From Participation to Readiness for Change: The Influence of Merger Characteristics

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From Participation to Readiness for Change: The

Influence of Merger Characteristics

A case study at FrieslandCampina Cheese & Butter

Master Thesis Student: Tim Rondhuis Student number: 1427261

Kerkdijk 37 3615 BA Westbroek

Telephone number: +31 (0)6 26986749

e-mail: t.rondhuis@student.rug.nl or timrondhuis@gmail.com

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From Participation to Readiness for Change: The Influence of Merger Characteristics | Tim Rondhuis 2

From Participation to Readiness for Change: The

Influence of Merger Characteristics

A case study at FrieslandCampina Cheese & Butter

Tim Rondhuis

University of Groningen

Abstract

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Introduction

Royal FrieslandCampina is a merger organisation of Friesland Foods and Campina. For the whole of FrieslandCampina, it was deemed necessary to make new supplier management procedures. This was deemed necessary, because there were still two policies for suppliers. In order to streamline supplier management, new procedures have been made on corporate level. ‘Taking the best of two worlds’, was the quote often used in making new corporate supplier management procedures. This reflected the wish to combine the best of the Friesland Foods and the Campina supplier management.

The supplier management procedures apply for the whole of FrieslandCampina, which includes all its business groups. For the business group Cheese & Butter, one employee of the Quality Assurance (QA) department participated by as a member of the workgroup making these of supplier management procedures. This workgroup contained various procurement employees and QA employees from the different business groups. The business group Cheese & Butter is one of the business groups who will have to implement these procedures. For implementing these procedures, it is important to know what the readiness for change is among the employees. Furthermore, it is important to know what the influence of the participation in the making these procedures is. And it is important to know what the influence of the extraordinary circumstances of the merger is on the readiness for change.

As stated before, FrieslandCampina is a merger of Friesland Foods and Campina. These two organisations merged in 2008. This made FrieslandCampina the third largest dairy organisation in the world (after Nestlé and Danone). FrieslandCampina is owned by around 15.000 member farmers in the Netherlands, Belgium and Germany and sells its products worldwide.

FrieslandCampina consists of four business groups. These business groups are: Consumer Products Europe; Consumer Products International; Cheese & Butter; and Ingredients. To coordinate these business groups and their overlapping activities, FrieslandCampina has a corporate centre. One of the activities in which the corporate centre coordinates the business groups and their overlap, involves supplier management. In order to do so, the corporate centre initiated the making of new corporate supplier management procedures.

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‘Procurement’ department and the ‘Quality Assurance’ (QA) department. The supplier management procedures proscribe changes in accountabilities, responsibilities, demanded consults and demanded informing of others. This results in changes in tasks between the procurement department and the QA department.

At the moment this research is done, the making of new corporate supplier management procedures for FrieslandCampina has just finished. Therefore, at this moment in time it is premature to test actual changes in the business group. Therefore readiness for change will be tested as a consequence of the participation process.

Various authors have already established a link between participation and readiness for organizational change. Armenakis, Harris and Mossholder (1993) have also established a link between participation and readiness toward organizational change. Furthermore, Armenakis e.a. (1993: 681) define readiness as “organizational members’ beliefs, attitudes, and intentions regarding the extent to which changes are needed and the organizations’ capacity to successfully make those changes”.

Changes with a focus on tasks and procedures such as described in the case of FrieslandCampina, on individual and group level, correspond with the third quadrant of the framework for change of Burnes (2004: 325). This third quadrant of the framework is typified by rapid change and a small-scale transformation in a stable environment. Furthermore, approaches to management fitting with this third quadrant of the framework are a Tayloristic or Kaisen approach. According to Burnes (2004) an organisation with a more participative culture may choose for a more collaborative approach like a Kaisen initiative. In such an initiative, employees and specialists are brought together in a team. Kaizen is described by Zhuang Yang (1994) as constant and continuous improvement, which makes it long-term and evolutionary change, instead of abrupt changes. However, according Burnes (2004) the Tayloristic and Kaizen approach should be possible in a relatively speedy fashion. A participative approach to the making of new supplier management procedures corresponds with the approach of FrieslandCampina. Therefore, the influence of participation on readiness for change is part the subject of this thesis. The influence of atypical characteristics due to the merger is the other part and will be tested.

