H o w t o in flu en ce Cha n ge Rea d in ess fo r o rgan iz at io n al cu lt u ral ch an ge . 29 does not motivate to teach Team Members the new working methods, since they do not know whether the SOP‟s is already outdated or not. Thus the particular set of systems and values of the culture stay the same, thereby not changing the organizational culture.

Furthermore, looking specifically at the components of change readiness gave some interesting insights. As said before change readiness is composed of three aspects. The first aspect is the cognitive state of change readiness: see employees the changes as beneficial? All Team Members and Team Management interviewed said that they believe that the changes going on are beneficially in the long term, but acknowledge having difficulties in the transition period. Examples regarding the organizational culture were given from the specific systems like the CRM system, SOP‟s and detailed, location depend changes that were made. Thus, the belief was there that the new implemented systems were beneficiary, although it would help if the benefits were more emphasized and explained before the change was implemented. SOP‟s for example help to make uniformity so that the different locations can help each other without a problem, but this is something that employees found out when the SOP‟s were already implemented. Overall can one conclude that the advantage of the new elements of the organizational culture, i.e. the new standardized systems like the CRM and SOP‟s, was positive. This also acknowledged the influence of the cognitive state of change readiness, although improvements can be made.

The second aspect of change readiness is about the actions in teams in response to change; the

behavioural state. Interesting to notice was that all interviewees claimed that their team had

(30)

D .G .J. M est eb el d : H o w t o in flu en ce Cha n ge Rea d in ess fo r o rgan iz at io n al cu lt u ral ch an ge . 30 The third aspect of change readiness is regarding the feelings in teams in response to change, caused by the changes in organizational culture, or also referred to as the emotional state of

change readiness. There is “concern in which direction the business is going. Some people

are nervous since there are so many redundancies recently.” What helps in this uncertain

period is that there is high loyalty as said by a Team Manager: “HLA‟CS is like a family and

you do not leave your family”, which corresponds with the Clan culture found. One can

conclude that a shared value, as part of the organizational culture, is that employees give the changes a chance, although some think this is difficult. This also depends on the information that is shared and their own values.

Concluding can one argue from the described results that the change readiness level for the organizational culture is certainly not low and improvements are made, although there are still some aspects which could use improvement. Table five „Overview of the rating scales

regarding the presents of variables within HLA‟CS‟ provides an overview regarding the

results of the rating scales used in the interviews. They were used to focus on two aspects of each variable: 1) to what extent the variable was present within HLA‟CS and 2) the influence of the variable on the change readiness in the cultural change according to the interviewees. As one can see the variation is relatively low between the interviewees, from which one can conclude that there is consistency between respondents. The level of commitment has the highest variation, meaning that employees differ most in their opinion about the current commitment level within HLA‟CS. Furthermore can one conclude that the influence of all variables on the change readiness is very positive in a cultural change according to the interviewees.

(31)

Mean Stand. Dev. Mean Stand. Dev.

Communication (quant. & qualit.) 3,7 0,5 4,9 0,3

Motivation (intrin. &extrin.) 3,7 0,6 4,4 0,6

Commitment to change 3,8 1,0 4,8 0,4

Presents within HLA'CS

Influence on change readiness in cult. change

4.2 | Communication quantity and quality and change

readiness

This second section will focus on the results of the influence of communication on change readiness in the cultural change of HLA‟CS, thereby focusing on first the influence of quantity and later on the quality of communication. In general interviewees say they get the information needed, rating communication with a 3.7 out 5, but there is room for improvements in the amount of communication quantity and quality.

Regarding the quantity of communication within HLA‟CS can one conclude that almost all types of mediums are used to share information between the teams: e-mail, fax, face-to-face, telephone and nowadays their new CRM system. The choice of the medium depends on the time available, the importance of the message and the number of people who have to receive the message. Seven interviewees argued that the communication with other states is good and fast and in which the new implemented CRM system helps to set different norms of the culture about communication and help establishing trust, e.g. one should trust that a peer will do a follow-up for a posted message on the CRM system. Employees between states have to work as a team all together to get their job done, reinforcing the existing Clan culture. Another aspect mentioned by all interviewees is the difficulty caused by distances between locations; they think that the bond between locations and teams will be improved if they had more face-to-face contact. Also time differences between states make communication sometimes difficult, but this is an aspect which is inevitable as recognized by interviewees. One thing that could be improved according to both Team Members (six) and Team

(32)

D .G .J. M est eb el d : H o w t o in flu en ce Cha n ge Rea d in ess fo r o rgan iz at io n al cu lt u ral ch an ge . 32 Management (three) is that they like to hear more often from National Management, like for example about changes going on. One Team Member even mentioned to look for a new job, insecure of the future within HLA‟CS with all redundancies going on. Moreover, four interviewees argued that they missed the benefits of the change in the explanation by National Management, thereby also making comments about the minimum frequency of communication. For them it felt like a lack of support, thereby negatively influencing their view regarding the change and thus negatively influencing their change readiness. A positive aspect mentioned was that National Management is willing to look at feedback regarding changes; they are willing to have a closer look at changes and willing to try something else, thereby positively motivating employees. This influences especially the emotional state of change readiness, since it influences positively the feelings of employees.

