2015-2016
Miranda Dusselaar
Supervisor ESD-SIC is J. Demmink
Supervisor RuG is N. Szirbick
Co-assessor NUBS is J. Dong
A Roadmap to achieve an effective Data-Based Approach
Relations between Organizational and Industry Characteristics
and
Roadmap to achieve an effective Data-Based Approach (DBA)
Relation between the Organizational and Industry Characteristics and Resistance to Change Master Thesis By Miranda Dusselaar
ABSTRACT
Master’ thesis
A Roadmap to follow to achieve an effective Data-Based Approach (DBA): Relation between the Organizational and Industry Characteristics and Resistance to Change
Written by:
Miranda Dusselaar Hoofdweg 120 8383EK Nijensleek
Word count: 16.134 words
DD-MSc. Technology and Operations Management Supervisor and assessor: Dr. N.B. Szirbik
Co-assessor: Dr. J. Dong
Universities
University of Groningen, Faculty of Economics and Business Nettelbosje 2, 9747AE Groningen
Student number: S2759411 Course code: EBM028A30 Newcastle University Business School
5 Barrack Road, Newcastle upon Tyne, NE1 4SE Student number: B5063588
Course Code: NBS8399
Company ESD-SIC
ACKNOWLEDGEMENTS
During this research several people helped me to achieve this final result. First I want to thank my first supervisor, Dr. N.B. Szirbick. Nick guided me through the process of writing a thesis, and always gave me very useful feedback. Also my second supervisor/co-accessor, Dr. J. Dong, helped me with improving my research.
I want to thank the case company, who provided me with all the information I needed. I want to especially thank Joost Demmink for his guidance, and pointing out what are important aspects to think about.
TABLE OF CONTENT
ACKNOWLEDGEMENTS ... iii
TABLE OF CONTENT ...iv
LIST OF FIGURES ...vi
LIST OF TABLES ...vi
LIST OF ABBREVIATIONS ... vii
1 INTRODUCTION ... 1
2 THEORETICAL FRAMEWORK ... 3
2.1 Barrier types ... 3
2.2 Industry characteristics ... 5
2.3 Organizational characteristics ... 9
2.4 Reasoning for categorization of characteristics in Table 2.4 ... 13
2.5 Relevance ... 15
2.6 Research questions ... 16
3 METHODOLGY ... 17
3.1 Research design ... 17
3.2 The data collection methods used during the research ... 18
3.2.1 Literature research ... 18
3.2.2 Interviewing ... 18
3.2.3 Observations ... 19
3.2.4 Questionnaires ... 19
3.3 Data analysis method ... 21
3.4 Validity and reliability ... 24
4 CASE STUDY OUTCOMES ... 25
4.1 Heavy chemical industry characteristics (HCIC) ... 26
4.2 Organizational characteristics of ESD-SIC... 31
4.3 Relations between characteristics and SRC ... 35
4.3.1 Opinions of outside-experts group A ... 35
4.3.2 Opinions of inside-experts ... 38
4.3.3 Combination of inside and outside-experts group B opinions ... 41
4.4 Main findings ... 43
5.1 Interpretation of the characteristics of ESD-SIC ... 44
5.2 Interpretation of opinions of outside-experts group A ... 45
5.3 Interpretation of results about relations between the characteristics and SRC ... 46
5.4 Roadmap for ESD-SIC ... 46
5.4.1 Solutions to reduce or eliminate the SRC ... 48
5.4.2 Change Management models ... 55
5.4.3 Change management model for ESD-SIC ... 58
5.5 Limitations ... 60
5.6 Theoretical implications ... 60
5.7 Practical implications ... 62
5.8 Recommendations for future research ... 63
5.9 Relevance ... 63
6 CONCLUSION ... 63
7 REFERENCES ... 65
Appendix A – Comprehensive description of SRC ... 69
Appendix B - Interview questions related to industry characteristics ... 71
Heavy chemical industry characteristics (HCIC) ... 71
Basic conditions ... 72
Appendix C - Interview questions related to organizational characteristics ... 73
Appendix D – Interview protocol ... 74
Introductory protocol ... 74
Introduction ... 74
Interviewee background ... 74
Interview questions ... 74
Demographics... 74
Appendix E - Organogram ESD-SIC ... 75
Appendix F – Production of SiC ... 77
Appendix G – Formula Herfindahl-Hirschman Concentration index ... 78
Appendix H – Overlap between organizational and industry characteristics ... 79
Appendix I – Likert scale for the organisational characteristics and the rate for ESD-SIC ... 80
Appendix J – Occurrence of SRC per characteristic for other companies ... 82
Appendix K – One page Strategic Plan example ... 83
Appendix M – Figure of a Furnace ... 85
LIST OF FIGURES
FIGURE 2.1-RELATIONSHIPS OF MARKET STRUCTURE, OBTAINED FROM LIPCZYNSKI AND WILSON (2004) ... 6FIGURE 3.1-RESEARCH DESIGN WITH DELIVERABLES AND METHODS ... 17
FIGURE 4.1-FOUR TYPES OF HIERARCHICAL CULTURE ... 32
FIGURE 4.2-RESPONDENTS PER CATEGORY ... 36
FIGURE 5.1-PYRAMID OF DECISION ... 50
FIGURE 5.2-DECISIONS PER HIERARCHY... 51
FIGURE 5.3-CONE OF EXPERIENCE... 53
FIGURE 5.4-LEARNING LOOPS ... 54
FIGURE 5.5-FOUR ELEMENTS OF A LEARNING COMPANY ... 54
FIGURE 5.6-ROGER’S TECHNOLOGY ADOPTION CURVE ... 56
FIGURE 5.7-KÜBLER-ROSS’CHANGE CURVE ... 57
FIGURE 5.8-THE ADKARMODEL ... 57
FIGURE 5.9-CHANGE MANAGEMENT MODEL FOR ESD-SIC ... 58
FIGURE E.1–ORGANOGRAM ESD-SIC ... 75
FIGURE M.0.1–OVERVIEW OF A FURNACE ... 85
FIGURE M.0.2–PICTURE OF A FURNACE ... 85
LIST OF TABLES
TABLE 2.1-LIST OF SRC OF DEL VAL AND FUENTES (2003) ... 5TABLE 2.2-RELATION BETWEEN BEHAVIOUR OF A CHARACTERISTIC AND MARKET STRUCTURE (LIPCZYNSKI &WILSON,2004) ... 8
TABLE 2.4-EXTENDED ORGANIZATIONAL CHARACTERISTICS, CATEGORIZED ACCORDING TO KO, ET AL.(2007) ... 13
TABLE 3.1-GROUP A: SURVEY OUTSIDE-PARTICIPANT CHARACTERISTICS ... 20
TABLE 3.2-CODING TREE: CATEGORIZE ALL THE OBSERVATIONS, COMMENTS, STATEMENTS ABOUT THE ORGANIZATIONAL CHARACTERISTICS ... 23
TABLE 3.3-QUALITY CRITERIA OF THE RESEARCH ... 25
TABLE 4.1-BASIC CONDITIONS OF ESD-SIC ... 27
TABLE 4.2-INDUSTRY CHARACTERISTICS ... 30
TABLE 4.4-ORGANIZATIONAL CHARACTERISTICS OF ESD-SIC ... 34
TABLE 4.5-MEANS PER RELATION BETWEEN FIRM CHARACTERISTICS AND SRC ... 37
TABLE 4.6-MEANS PER RELATION BETWEEN PRODUCT CHARACTERISTICS AND SRC ... 38
TABLE 4.7-MEANS PER RELATION BETWEEN CEOCHARACTERISTICS AND SRC ... 38
TABLE 4.8-FACTOR AND RELIABILITY ANALYSIS ... 39
TABLE 4.9-PRESENCE OF SRC AT ESD-SIC ... 40
TABLE 4.10-STATISTICAL SIGNIFICANT CORRELATIONS ... 42
TABLE 5.1-SRC CATEGORIES AND CHARACTERISTICS OF ESD-SIC ... 47
TABLE 5.2-SRC EXPERIENCED AT ESD-SIC AND KEYWORD SOLUTIONS ... 49
TABLE 5.3-RELATIONS BETWEEN CHARACTERISTICS AND SRC CATEGORIES ... 62
TABLE A.0.1-DESCRIPTIONS OF THE SRC ... 69
TABLE F.0.1-AMOUNT OF PRODUCTION OF SIC PER COUNTRY ... 77
TABLE G.0.1-CALCULATION OF H-H INDEX FOR ESD-SIC ... 78
TABLE H.0.1-OVERLAP BETWEEN INDUSTRY AND ORGANIZATIONAL CHARACTERISTICS ... 79
TABLE I.0.1-RATING OF THE ORGANISATIONAL CHARACTERISTICS OF ESD-SIC ... 80
LIST OF ABBREVIATIONS
HCIC Heavy Chemical Industry Characteristics HCI Heavy Chemical Industry
DBA Data-Based Approach
1 INTRODUCTION