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Furthermore, multiple change processes are another aspect which may influence the effects of the participation process at an organization such as FrieslandCampina. According to Meyer and Stensaker (2007), the challenges in organizations with these multiple change processes are not the mobilization of the organization to change. The challenges in organizations with these multiple change processes are balancing daily operations with continuously implementing changes and creating visible results for the chance initiatives (Meyer and Stensaker, 2007).

These circumstances and characteristics in the case of FrieslandCampina lead to the central research question of this thesis, which is:

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Theory

In this section, a literary review will be given on the influence of participation on readiness for change and factors relating to the merger which might influence the participation process.

Readiness for change

“The reason why so many change efforts run into resistance or outright failure is usually directly traceable to their not providing for an effective unfreezing process before attempting a change induction” (Schein, 1979: 144). Furthermore, readiness for change is also referred to as unfreezing behaviour and is the first step in Lewin’s the change cycle (Backer, 1995). Therefore, the creation of readiness for change is important in an early stage of a change process. This is also the case for the creation of new supplier management procedures at FrieslandCampina. Change can occur when the readiness for change is low (Backer, 1995). However, when a low readiness for change will lead to low motivation or active resistance to change, behavioural science indicates that successful change is less likely (Backer, 1995).

Armenakis e.a. (1993: 681) reflects readiness as “organizational members’ beliefs, attitudes, and intentions regarding the extent to which changes are needed and the organizations’ capacity to successfully make those changes”. At the core of readiness for change, lies the changing of individual cognitions over a set of employees (Armenakis e.a., 1993). According to Armenakis e.a. (1993), creating readiness for change concerns bringing about changes in individual cognitions, as well as social phenomena beyond these individual cognitions. This makes the group in which employees operate a factor that influences the creation of readiness for change.

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Participation is negatively related to structural and job related uncertainty, it has a positive effect on the sense of control and it is negatively associated with psychological strain (Bordia e.a., 2004). This means that participation has a great effect on employees and their views.

The success of the implementation of organisational change is linked with the broad involvement of organisational members (Lines, 2004). This can work in various manners. Firstly, participation can lead to the successful implementation through the organisation’s perception for the need for change (Lines, 2004). Secondly, participation can lead to the successful implementation through a link from participation to goal achievement and resistance to change (Lines, 2004). And thirdly, participation can lead to the successful implementation through the relationship between participation and organisational commitment (Lines, 2004). Because this thesis only looks at the link between participation and readiness for change, these links can only be tested against the intent of the different organisational members.

In addition to these effects of participation, participation can also have communicative properties. The communicative properties of participation are especially relevant for the understanding of complex change processes (Bartunek e.a., 1996). For these changes, participation will help understanding all its nuances, the depth and the complexity of those changes (Bartunek e.a., 1996). However, the new supplier management procedures at FrieslandCampina will not qualify for the complexity meant by Bartunek e.a. (1996). On the other hand, the context of the merger in which the procedures are made might be very complex. This would mean that organisational members who participated have more knowledge and a better understanding of the new procedures and the relatively new and perhaps complex environment in which they will be used.

Because of the link between readiness for change and participation, and because of the intention to a participative approach of FrieslandCampina towards the new supplier management procedures, the concept of participation is very important for this thesis. Therefore, participation will be discussed in the next section.

Participation

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Involvement and participation by all organisational members in planning and implementing change, was argued for by supporters of organisational development (OD) and the socio-technical systems approach (Dunphy, 2000). OD is an approach to change originally based on Kurt Lewin’s work and is focussed on improving the effectiveness of humans in an organisation through participative programs for change (Burnes, 2004). The socio-technical system theory is a variant of job design where the focus has shifted from the individual job to the whole of the organisation (Burnes, 2004).