Furthermore all eleven interviewees found team huddles useful to promote collaboration between each other, since they can help to give a direction towards the change. An improvement would be to increase the frequency of the team huddles as argued by seven interviewees. Team huddles also help to promote teamwork, giving the option to discuss items regarding norms and values, thereby reinforcing the Clan culture. Four interviewees also argued that they would like to have more information regarding the company‟s decisions in general and also information regarding the redundancies. They felt insecure about their position within the company, thereby negatively influencing the emotional state of change readiness.

Improvement in the quality of communication should focus, according to five interviewees, on the benefits of a change and thus the cognitive state of change readiness. It would help if these benefits were more clarified beforehand. With the implementation of the new CRM system a lot of things were unclear; people did not know about the change and why it was useful. As one employee said: “Now it is not a very efficient and effective system because half

of the people know how it works and a lot of mistakes are still made. This causes more work and confusion and people just go their way with it”, of which one can conclude that the new

(33)

D .G .J. M est eb el d : H o w t o in flu en ce Cha n ge Rea d in ess fo r o rgan iz at io n al cu lt u ral ch an ge . 33 there is no follow up but this could help answer remaining questions and set the focus again, thereby increasing the chance to change their views positively regarding the desired cultural change. Another aspect that could be improved is the communication between all Team Managers, as mentioned by four Team Members, although improvements were made. An example of an improvement is the use of “one on one‟s” between Team Managers and individual Team Members, in which their manager coached them giving feedback. It helps them both to talk about aspects that need to change and emphasize the norms and values as part of the organizational culture.

To sum, the influence of communication was rated high; namely as very influential (a score of 4.9 out 5). The quantity of communication can influence the change readiness, since employees like to have information regarding changes going on, and why they are necessary; otherwise they can feel a lack of support and become frustrated. This frustration can be developed since changes in the culture can sometimes be a big effort and is putting extra pressure on employees. Change readiness can be increased using communication quality, especially when a contact person will focus on the communication regarding the changes: do a follow up, setting a focus and answer questions. It helps to emphasize the new desired norms and values of the desired culture.

4.3 | Intrinsic and extrinsic motivation and change

readiness

This third section will describe the level of intrinsic and extrinsic motivation level within HLA‟CS and focuses on the influence these two types of motivation can have on change readiness in an organizational cultural change, according to the interviewees.

(34)

D .G .J. M est eb el d : H o w t o in flu en ce Cha n ge Rea d in ess fo r o rgan iz at io n al cu lt u ral ch an ge . 34 the culture, demanding extra effort from them and also increasing the uncertainty in their job. Furthermore three interviewees argued that they liked small talk as a part of their work. They liked to share things of themselves, a characteristic of the Clan culture, and argued that the little things made the work in the office enjoyable. For the change readiness of Team Members it helps that they can share difficult problems in which all try to find solutions, although there is no real culture of providing customer excellence in service according to four Team Members: “Everybody does what they have to do but that is it.” Their Team Manager is giving support and inspires to act, thereby creating positive views regarding the change and thus positively influencing change readiness. Examples given ranged from the implementation of the SOP‟s to time-management difficulties which were solved with the support of their manager. Five interviewees also stated that feedback and explaining the benefits, thus focusing on the cognitive level of change readiness, could help in the change process.

Whereas it looks like the intrinsic motivational level is on an appropriate level, the extrinsic

level is slightly different. There is no real consensus whether rewards are linked with targets

(35)

D .G .J. M est eb el d : H o w t o in flu en ce Cha n ge Rea d in ess fo r o rgan iz at io n al cu lt u ral ch an ge . 35 happy of a change, whereas other feel more down because of their nature, influencing their intrinsic motivation level.

To conclude, the importance of motivation within an organizational cultural change is rated as influential, with a score of 4.4 out 5. Without motivation people would stay in their old habits and motivation is needed to change the organizational culture, e.g. learn to work with new systems like the CRM. One can conclude from this that the intrinsic motivation level certainly is acknowledged as important, but the results regarding the extrinsic motivation level are more neutral. Whereas four interviewees like to have targets and think that this will have a positively influence on the change readiness level, not all like the setting of targets since it can cause too much stress. Thus, results indicate that the influence of intrinsic motivation is more powerful than the influence of extrinsic motivation.

4.4 | Commitment to change and change readiness

This last and third section will explain the potential influence commitment to change has on change readiness according to the interviewees, and also describe the level of commitment to change present in HLA‟CS.

The level of commitment to change, following the scale of Beckhard & Harris (1987) as stated in the theoretical framework, is described as “participating”, but not really “driving” the cultural change and is acknowledged as not having changed the last two years. Employees are not really “driving” the change because they are not willing to set the extra mile, giving the current commitment level to change a score of 3.8 out 5. An explanation for this commitment level was given since the normal day-to-day business also continues and has priority above the other changes, as said by three interviewees. Moreover they argued that there are employees who “(...) stand up for the change, especially when it is their part of the

job that is changed”. One could see this kind of employees as the critical mass for the cultural