ESD-SIC is a company in Delfzijl which produces silicon carbide (SiC) from the raw materials sand and petroleum coke. “Sand and coke are mixed in the correct proportions to create a reactive material. From this mix a material pile, i.e. a furnace, is built (about 3500 tons). In the centre of this furnace is a core of graphite, which serves as an electric conductor1. The furnace is covered with a plastic film to capture the gases forming during the production process, in order to desulphurise them and to reuse these gases for energy production. The energy produced is traded on the APX market. The graphite core is connected to a transformer and a voltage is applied. Due to the electric resistance of the graphite core the furnace reaches a temperature of about 2500°C. At this temperature the sand and coke decompose, and SiC is formed. In 2 to 20 days of time, depending on the size of the furnace and the transformer, the chemical reaction of silica and carbon is complete. Once the furnace cycle is completed, the result is a silicon carbide ingot consisting of 80 to 100 % SiC. The intense heating required for the furnace needs large amounts of electricity. The specific energy consumption amounts to 6.2 to 7.2 MWh per tonne 100% SiC produced (ESD-SIC, 2016).
The purity of the SiC decreases from the core of the ingot to the outer layers (König, 2011). This results in two kinds of SiC. Close to the graphite core high quality SiC is produced, called crystalline SiC. Further away from the graphite core a lower quality is created, called metallurgic SiC. The ratio of the two types of quality is 55% for crystalline SiC and 45% for the metallurgic SiC. SiC is a substance which is used, among others, as a grating and grinding agent, as a heat-resistant material in applications including soot filters for diesel engines, and as an additive to cast iron (ESD-SIC, 2016). Crystalline SiC is an important material for the grinding agents industry because of its extreme hardness. SiC is also used for various technical ceramics and as fireproof material. All the SiC that does not meet the high quality standards can be downgraded to metallurgic SiC. However, the market for metallurgic SiC decreased over the years, and the profits of the crystalline SiC increased. Therefore ESD-SIC tries to maximize the production of crystalline SiC and minimize the production of metallurgic SiC.
ESD-SIC is globally one of the relevant production locations of SiC, as it produces 4% of the whole world-wide production. It is also considered to be the most energy-efficient environment friendly producer (ESD-SIC, 2016), and above this, cited as Best Referenced by the
EU environment grading agency (ESD-SIC, 2016). However, the costs related to environmental friendly producing are significant. This, in combination with the high electricity prices in the Netherlands caused that the overall productions costs increased.
On the basis of ESD-SICs visible commitment and the continuous improvement of its performance and communication in the areas of safety, health and environment, ESD-SIC has acquired the right to use the name and logo of the global Responsible Care program (ESD-SIC, 2016). ESD-SIC intends to keep focusing on the responsibility to prevent, minimize, or strictly control any harmful effects of their operations on the environment (ESD-SIC, 2016).
To maximize the crystalline SiC, reduce the production costs, and keep focusing on the responsibility to prevent, minimize or strictly control any harmful effects on the environment ESD-SIC established for itself the following objectives:
To increase the reliability of environmental installations by means of failure and downtime analyses and systematic maintenance;
To improve and optimise process management by means of better monitoring and advanced data analysis;
To increase personnel knowledge and commitment by means of training and education;
To improve energy efficiency;
To promote and increase openness and transparency towards the community about the harmful effects of the operations of ESD-SIC on the environment .
To improve and optimise process management ESD-SIC implemented new methods for data gathering, which resulted in a new data-based approach (DBA). The DBA includes that methods are used to make reliable measurements. Based on these measurements decisions will be made. The implementation of the methods for measurement was gradually spread over 15 years. It started with measuring the amount of “blowers”2 in the production process and gradually other methods were implemented. From 2011, data that was measured was also presented throughout the company to inform everyone within the company about the performance. In January, 2016, four new job functions were created to positively influence the
DBA. From January 2016 structured reports were used to find causes of problems, and it was discussed how these problems should be solved. Thus, from January 2016 ESD-SIC started to respond to the measured data. However, the overwhelmingly part of decisions were still made based on working experience and common sense reasoning, and not based on analysed and interpreted data. Head of Research and Process Development points out that it is important that the information within the company is synchronized between the data-analysists and the executive employees. The aforementioned is not the case, and the Head of Research and Process Development beliefs that the cause is that not all the employees within the company understand the importance of the DBA. The managers within ESD-SIC understand that the DBA influences the way of working of the production employees, and that it takes time to change. However, they feel that there is little progress, and want to know how to successfully carry out an effective DBA. Hence, the problem of ESD-SIC is that they do not know how to effectuate change management to execute an effective DBA. This research helps in understanding the resistances towards the DBA, and recommend what steps should be followed to reduce or eliminate the resistances.
Next, the theoretical framework will discuss types of barriers towards change, and what industry and organizational characteristics are. Based on the theoretical framework the research questions are created. Following, the methodology and the results of this research are discussed.
2 THEORETICAL FRAMEWORK
This section discusses barrier types towards change, and explains the importance of understanding these barrier types when making changes. Next, industry and organizational characteristics are discussed, where the focus is on how to ascertain the two types of characteristics. The section concludes with the relevance of this research and the research questions.