However, proponents of strategic management challenged the dominance of OD and the socio-technical systems successfully in the 1980s (Dunphy, 2000). The strategic management approach redefined the implementation of corporate strategy. Strategic management puts the driving force for change, planning of change and the execution of change firmly in with the top executive team and the CEO of an organisation (Dunphy, 2000). For the strategic management approach, participation is merely seen as useful in generating commitment, but also as a potential threat towards the effective implementation of the strategy (Dunphy, 2000). This view on participation is shared by Locke, Schweiger and Latham (1986: 65), who stated that participation is “simply a managerial technique that is appropriate only in certain situations”. Therefore, strategic management focuses on managerial control (Dunphy, 2000).

Therefore, how participation is used depends upon the faith in employees and support from these employees on the one hand. On the other hand, it depends upon the demands for control from the top management. Between these two apparently opposite views, various forms of participation can occur. To understand the use of the participation process in the case of FrieslandCampina, the forms of participation must be investigated. These forms all have different characteristics or properties. Therefore, different forms of participation will firstly be analysed.

Forms of participation

Based on an extensive literature study, Cotten e.a. (1988) describes six combinations or configurations of dimensions to describe participation in decision making. These six forms of participation are: participation in work decisions, consultative participation, short-term participation, informal participation, employee ownership and representative participation (Cotten e.a., 1988).

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participation is formal participation; it is direct participation; and it is long-term participation (Cotten e.a., 1988). Participation in work decisions focuses on the work itself and how it is organised (Cotten e.a., 1988).

Secondly, with a consultative form of participation, employees give their opinion. But employees do not have complete decision making power or veto power (Cotten e.a., 1988). Consultative participation is also a formal, direct and long-term form of participation (Cotten e.a., 1988).

Thirdly, short-term participation has a limited duration. This duration can be varying form single laboratory session and training programs for a maximum of several days (Cotten e.a., 1988). Furthermore, short-term participation is a formal and direct form of participation (Cotten e.a., 1988). However, the research on the effects of short-term participation on satisfaction and other attitudes of participants are conflicting (Cotten e.a., 1988).

Fourthly, not all participation is conducted in a formal manner. Informal participation, participation through interpersonal relationships between managers and their subordinates can also occur (Cotten e.a., 1988).

Fifthly, for employee ownership, employees have the right to participate. This makes employee ownership formal and indirect (Cotten e.a., 1988). Although employees own such organisations, they are still operated by managers and are therefore described by Cotten e.a. (1988) as an indirect form of participation.

The final form of participation, according to Cotten e.a. (1988) is representative participation. Representative participation is described by Cotten e.a. (1988) as formal and indirect. Furthermore, in relation to change, representative participation can prove to be a desired form. According to Gill and Krieger (1999) representatives, such as work councils and union representatives, are ‘agents for change’ in most of the cases. Whereas the more intensive direct participation can prove to be a barrier to the development (Gill and Krieger, 1999). Translated to the case of FrieslandCampina, this would mean that the QA employee, who is a member of the corporate workgroup making the new supplier management procedures, acts as a change agent within the QA department of the business group Cheese & Butter. Perhaps she even acts as a change agent for the whole of the business group Cheese & Butter.

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Properties of participation

Different forms of participation can be characterised by different properties. Dachler and Wilpert (1978) describe five major properties of participation. These properties are: formal-informal participation, direct-indirect participation, access to decision, decision content (importance and complexity) and social range. According to Dachler and Wilpert (1978), these are the major characteristics of participatory systems. Properties of participation are used to describe the previously described forms of participation of Cotton e.a. (1988).

Firstly, forms of participation can be characterised by their formality (Dachler and Wilpert, 1978). Legitimization for formal participation can be based on a legal basis, a contractual basis or based on management policies (Dachler and Wilpert, 1978). Furthermore, the degree of formality depends on the underlying values of the designers of participation, the goals and objectives of participation and the societal context of participation (Dachler and Wilpert, 1978).