2.1 Barrier types
Post and Almant (1994) point out that there are two basic types of barriers to change related to sustainable developments: “Industry barriers which reflect the special and unique features of the business activity in which the firm engages; and organizational barriers that are not unique to environmental problems, but which affect a firm’s capacity to deal with any form of change, including environmental change.” (p.p. 67). Industry barrier constructs are technical information, capital costs, configuration of current operations, competitive pressures and industry regulations. The constructs that are concerned with organizational barriers are employee attitudes, poor communications, past practice, and inadequate top management leadership. Commonly, a company has to deal with a mixture of the two types of barriers (Post & Altman, 1994).
The research of Post and Almant (1994) focuses only on sustainable developments and the accompanying barriers, which is not related specifically to the DBA approach. However, this article is a good starting point for this research as indicates that there are two types barriers to change, which is related to the problem of ESD-SIC. Post and Alman (1994) defined the relation between the industry characteristics and sources of resistance to change (SRC) as industry barriers. The relation between the organizational characteristics and the SRC are defined as organizational barriers (Post and Alma, 1994). To provide ESD-SIC with a comprehensive roadmap, both characteristics have to be determined and their relations with SRC.
The DBA is a specific change and to our knowledge there is no literature found about the characteristics of a DBA. For this reason the DBA is seen as an organizational change, as organizational change occurs when a company makes a transition from its current state towards some desired future state (Argyris, 1993). The current state of ESD-SIC is without a DBA, and the desired future state is where ESD-SIC makes decisions based on a DBA.
Table 2.1 - List of SRC of Del Val and Fuentes (2003)
Category Sources of Resistance to Change (SRC)
Distorted perception, interpretation barriers and vague strategic priorities Myopia Denial Perpetuation of ideas Implicit assumptions Communication barriers Organizational silence Low motivation
Direct costs of change Cannibalization costs Cross subsidy comforts Past failures
Different interests among employees and management
Lack of creative response
Fast and complex environmental changes Resignation
Inadequate or lack of strategic vision
Political and cultural deadlocks
Implementation climate and relation between change values and organizational values
Departmental policies
Incommensurable beliefs i.e. disagreement about the real problem Deep rooted beliefs
Forgetfulness of the social dimensions of change
Other sources
Leadership inaction Embedded routines
Collective action problems i.e. dealing with free-riders Capabilities gap
Cynicism i.e. distrust
2.2 Industry characteristics
operates in a heavy chemical industry (HCI). To our knowledge literature did not provide any information about the heavy chemical industry characteristics HCIC. Therefore the characteristics of the HCI have to be determined to eventually identify the industry barriers of ESD-SIC. The upcoming section describes which characteristics have to be determined to get a comprehensive view of the HCI.
Bain (1958) points out that there is a link between the structure of a market, the conduct of firms in that market, and the performance of firms in that industry. With respect to performance, more concentrated industries (with a few larger firms) should show higher profits than those with lower concentrations (many smaller firms). Lipczynski and Wilson (2004) extended this idea by adding “basic conditions” of an industry. This resulted in “basic conditions” influencing the market structure, which affects firms conduct, which in turn affects performance (Figure 2.1).
Figure 2.1 -Fout! Verwijzingsbron niet gevonden. Relationships of market structure, obtained from Lipczynski and ilson (2004)
A market structure consists of individual structural elements (Shepherd, 1972), which can be seen as industry characteristics.
Several researchers pointed out different industry characteristics that are important to identify a market structure. Market share, leading-firm group, change in market share and entry barriers which includes firm size, advertising-intensity, and growth rate are industry
•Demand •Customer response of
demand prices, income and tastes
•Price elasticity of demand •Availability of substitutes •Supply •Use of technology •Availability of inputs •Cost of production Basic conditions •Internal: •Number and sizes of buyers
and sellers •External: •Patents and property rights •Economies of scale •Product differentiation
Market structure
•Pricing policies
•Attempts to create entry barriers
•Investment and mergers
Conduct
•Market level performance: •Economic efficiency (jobs and
pollution)
•Firm level performance: •Satisfaction of firm wiith
objectives
characteristics according to Shepherd (1972). Gordon (1991) points out that primarily research focused on industry characteristics concerned with financials, employment, and production (Dess and Beard, 1984; Kaufman, Hodson and Fligstein, 1981), but that the employment of technology, change in customer preference, and range of competitors products are also important characteristics.
Lipczynski and Wilson (2004) also pointed out several industry characteristics, which corresponds with the industry characteristics mentioned by Shepherd (1972) and Gordon (1991). Lipczynski and Wilson (2004) categorized the industry characteristics into two kind of aspects; internal aspects and external aspects. The internal aspects are the number and the sizes of the buyers and sellers which affects power. Power is the ability of a firm to set prices and output without reference to the competition or the firms conduct within the market. External aspects are concerned with entry and exit conditions, which can be divided into three categories; 1) patents or property rights, 2) economies of scale, and 3) product differentiation and customer loyalty.
Understanding the industry characteristics mentioned by Lipczynski and Wilson (2004) makes it possible to identify the market structure of the HCI. This is useful as there are several theories about how market structures behaves, which could provide in-depth insights in the HCI. Another reason why it is important to identify the market structure is the influence of the market structure on the conduct of the company. The conduct consists of organizational characteristics that should be determined to find the organizational barriers of the case company. Table 2.2 provides an overview of the behaviour of a characteristic and the related market structure.
Table 2.2 - Relation between behaviour of a characteristic and market structure (Lipczynski & Wilson, 2004) Perfect competition Monopoly Monopolistic competition Oligopoly Number of firms
Many One Many Few
Product type Identical Unique Differentiated Differentiated or undifferentiated Entry barriers None Difficult
(especially if enforced by government)
Easy Difficult
Demand curve Horizontal Downward sloping
Downward sloping
Downward sloping Price behaviour Price – MC3 Price > MC Price > MC Price > MC Objective Profit maximisation Profit maximisation Profit maximisation Profit maximisation
Economic profit Zero Positive Zero Depends on
entry conditions and the strategic behaviour of firms
Examples Selected agricultural products
Rail network Professional services, hairdressers, restaurants Differentiated: cars, pharmaceuticals Undifferentiated: building materials, oil
The case company operates in the HCI, which can be classified as an oligopoly industry with a few competitors. Note that this state is preliminary, and has yet to be confirmed in the result phase of this research.
2.3 Organizational characteristics
To our knowledge there is no literature written about the organizational characteristics of companies that operate in the HCI. Organizational characteristics are in general dependant on the company, its structure, norms, values, beliefs and so on. Therefore, the organizational characteristics of the case company have to be determined through research. Within this section, literature research of other companies’ organizational characteristics will be reviewed. The review will provide information about the importance of certain organizational characteristics. With this information a comprehensive list of organizational characteristics is created by the researcher.