Secondly, forms of participation can be characterised by the directness of the participation (Dachler and Wilpert, 1978). According to the theoretical frameworks, direct personal involvement of organisational members in the decision making, is the ideal the form of participation (Dachler and Wilpert, 1978). However, indirect involvement can be “thought of as an expression of compromise between pure democracy (direct participation) and autocratic social arrangements” (Dachler and Wilpert, 1978: 12). Dachler and Wilpert (1978) argue that in practice, a mixture of direct and indirect participation is used in a variety and complex combinations, due to varying contextual situations.

Thirdly, the access to participation can characterise the form of participation (Dachler and Wilpert, 1978). The access to decision making or the ability to influence organisational the members who make decisions, can also be a reflection of participation (Dachler and Wilpert, 1978).

Fourthly, forms of participation can be characterised by the social content, the importance and the complexity of the decisions (Dachler and Wilpert, 1978). According to Dachler and Wilpert (1978) these attributes of the decisions in which people participate can vary greatly for different decisions. Furthermore, this has area has largely been ignored in literature on participation, but the content of the decisions, the importance of the decision and the complexity of the decision has influence on the participation on those decisions (Dachler and Wilpert, 1978).

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involvement is relevant. Indirect participation is not included in this property. Otherwise a small group of representative participants can represent a wide social range (Dachler and Wilpert, 1978).

The participation process of making new supplier management procedures at FrieslandCampina are subject to the relatively extraordinary circumstances of a merger organisation. To gain further insight in the various aspects of the participation process at a merger organisation, such as FrieslandCampina, the influences of the merger characteristics on the participation process are studied next.

Merger Characteristics

Three characteristics may influence the participation process in the making of new supplier management process for FrieslandCampina Cheese & Butter. These characteristics are: the general complications of merging two organisations; the changes in the groups within FrieslandCampina Cheese & Butter; and the multiple change processes. These three characteristics reflect effects of the merger on three levels. On the highest level, the effects which the two merging organisations as a whole have are reflected upon. On the second level, the effects which the changes in groups of the organisation have are reflected upon. On the lowest level and on a personal level, the effects of the merger in the form of experiencing multiple change processes are reflected upon.

The influence of merging two organisations on participation

There are various characteristics by which merging organisations differ from other organisations. As stated before, FrieslandCampina is a merger of Friesland Foods and Campina. When two organisations merge, they can do so in various ways. The manner in which the two former organisations merge as a whole, can be relevant because the new supplier management procedures were made on corporate level and apply for the whole of FrieslandCampina. This analysis might give further insights in how the business group Cheese & Butter relates to the rest of the organisation and what its position is in the making of the supplier management procedures.

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Integration happens when the members of an acquired firm want to remain autonomous and independent and want to preserve their own identity and their own culture (Nahavadi and Malekzadeh, 1988). This results in trying to maintain that what makes them unique, such as most of the basic assumptions, the beliefs, the cultural elements and the organisational practices and systems (Nahavandi and Malekzadeh, 1988). On the other hand, these employees are willing to be integrated into the structure of the acquiring organisation (Nahavandi and Malekzadeh, 1988).

Assimilation happens when one organisation or group is willing give up their own identity and culture to adopt the identity and the culture of the other organisation or group (Barry, 1983, 1984 cited Nahavandi and Malekzadeh, 1988). In this case, one organisation is absorbed into the other (Nahavandi and Malekzadeh, 1988).

In the separation mode, the two organisations and their groups remain functioning separately (Nahavandi and Malekzadeh, 1988). According to Nahavandi and Malezadeh (1988), this happens when the acquired organisation members want to preserve their own culture and practices and refuse to assimilate. This will lead to a situation where the acquired organisation will function independent under the financial umbrella of a parent organisation (Nahavandi and Malekzadeh, 1988).

Deculturation involves organisational members of both former organisations losing their culture (Nahavandi and Malekzadeh, 1988). This can be accompanied with collective and individual confusion; with the feelings of alienation; with the loss of identity; and with the acculturative stress (Berry, 1983 cited Nahavandi and Malekzadeh, 1988).

The described acculturation processes might portray merging organisations as combining two groups. However, large organisations are more complex than that. Such companies consist of many different groups within the organisation. These four modes of acculturation might have a great effect on the functioning of different groups within an organisation. Therefore, they might also have a great effect on the individuals functioning within those groups.

The influence of changes in groups on participation

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change. Social phenomena and specific group dynamics occurring as a result of the merger may influence the participatory process.

Within the procurement and QA department of FrieslandCampina Cheese and Butter, faultlines may exist and may split these groups into further subgroups. "Group faultlines are hypothetical dividing lines that may split a group into subgroups based on one or more attributes” (Lau and Murnighan, 1998: 328). These faultlines can be based on demographics such as age and they can be based on non-demographic faultlines such as personal value (Lau and Murnighan, 1998). For the case of FrieslandCampina, these faultlines could be situated between employees of the two former companies of FrieslandCampina. This may even be further strengthened by geographic locations of the two former companies and their employees.

Faultlines between groups vary in strength. This is dependent upon the number of individual attributes which are apparent to the group members; the alignment of group members; and the potential for homogenous subgroups (Lau and Murnighan, 1998). Furthermore, faultlines can be a determinant of subgroup conflict, especially when a task for a group is related to a faultline of that group (Lau and Murnighan, 1998). On the effect of conflict, literature is contradicting (Jehn, 1995). Therefore, conflicts can be harmful as well as beneficial.

For the new supplier management procedures, there previously existed two sets. One set for each of the two former organisations. To make these new procedures, corporation across possible faultlines was needed. Furthermore, both sides of the possible faultines will have to give up some of their familiar ways of working to come to a new set of supplier management procedures. According to Lau and Murnighan (1998) this can be determinants of subgroup conflict. It is therefore interesting to study this possible conflict and its effects, which are uncertain.

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employee turnover. This turnover on its tern can have effects on the functioning of the groups within FrieslandCampina.

New members of established groups can change the dynamics of a group. New members can introduce new faultlines or let old faultlines resurface (Lau and Murnighan, 1998). How newcomers are absorbed into exiting groups, is dependent upon the characteristics of the existing group members and the existing faultlines. When similarities are shared between newcomers and the exiting group members, the distinction between new and old group members loses importance (Lau and Murnighan, 1998). In addition, important members can have great influence on a group. As influential group members join or on the other hand leave an existing group, the dynamics of that group can change significantly (Lau and Murnighan, 1998).

Apart from changing the dynamics of a group, loss of knowledge can occur when group members leave. For “an enormous amount of information and knowledge resides in the minds and electronic mail of key people, but this material is rarely organized in a fashion that allows for transmission to others” (Powell, 1998: 237).

In order participate, it can be reasoned that the relevant employees have to communicate and work together. This communication and cooperation might be effected by possible faultlines and conflict. Furthermore, it can be argued that certain knowledge is required to contribute in a participation process. It can be questioned if new employees possess this knowledge.

The influence of multiple change processes on participation

At FrieslandCampina, the making of the new supplier management procedures are not the only changes made. Due to the merger in 2008, many changes have been made and many further changes will be made in the future. This means that the employees of FrieslandCampina have to cope with numerous change processes at the same time.

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The merger of Friesland Foods and Campina into FrieslandCampina can be typified as episodic change. Furthermore, this means that a lot of change processes happen at the same time. Meyer and Stensaker (2007) found that organisations which are pursuing multiple change projects face challenges which differ from those described for episodic and continuous change.

Firstly, a challenge for organisations that pursue multiple changes are the stretched resources (Meyer and Stensaker, 2007). The resources of these organisations are continuously stretched in two directions. These resources are stretched because the organisation is balancing the tasks related to the changes and the daily operations (Meyer and Stensaker, 2007).