Rogers (1995) defined innovation as an idea, practice, or object, perceived as new by an individual or other unit of adoption. According to this definition we can consider that a DBA is perceived as an innovation by the case company. The DBA is perceived as a new practice and the case company is struggling with “the adoption of an innovation”. The adoption of the innovation requires a change in the organizational process, and are for this reasons interrelated. Therefore, the words “adoption of innovation” and “organizational change” will be used interchangeably within this research
According to previous research, organizational characteristics are often chosen because of their significant influence on the adoption of innovation processes (Ko, Kincade, & Brown, 2000; Lefebvre et al., 1991; Masters et al., 1992; Sullivan, 1990). Ko, Kim, Kim, and Woo (2007) categorized organizational characteristics that influence the adoption of innovations into three groups: 1) Firm characteristics, 2) Product characteristics, and 3) CEO characteristics.
frequently changes product lines, searches for information and investigates markets consistently and over a long period of time. Analysers observe the results of prospectors and will adopt an innovation after an extensive analysis. Reactors only react to environmental pressures, such as competitors. They do not lead the way in innovation. Finally, defenders stay in current markets with stable products and are little to not involved in new product development. Ko, et al. (2007) state that “companies with an aggressive organizational strategy are more likely to adopt an innovation” (p.p. 67), thus companies with a prospector or analyzer strategy are more likely to adopt innovation processes. The last firm characteristic is concerned with the maturity of the information system. Several researchers pointed out that companies with more experience and mature information systems are more likely to adopt new innovations (Chang et al., 1999; Grover and Goslar, 1993; Sullivan, 1990).
The second group, product characteristics includes product category, position and seasonality. Different product categories vary in attributes such as scale of production or product life cycle, which influences the adoption of an innovation (Ko and Kincade, 1998; Mansfield et al., 1971). The second and third product characteristics that influences the adoption of an innovation according to Ko et al. (2008) are position and seasonality.. The position of product and seasonality influence how fast a company has to adapt to changes in the environment. When a company has to adapt rapidly due to changes in the environment, whether this is due to seasonality or the position of the product, it is likely that such a company adopts an innovation faster (Ko et al. 2007).
The last group, CEO characteristics, is concerned with age and education. Previous research points out that the age and education of a CEO plays a significant role when executing a strategy (O'Leary, Rao, & Perry, 2004).
company are influenced by the industry it operates (Jackson, Schuler and Rivero, 1989). For this reasons the list of characteristics of Ko, et al. (2007) is expanded with other organizational characteristics, that will be discussed below (Table 2.4).
Cramm, Strating, and Nieboer (2013) studied the long-term care sector. They wanted to know what the influence of certain organizational characteristics were on employee solidarity. Solidarity behaviour is the degree of solidarity of employees towards their supervisor (Cramm, Strating, & Nieboer, 2013). Solidarity behaviour is related to resistance towards organizational change, because the power of the supervisor is crucial, if the degree of solidarity is high, when undergoing an organizational change (Torenvlied & Velner, 1998). Cramm, et al. (2013) points out that the following organizational characteristics correlate with the adoption of an innovation; centralization, hierarchical culture, formal and informal exchange of information, and leadership style. For this reason these characteristics are added to the list of characteristics set up by Ko, et al. (2007) and used within this research (Table 2.4).
Other researchers investigated the influence of organizational characteristics on adopting personnel practices (Jackson, et al., 1989). The reason for their research was that “Personnel researchers frequently speculated that organizational characteristics can shape the use and effectiveness of personnel practices. These same researchers usually lament our lack of knowledge about which organizational characteristics have significant consequences and what those consequences are.” (Jackson, et al., 1989, p.p. 728). Personnel practices are all the practices that are concerned with having employees, in example attendance policies, training, promotion. Personnel practices focus on human resources of a company. Several practices are implemented and improved to manage personnel effectively. This is related to the organizational change and therefore useful to complement the list of organizational characteristics of Ko, et al. (2007) (Table 2.4). The organizational characteristics that correlate with personnel practices are: industry sector, pursuit of innovation as a competitive strategy, manufacturing technology, organizational structure, organizational size and unionization (Jackson, et al., 1989).
systems, material resource planning systems, automated materials handling systems, robotics, computer-controlled machines and computer integrated manufacturing systems.” (Schroder & Sohal, 1999, p.p. 1270). Thus, AMT is not the same as DBA, however both are concerned with the adoption of computers and their capabilities within the manufacturing process. This makes AMT comparable with a DBA . For this reason the organizational characteristics; firm size, external business environment, and principal ownership, used by Schroder and Sohal (1999) will be added to the list of organizational characteristics (Table 2.4).
Table 2.3 - Extended organizational characteristics, categorized according to Ko, et al. (2007)
Ko, et al. (2007) Cramm, et al. (2013) Jackson, et al. (1989) Schroder and Sohal (1999) Firm characteristics - Firm size - Strategy - Maturity of information systems - Centralization - Hierarchical culture - Formal and informal exchange of information - Organizational size - Pursuit of innovative strategy - Organisational structure - Unionization - Firm size Product characteristics - Categories - Seasonality - Position - Manufacturing technology - Industry sector - External business environment CEO characteristics - Age - Education
- Leadership style - Principal
ownership
2.4 Reasoning for categorization of characteristics in Table 2.4
Per researcher, column, will be discussed why the characteristics are placed within a specific category. The categories were created by Ko, et al. (2007) and are: Firm characteristics, Product characteristics and CEO characteristics.
centralization within a company. In example, when size increases, control costs also exponentially increases to the point where top management is obliged to allocate a portion of it discretionary power (Wilensky, 1967; Pondy, 1970; Coughlan, Cooke and Safer, 1972; Wilson, 1966; Zaltman, Duncan and Holbek, 1973). Ko, et al. (2007) categorized size in the category “Firm characteristics” and because size and centralization correlate, they are placed in the same category. The second characteristics of Cramm, et al. (2013) is hierarchical culture. Hierarchical culture is generally unwritten cultural norms within a centralized company that tell the employees how the relations between all the employees of the company really are. They influence the perceptions of all the employees within the company (Cramm et al., 2013). Cramm, et al. (2013) pointed out that centralization and hierarchical culture are correlated and are therefore placed within the same category. The last characteristic of Cramm et al. (2013) in the category “firm characteristics” is formal and informal exchange of information, which is linked to the hierarchical culture. Hierarchical culture is by implication linked to firm size (Cramm et al., 2013). Also is formal and informal exchange of information linked to the maturity of information systems, in example the higher the maturity of the information systems, the more formal exchange of information is performed (Ko, et al., 2007). For those reasons, formal and informal exchange of information is placed in the same category as hierarchical culture and maturity of information systems.
Only one characteristic of Schroder and Sohal (1999) is situated in the category “firm characteristics”. The characteristic is firm size which is identical to the firm size of Ko et al. (2007), and therefore situated in the same category.
The second category Ko et al. (2007) created is “product characteristics”. Jackson et al. (1989) mentions manufacturing technology and industry sector as organizational characteristics. Those characteristics are both related to the product, as the maturity of the manufacturing technology correlates with the product (Ko, et al., 2007). In example, if the product is easy to manufacture the maturity of manufacturing technology is low. The product determines the industry of the company, and therefore is the characteristic industry placed in the category “product characteristics”.
Schroder and Sohal (1999) added external business environment to this category. The external business environment is related to the position of the company and the industry it is situated in. The characteristics position and industry are situated in the category “product characteristics”.