Secondly, a challenge for organisations pursuing multiple changes is the completion of change initiatives with the production of results which are visible (Meyer and Stensaker, 2007).

Because FrieslandCampina is pursuing multiple change processes at het same time, FrieslandCampina is likely to face challenges of the stretched resources and completiing change initiatives with the production of visible results.

Conceptual model

The factors discussed in this theory section, which influence participation and thereby may influence readiness for change, are summarized in a conceptual model. This model is illustrated in figure 1.

Figure 1: Conceptual Model Merger characteristics

Readiness to implement the new procedures The extent of participation

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Methodology

This thesis has the form of a case study. This is due to the small number of research subjects, a more depth than width in scope. Therefore, this qualitative research method is used. This qualitative data will be collected by conducting interviewed and open observation on site. A case study can be characterised by viewing the case as a whole. This holistic approach manifests itself in a qualitative, not in advanced structured, and open method of collecting data (Verschuren and Doorewaard, 2000).

Data collection

Due to the small number subjects, quantitative analysis is not possible for case studies (Verschuren and Doorewaard, 2000). This is in line with this case of FrieslandCampina. Therefore, this case study of FrieslandCampina is a qualitative study.

To gain the necessary depth in a case study, a labour intensive method of face-to-face interviews is often chosen (Verschuren and Doorewaard, 2000). Therefore, a face-to-face; semi-structured; and open question interviews were used for this thesis. An advantage of a face-to-face interview method is the possibility of seeing non-verbal communication (Emans, 2004). Furthermore, by standardisation of data collecting methods, the reliability of the results can be increased (‘t Hart, Boeije and Hox, 2005). Therefore, due to the use of prepared interview questions for all interviews, increases the likelihood a repetition of the interviews would yield the same results. This increases the reliability. On the other hand, the interviews have a semi-structured character. In each interview, additional questions were asked based on the answers given. This was done to gain further insight into the case. However, this does not improve the reliability.

In relation to the internal validity, the less standardised aspects of the research method can have a positive effect. Due these less standardised aspects, as it takes place in qualitative research, the researcher can observe relevant aspects. The researcher can observe this by hearing, seeing and asking questions. This adds to the internal validity of the gathered data (‘t Hart e.a., 2005).

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it was possible, interviews have been selected upon the basis of their work and their employment history to gain a balanced insight into the case. In addition, a balance has been sought between former Friesland Foods employees and former Campina employees. Therefore three of the interviewees were former Friesland Foods employees, four of interviewees were former Campina employees and one of the interviews was held with an interim employee who has been working for FrieslandCampina for a year.

The number of eight interviews is sufficient for this thesis, because it represents a high percentage of the employees of the business group Cheese & Butter who are affected by the new supplier management procedures. All of the procurement employees for the business group Cheese & Butter have been interviewed. For the central QA department of the business group Cheese & Butter, two employees who might be affected by the new supplier management procedures have not been interviewed. These were the head of the QA department and a QA officer. Both were unavailable in the given time period of this thesis.

The prepared interview questions, which have been used to guide the interviews through the necessary research subject, can be found in appendix I. These questions have been used to analyse the interviewees with regards to readiness for change, the extent participation and the three identified merger specific characteristics.

Another characteristic of a case study is that the case is studied in its natural environment (Verschuren and Doorewaard, 2000). Because this case has been studied on site, the author was able to view all the necessary documents and observe the subjects. These documents and observations will be used in addition to the interviews as an input for this thesis.

Analysis

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Results

In this section, the results of the interviews with selected members of FrieslandCampina Cheese & Butter will be given. In addition to those interviews, observations of the researcher will be used to give further insight in this case study.

Interviews were held with employees of the procurement department and the QA department. Distinctions are made in the results of the two departments, because those employees are members of different groups in the organisation. Because changes in groups have been identified as a factor to possibly influence participation, the results are viewed separate for the two departments. This gives the opportunity to compare different effects for those groups.