The last category that Ko, et al. (2007) created, is CEO characteristics. Cramm et al. (2013) pointed out that leadership style is an important characteristics.. As the style of leadership within a company is generally determined by the CEO, the characteristic leadership style is placed in the category “CEO characteristics”. Schroder and Sohal (1999) mentioned principal ownership as organizational characteristics, which is also added to the category CEO characteristics. The principal owner of a company is commonly the CEO of the company, as the individual that owns the company wants to maintain the majority of the control over the company and therefore becomes the CEO (Schroder and Sohal, 1999).
2.5 Relevance
current literature lacking regarding the characteristics of the HCI and the industry barriers of the HCI. Industry barriers are identified as critical success factors for the adoption of innovations. Recognizing the characteristics and their influences on the adoption of innovations helps companies with executing change projects efficiently and effectively, which directly influences time and costs.
2.6 Research questions
The purpose of this research is related to how the case company, ESD-SIC, should successfully implement a data-based approach (DBA). The corresponding research question is: “What roadmap to follow in the HCI in order to achieve an effective data-based approach (DBA)?”.
Post and Alman (1994) pointed out that a change is concerned with two types of barriers; respectively industry and organizational barriers. The barriers can be identified by determining the industry and organizational characteristics and linking them to SRC. ESD-SIC operates in a HCI. Within literature the HCI is not investigated, therefore also the HCIC are unknown. The organizational characteristics are company specific and have to be determined per company and linked to SRC. To provide ESD-SIC with a roadmap to follow to effectuate change management to achieve an effective DBA first the following sub-questions need to be answered.
1. What are the HCIC characteristics?
2. What are the organizational characteristics of ESD-SIC?
3. “What is the relationships between the HCIC characteristics and resistance to change?”. 4. What is the relationship between the organizational characteristics and resistance to
change?
3 METHODOLGY
This section will discuss the design of this research and the used methods. Next the data collection and data analysis is explained, finalizing with the research quality criteria.
3.1 Research design
The research design is a single case study, as the purpose is to identify linkages (Voss, 2009), through observations and interviews at one case company. With the identified linkages a roadmap for change can be build. The research clearly needs a qualitative approach, as the research questions are qualitative in their nature. Qualitative techniques that are use are: literature research, interviewing, questionnaires and observations. The purpose of this research is identify and describe the industry characteristics of the HCI and the organizational characteristics of ESD-SIC. When the characteristics are identified, relationships between SRC and the characteristics are determined. With this information a Roadmap for Change based on the SRC will be designed, which is the ultimate goal of the research. Figure 3.1 provides an overview of the deliverables of the research (arrows), and the methods that will be used (circles).
Figure 3.1 - Research design with deliverables and methods
Through literature research a list of SRC, a list of industry characteristics, and a list of organizational characteristics were created. To our current knowledge there is no literature about the HCI and the HCIC, therefore the HCIC have to be determined. Literature research provides insights in which industry characteristics are necessary to determine to get a comprehensive view of the HCI. Organizational characteristics are dependent on the company and have to be determined for the case company. With a literature research is sought for the organizational characteristics that influence the adoption of innovations, as the focus of this research is on the adoption of an innovation.
• Industry characteristics • organizational characteristics • Sources of resistance to change Literature research • HCIC • Organizational characteristics of ESD-SIC • Degree of occurence of SRC at ESD-SIC Observations &Interview & Survey • Predicted relations between characteristics and SRC • Actual relations Expert elications
Roadmap for ESD-SIC Literature
The HCIC and the organizational characteristics are determined for the case company with the use of observations and questionnaires. Per organizational characteristic, in example size, is determined how the case company can be classified, in example small, medium, or big.
To identify the relations between the characteristics and SRC expert elicitations are used. There are two groups of outside-experts and a group of inside-experts. The first group of experts, group A, provides predictions about the possible relations. The second group of experts, group B, passes through data about organizational characteristics and the degrees of occurrence of SRC at their companies. The inside-experts provide the degree of occurrences of a SRC at the case company. The data from the inside-experts and the outside-experts group B are combined and analysed, to find significant correlations.
Last, on the basis of the outcomes of the analyses a Roadmap for Change is created combined with a literature research.
3.2 The data collection methods used during the research
The different techniques and their purposes are discussed in this section.
3.2.1 Literature research
A literature research provides insights in already investigated topics which were used to strengthen and build theory in this research. A literature research is executed to get information about which industry and organizational characteristics influences the adoption of innovations. Another literature research was performed to gain knowledge about the relations between characteristics and SRC. Post and Alman created the link between characteristics and SRC. which is extensively discussed in the theoretical framework. To finally create a roadmap for the case company a literature research is conducted to gain information about change management models and preventing and handling SRC.
3.2.2 Interviewing
and exit barriers, product differentiation, diversification, and information (Appendix B). Also were five questions drawn to ascertain the basic conditions (Appendix B), as those influence the characteristics which provides a full understanding of the HCI structure.
The interview is conducted in person and started with the interview protocol (Appendix D). The interview is recorded because many facts were mentioned. This assures a high quality of the interview transcripts (Karlsson, 2009). The transcripts were directly completed after the interview.
3.2.3 Observations
To determine the organizational characteristics multiple employees were observed during a semi-structured interview (Appendix C). This, because no one person has all the required knowledge and there could be different interpretations or viewpoints of the characteristics. Another reason why the observations are performed during a structured interview, is that the setting helps to start a conversation and certain questions can be asked to provoke reactions. This provides rich in-depth information which is needed to determine complex organizational characteristics, such as organizational culture. Appendix D provides a visual view of the company ESD-SIC and the respondents of the interviews.
3.2.4 Questionnaires
3), at which position (row 4), and for how many years they have experience with changes within companies (row 5). Respondents in Group B were asked to indicate the degree of occurrence of a SRC at their company and their company’s characteristics on a five-point scale. Appendix J provides an overview of the nine companies, with the degree of occurrence of a SRC at their company, and their company’s characteristics on a five-point scale described in Appendix I.
Table 3.1 - Group A: survey outside-participant characteristics
Participant Industry Company Position Experience
A Airline Airline Manager 8
B Insurance Maritime insurance company Claims handler 1
C Food Food processing Category manager 10
D Food Production CI supervisor 2
E Education Primary school Teacher 4
F Manufacturing Manufacturing of steel Assistant plant manager 3
G Student University Student 2
H IT IT infrastructure provider IOT product manager 10 I Industrial
computing solutions
Computing solution provider Product planning 18
J Unknown Unknown Unknown 5
K Aerospace Service provider Unknown 14
L Food Packing Production manager 15
M Government Safety/fire Strategic advisor 2
N Education University Lecturer 25
O Steelmaking Steel Asset manager 10
P ICT Software Owner 4
Q Chemical Chemical Master Black Belt 5
R Automotive Production Commodity buyer 20
S Railroad Refurbishment Production manager 15
T Elevator technique
Mitsubishi Commissioning engineer 22
U Logistics and Supply Chain
3.3 Data analysis method
The transcript of the interview with the Manager of Sales and Marketing, is used to determine the industry characteristics.
The observations of the employees within the case company and transcript of the interview of the Manager of Sales and Marketing are used to identify the organizational characteristics. The observations were coded by means of a coding tree (Table 3.2), as it provides a clear and efficient analysis. The coding tree consists of the three main topics; Firm Characteristics, Product Characteristics, and CEO Characteristics. Followed by the several sub-characteristics.
The elicitations of outside-experts group A are used to get an notion of what relations between characteristics and SRC categories are suggested by the outside-experts. The experts are asked to make linkages between certain characteristics and SRC categories on a five-point Likert scale. The outcomes of the experts are converted into ordinal data, which will be analysed in SPSS. The median of the ordinal data provides insights of most cited answer of all the experts. The median is used to gain insights in the central tendency of the dataset. The dataset consists of ordinal data and therefore only the mode and the median are applicable to provide insights in the central tendency, as the intervals between the ranks cannot be presumed equal (Jamieson, 2004). The median is chosen as it presents the middle score of the dataset (Jamieson, 2004). Also histograms of all the answers were looked at per link between a characteristic and a SRC categories, to get a better view of the spread of answers given by the respondents. Histograms are chosen as they provide insights in the frequencies of the responses in each category, which is generally used when understanding ordinal data (Blaikie, 2003).
the spread of answers provided by the respondents. Histograms are used for the same reason as mentioned in the paragraph above.
Table 3.2 - Coding Tree: Categorize all the observations, comments, statements about the Organizational Characteristics
Topic Sub-theme Description Code
Firm characteristics
Firm size All statements, comments, or observations that are concerned with the size of the firm.
F_SE Strategy All statements, comments, or observations that are
concerned with the strategy that has been executed, or are changing.
F_SY
Information systems
All statements, comments, or observations that are concerned with how and with what technology information is exchanged. F_IN.SS Organizational structure; centralization, hierarchical structure
All statements, comments, or observations that are concerned with the organizational structure of ESD-SIC, such as centralization, hierarchical structure, and unionization. F_OL.SE Product Characteristics Manufacturing technology
All statement, comments or observations that are concerned with the technology that is used for manufacturing.
P_MG.TY
External business environment
All statements, comments or observations that are concerned with the external business environment, such as the position, industry sector, product categories, and seasonality
P_EL.BS.ET
CEO characteristics
Age All statements, comments, or observations regarding the age of the CEO.
C_AE Education All statements, comments, or observations related to
the education of the CEO.
C_EN Leadership style All statements, comments, or observations concerned
with the style of leadership the CEO performs.
C_LP.SE Principal
ownership
All statements, comments, or observations concerned the principal ownership of ESD-SIC.
3.4 Validity and reliability
Karlsson (2009) points out that in qualitative research it is highly important to validate the gathered data by assessing the quality criteria. Table 3.3 provides the most relevant criteria for validity during this research.
Construct validity is ensured by the use of multiple interviews, observations, questionnaires, and literature research. Where similar results of multiple source caused convergent validity. Another important aspect within the research is that predictions about relations are verified and validated by experts, which strengthens the construct validity. Also triangulation is sought as two different methods are used to determine the relationships between the characteristics and the SRC.
The internal validity is ensured by recording and transcribing the interviews, which increases the quality of the research. Also is sought for patterns of different experts, which allows comparison and discussion of the findings.
Several experts with varying background were selected, which strengthens the external validity. Each relationship between a characteristic and SRC is discussed with at least two experts, to thoroughly discuss and asses the relations. This ensures that the findings correspond to practice.
the interview and saved in a separate database. To ensure the interpretations of the researcher are correct, the described observations were discussed with the observed interviewee.
Table 3.3 - Quality criteria of the Research
Criteria Description
Construct validity - Multiple sources of evidence
- Expert interviewing to verify and validate insights - Key informants review drafts of study report
- Triangulation by use of three different research methods
Internal validity - Recording of interviews
- Pattern matching of different experts
External validity - Verifying findings with practice - Several different participants
Reliability - Interview protocol - Interview transcripts - Interview recording - Coding tree
- Database for interviews, observations, and questionnaires
4 CASE STUDY OUTCOMES
4.1 Heavy chemical industry characteristics (HCIC)
Described in the theoretical framework is that the market structure is influenced by the basic conditions (Lipczynski & Wilson, 2004). For that reason the basic conditions of the HCI are first determined through an interview with the Manager of Sales and Marketing. Table 4.1 displays the basic conditions of the case company. The first row of the table shows the two sides of the basic conditions, respectively the demand side and the supply side. The second row indicates the conditions that have to be determined for the case company. The third row shows the basic conditions that are determined for the case company.
The customers’ responsiveness of demand with respect to prices, income and tastes can be inelastic or elastic or neutral. The responsiveness of demand is elastic if the change in demand for a given product corresponds closely to the change in price, income or taste for that product (Lipczynski & Wilson, 2004). In other words, an increase in price of 1% leads to an decrease in demand of 1% (Lipczynski & Wilson, 2004). The customers’ responsiveness of demand with respect to prices, income and tastes within the HCI is elastic. This elasticity is due to the high competition, and the availability of substitutes, such as diamond or ferrosilicon. The customers preference is stable and does not change much over time, this as SiC is an intermediate product.
One furnace = 3500 tonnes4 Needed is 7.2 MWh per tonne = 25.200 MWh3 Price for energy in the Netherlands is circa €0.23 per KWh (2016)5
1 MWh = 1000 KWh = 25.200.000 KWh
25.200.000 KWh x €0.23 = €5.796.000 per furnace This results in 35% of the cost price is to compensate the energy costs.
Table 4.1 - Basic Conditions of ESD-SIC
Basic Conditions ESD-SIC
Demand Side - Customers’ responsiveness of demand with respect to prices, income and tastes
- Price, income, and quality elastic
- Change in customer preference - Stable market
Supply Side - Economies of scale - No economies of scale - Availability of inputs - Good availability
- Costs of production - 35% of cost price is due to energy costs
Lipczynski and Wilson (2004) pointed out that the basic conditions influences the market structure. For this reason the basic conditions were first determined for the case company and subsequently the market structure is determined. The market structure consists of internal and external industry characteristics, which are indicated for the case company in Table 4.2. The following section describes how the industry characteristics are determined for the case company (third row of table 4.2).
The internal aspects are concerned with the concentration in the HCI, which is expanded by the amount of power held in the hands of a few firms. In Europe only seven countries produce SiC, where Norway and Romania have two firms that produce SiC, and the other five countries have only one company that produces SiC (König, 2011). The total production of SiC of these eight companies is 330.000 tonnes. When looking worldwide, 1.548.000 tonnes is produced, except the 330.000 tonnes of Europe. Appendix F provides the exact number of tonnes produced per country. With those numbers, the concentration rate was calculated for the HCI, see Appendix G for the calculation. The Herfindahl-Hirschman index (H-H) is a concentration measure that is generally used by the European Commision to calculate the concentration within a market, and set guidelines based on the H-H index (Rhoades, 1993). For this reason, and that the H-H index is pointed out as an ideal index based on the Hannah and Kay properties the H-H index is used to measure concentration. Clark (1985) noted, although some academics may prefer to adopt different criteria, the Hannah-Kay properties form a solid basis for discussing the validity of concentration measurements. The four properties of Hannah and Kay are (Hannah & Kay, 1977):
1. Concentration curve ranking criterion: for one industry to be considered more concentrated than another, its concentration curve must be above the other’s everywhere on the graph. If they cross, then the situation is ambiguous and no judgement can be made.
2. Sales Transfer Principle: the transfer of sales from a small firm to a large firm must increase concentration.
3. Entry Condition: the entry of a small firm into an industry must decrease concentration. 4. Merger Condition: if two firms merge then concentration must be seen to have
increased.
import SiC into Europe. After 2011 China has only to pay 5.5% of taxes, a difference of 49.5% influenced the amount imported SiC into Europe by a rise from 0 to 35.000 tons. This is almost 15% of the total market and caused a decreasing trend in the prices.
The growth rates of ESD-SIC are stable in terms of output, but in terms of personnel it grew. This is, because in a few years many employees will retire, and for that reason, young, new personnel is hired.
When looking at the characteristic the output of buyers and sellers, there is a worldwide production of 1.548.000 tonnes of SiC. The output of the case company always get sold provided that the selling prices are comfort market prices. When the case company would increase their selling prices they will not sell their product, as their customer cannot sell their product due to the high selling price of the case company. Hence there is a high competition within the market, currently.
The external aspect includes patents or property rights. An environmental license is needed to produce SiC in the Netherlands. The rules for environmental licenses differ per country. For example, China does not need an environmental license to produce SiC. Moreover is the case company required by the government to write a multiannual energy-efficiency plan. External SiC companies do not have this obligation. Another aspect is the emission trading scheme for CO2, as ESD-SIC is the only SiC company that has an energy installation. With the energy installation, process gas from a furniture is reused for energy production.
The customers of the case company appreciate the efforts to be as environment friendly as possible, because those customers benefit from the green image of their supplier of SiC. Another aspect how ESD-SIC differentiates itself is by quality of the product, but also through service. ESD-SICs customers are generally in Europe, and as ESD-SIC is also located in Europe it is easy to come over when problems arise. This is not the case when ordering from China, and for those reasons the customers are more loyal towards ESD-SIC.
The technology ESD-SIC uses to gain information about competitors is generally through the internet. ESD-SIC tests the customer satisfaction through ISO and the wishes of the customers are discusses personally with them.
Table 4.2 - Industry characteristics
Industry characteristics ESD-SIC characteristics
Internal aspects Concentration Un-concentrated Growth rates of buyers
and sellers
Growing amount of sellers. Buyers is stable.
Growth rates of company
Stable in terms of output.
Output of buyers and sellers
1.548.000 worldwide production
Output of company 65.000 External aspects Patents or property
rights
Environmental license, multiannual energy-efficiency plan and emission trading scheme Economies of scale Inapplicable
Product differentiation and customer loyalty
Through quality, environmental and energy efficiency
Product diversification Three products Information
(employment of technology)
Internet, personal contact, e-mail.
still higher than the marginal costs otherwise the company would make losses (Lipczynski & Wilson, 2004), which is not the case for the case company. The economic profit of the companies within the HCI depends on strategic behaviour of the companies in example through price fights, or providing high quality, or being reliable, to win customer loyalty.
4.2 Organizational characteristics of ESD-SIC
The organizational characteristics that came forward in the theoretical framework are determined for ESD-SIC through observations and interviews. At the end of this section, Table 4.4 provides the organizational characteristics of ESD-SIC.
ESD-SIC is categorized as a small and medium sized enterprise (SME), but is in fact a medium sized company, as it consists of 96 employees with a turnover of 39 million (European Commision, 2016) . Their strategy is profit maximisation through a quality and environmental focus, which ensures customer loyalty. The use of information systems is low as the main system of spreading information is verbally or written on paper. Observations with the planner and coordinator of crude production justify this as the Planner of Crude Production states that:
“I create an arrow-schedule for all the furnaces per transformer. I send this schedule to the coordinator of crude production, who changes the schedule a lot through the weeks. The coordinator always writes down the most important concerns and which has priority. This paper is always used to plan the production per day.”
And the Coordinator of Crude Production states that:
“Every morning after I read the update-mails, I have a walk across the plant with the group-leader of production. During this walk I talk about the course of events”.
The company is decentralized, as they produce SiC and energy as a by-product, which is reused by themselves.
based on control will lead mainly to incremental change, while a focus on Adhocracy will more typically lead to breakthrough change.
Figure 4.1 - Four types of hierarchical culture
The current hierarchical culture of the case company changed from market oriented towards a hierarchy culture. Earlier the case company focused on competition, achievement, and “getting the job done” however, through the years the focus changed. ESD-SIC is currently focusing on efficiency, stability and “doing things right”. ESD-SIC kept oriented on stability and control. Observations with the Manager of Research and Process Development and Manager of Sales Marketing justify this as they state that:
“I think the problem why the change towards a DBA-approach is also hard, as the focus within ESD-SIC was always on “getting the job done”. Throughout the years, we became pretty good at that, and “putting out the fires”. However, nowadays we are forced to change by shareholders, towards a more DBA-approach. This causes a shift in “getting the job done” towards “doing things right””.
Manager of Research and Process Development
Manager of Sales Marketing
Exchange of information is generally informal, as it is a small decentralized company. The company has an entrepreneurs council, thus it is little unionized.
ESD-SIC produces three products, e-metsic, SiC green, and SiC dark. Those three products are little influenced by seasonality. The Manager of Research and Process Development points out that:
“We see peaks and valleys. There is a decrease in the months November and December as our customer reduce their inventories.”
ESD-SIC position in the market is strong, as the customers are loyal to ESD-SIC. Also is ESD-SIC the most environmental SiC plant in the world, which differentiates them from its competitors in the HCI. The amount of competitors is growing, as more SiC is imported from China, however the customers of ESD-SIC are loyal to ESD-SIC. This is confirmed by the Manager of Sales Marketing as the states that:
“The customer are loyal because of our high service level. We are close to our customers as we are located in Europe, and the major part of our customers are also located in Europe. If there are problems, we take a car or a plane and go the customer to see if we can help. This does not happen if a customer buys a container from China. Most of the time the container is already paid and how do you handle complaints?”
Table 4.3 - Organizational characteristics of ESD-SIC Organizational characteristics categories Organizational characteristics Organizational characteristics of ESD-SIC
Firm characteristics Firm size Medium sized company
Strategy Environmental
Maturity of information systems
Low
Centralization Decentralized company Hierarchical culture Change from market oriented
towards hierarchy culture Formal and informal
exchange of information
Informal, through talks at the floor
Unionization Entrepreneurs council Product characteristics Categories Three categories
Seasonality Little influenced by season
Position Strong
Manufacturing technology
Focus on environmental friendly
Industry sector Heavy chemical External business
environment
Stable amount of buyers, growing amount of competitors
CEO characteristics Age Between 40 and 50
Education University
4.3 Relations between characteristics and SRC
Between the HCIC and the organizational characteristics are several overlaps which are shown in Appendix H. For this reason, the combined influence of the two characteristics on a SRC is. Within this section “the characteristics” refers to the industry and the organizational characteristics combined.
There are three datasets, respectively from the experts group A, the outside-experts group B, and the inside-outside-experts of ESD-SIC. First the dataset of the outside-outside-experts group A was analysed, to gain insights into the opinions of external experts about relations between characteristics and SRC. Secondly, the dataset of the inside-experts was analysed, to understand the degree of occurrence of a SRC at the case company. Lastly, the dataset of the outside-experts group B was analysed to find correlations between characteristics and SRC.
4.3.1 Opinions of outside-experts group A
Twenty-one outside-experts were asked to provide their opinion, as shown in Table 3.1. The experts were asked to indicate on a five-point Likert scale if there are relations between certain organizational characteristics and SRC categories. The outcomes were collected through SurveyMonkey, and converted into ordinal data. The ordinal data was analysed in Excel, with the use of Histograms and the calculation of the medians.
Figure 4.2 - Respondents per category
Figure 4.2 shows that 11 respondents suggest that the firm characteristics mostly relate with SRC categories. The analysis of answers provided by the respondents per category of characteristics will now be further elaborated.
Tables 4.5 till 4.7 provides the medians of all respondents, per relation between a characteristic and a SRC category.
The outside-experts group A suggest that the SRC categories “Distorted perception, interpretation barriers and vague strategic priorities” and “Political and cultural deadlocks” strongly relate with all the six firm characteristics. Suggested is that the SRC categories “Leadership inaction” and “Collective action problems” and “Capability gap” do not relate with size. It is suggested that all the other SRC categories do relate with the six firm characteristics, by the outside-experts group A.
The following relations are suggested by the outside-experts group A. The SRC categories do relate less with the product characteristics compared to the firm characteristics. The SRC categories “Distorted perception, interpretation barriers and vague strategic priorities” does relate with product characteristics “External business environment” and “Manufacturing technology”, but does not relate with “Product categories”. The SRC “Lack of motivation” and “Leadership inaction´ could relate or could not relate, as the experts are neutral in their responses. The product characteristic “External business environment” does relate with the SRC
0 2 4 6 8 10 12
Firm Characteristics Product Characteristics CEO Characteristics
Respondents per Category
categories“Political and cultural deadlocks”, “Embedded routines”, “Collective action problems”, and “Cynicism”.
Suggested is that the CEO Characteristics do relate with the SRC categories, as only the SRC category “Lack of motivation” does not relate with “Age of the CEO”. The SRC categories “Distorted perception, interpretation barriers and vague strategic priorities”, “Lack of creative response”, “Political and cultural deadlocks”, “Collective action problems”, “Capability gap”, and “Cynicism” could relate or could not relate to age, as the respondents are neutral in their responses. The SRC category “Political and cultural deadlocks” could relate or not with the characteristic “Education”. All the other CEO characteristics do relate with the SRC categories.
Table 4.4 - Means per relation between Firm Characteristics and SRC
Firm Characteristics – N=11 Distorted perception Lack of motivation Lack of creative response Dead-locks Leadership inaction Embedded routines Collective action problems Capability gap Cynicism Firm size 4 4 4 4 2 4 2 2 4 Maturity of info systems 4 4 3 4 4 3 3 4 3 Formal and informal
Table 4.5 - Means per relation between Product Characteristics and SRC Product Characteristics – N=4 Distorted perception Lack of motivation Lack of creative response Dead-locks Leadership inaction Embedded routines Collective action problems Capability gap Cynicism External business environment 4 3 3 4 3 4 4 2.5 4.5 Position 3.5 3 4 3 3 3.5 2.5 3 2.5 Product Categories 2 2 3 2 2 2 2 2 2 Manufacturing technology 4 3.5 3 3.5 3.5 3.5 3 4 3
Table 4.6 - Means per relation between CEO Characteristics and SRC
CEO Characteristics – N=9 Distorted perception Lack of motivation Lack of creative response Dead-locks Leadership inaction Embedded routines Collective action problems Capability gap Cynicism Age 3 2 3 3 4 4 3 3 3 Principal ownership 3.5 3.5 4 3.5 4 4 4 4 4 Leadership style 4 4 4 3.5 4 4 4 4 4 Education 3.5 4 4 3 4 4 4 4 4
4.3.2 Opinions of inside-experts
According to Del Val and Fuentes (2003) did the categories, consist of six sources of resistance (SRC). The outside-experts were asked to provide an overall opinion about a relation between characteristics and a SRC category. The inside-experts were asked if a specific SRC is present at ESD-SIC. Table 2.1 provides the categories and the corresponding SRC.
factor as the internal reliability decreased below .60. According to Sakakibara, Flynn and Schroeder (1997) the minimum reliability alpha is .60. The category “lack of creative response” could not be merged into a sum-variable, as the reliability between the SRC in the category is lower than .60. It is common in psychology that different variables cannot be merged into a construct, due to the human aspect (Sakakibara, Flynn, and Schroeder, 1997). The SRC in the category “Others” also were not factored, as they measure completely different constructs.
Table 4.7 - Factor and reliability analysis Category Factor 1 Factor
value Cronbach’s Alpha Factor 2 Factor value Cronbach’s alpha Distorted perception, interpretation barriers and vague strategic priorities - Myopia - Perpetuation of ideas - Implicit assumptions - Communication barriers .916 .817 .830 .765 .875 Organizati onal silence .734 .688 Denial .939 Low motivation
- Direct cost of change
.883
.873 n/a
- Cannibalization costs .907 - Cross subsidy comforts .794 - Past failures .855 - Different interests among employees and
management
.615
Lack of creative response
- Fast and complex
environmental changes n/a
.519 n/a
- Resignation n/a
- Inadequate strategic vision
Political and Cultural deadlocks
- Implementation climate and relation between change values and organizational values - Departmental policies - Incommensurable beliefs - Deep rooted beliefs - Forgetfulness of the social dimensions of change .805 .838 .870 .907 .662 .878 n/a Others - Leadership inaction - Embedded routines - Collective action problems - Capability gap - Cynicism n/a n/a
A (sum)-variable represents the degree of occurrences of a SRC category at ESD-SIC. The medians of the (sum)-variables were calculated, to capture the overall opinion of the inside-experts about the degree of occurrence of a SRC category at ESD-SIC. The medians per SRC category are shown in Table 4.9. The SRC categories “Embedded routines” and “Cynicism” occasionally occurs at ESD-SIC, according to the inside-experts. All the other SRC categories are in between occasionally occurring and now and then occurring.
Table 4.8 - Presence of SRC at ESD-SIC
Degree of occurrence of SRC at ESD-SIC according to inside-experts – N=22 Distorted perception 1&2 Lack of motivation Lack of creative response 1&2&3 Deadlocks Leadership inaction Embedded routines Collective action problems Capability gap Cynicism 2.5 2.4 2.4 3 2.2 3 2 3 3 2