Readiness for change

Every employee says that they are willing to change and work according to the new corporate procurement procedures. However, this is the socially correct answer to the question. Further questions on their belief in change according the new procedures; attitude towards the new procedures; and intention to work according the new procedures gives a slightly different picture. A summary of these answers are given in table 1. The results of interviews will be further elaborated upon for the different aspects of readiness for change.

Readiness for Change at FrieslandCampina Cheese & Butter Number of interviewed employees _Procurement

department QA department Total

Belief 2 2

Neutral 1 2 3

Belief that employees will change according to

the new procedures

No belief 3 3

Positive 4 4

Neutral 3 3

Attitude towards the new procedures

Negative 1 1

Intending to 4 4

Neutral 2 2

Intention to work according to the new

procedures

Not intending to 2 2

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Belief that employees will change according to the new procedures

Firstly the answers of procurement employees will be elaborated upon. Regarding their belief that the new procedures will result in change, they all recognised a great danger of the new procedures ending up on a shelf without being used. According to the procurement employees, whether this will happen depends upon whether it will influence the rating of their performance. This was the case for the three buyers as well as the procurement manager. According to the three buyers, their performance is predominantly rated on the basis of money, such as the costs and savings they make buying products or services. Because the supplier management procedures do not directly influence these cost savings, the three buyers were classified have no belief employees will change according to the new procedures. The manager was more neutral to whether the implementation will be taken into account in rating their performance. The procurement manager told that the procurement employees will act according the new corporate management procedures if the management team gives priorities to the enforcement these procedures. Therefore, it will depend upon the priorities made by the management team. This leads to the procurement manager being classified as neutral in his belief employees will change according to the new procedures.

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Attitude towards the new procedures

As stated earlier, all procurement employees declared to be willing to act according the new procedures when they will be agreed upon by the managers of the business group Cheese & Butter. However, the three buyers declared not to know the actual content of these procedures. Because the lack of knowledge of the content of the new supplier management procedures, the three buyers were categorised as neutral in their attitude towards these new procedures. However, it must be noted that one buyer found that the coordination between procurement and QA is important and deserved more attention.

The position of the procurement manager can be viewed differently. The procurement manager is aware of the content of the new supplier management procedures and some extra responsibilities containing those procedures. This has lead to discussion between the procurement manager, the manager of the QA department and management of the business group on how to implement the new procedures. Core of this debate is demands for extra resources (personnel) in the form of FTE’s for extra responsibilities and tasks the departments might get through the new procedures. This demand for FTE’s for extra responsibilities and tasks has been made by the procurement manager. However, the procedures have described those tasks have to be done by existing buyers. This discussion and these demands can be seen as form of resisting the new supplier management procedures. Therefore, the attitude of the procurement manager toward the supplier management procedures is being classified as negative. This resistance can possibly be a result of insufficient participation and lack of buy-in for the new supplier management procedures.

For its part, QA personnel appear to have a more positive attitude toward the new procedures. All QA employees declared to be happy with the prospect of clarity on responsibilities between the QA and procurement department. Furthermore, all QA employees have trust that the supplier management procedures are good. Therefore all QA employees are categorised to have a positive attitude toward the new procedures.

Intention to work according to the new procedures

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group imply that the procurement manager is not intending to work according to the supplier management procedures. He is therefore categorised as not intending to work according to the new procedures. One other procurement employee is categorised as not intending to work according the new procedures. Although this buyer actually declared that he is intending to do so, he also declared that he generally is not up-to-date with the supplier management procedures as well as the other procedures. Because this buyer does not know the content of various procedures, he declared he is currently not to be working according to those procedures. Therefore, this buyer is categorised as not intending to work in line with the new supplier management procedures of which he also does not know the content.

Although the other two interviewed procurement employees (buyers) support their manager’s demand for extra FTE’s, they declared that they will have to do whatever is decided. Therefore, they were categorised as neutral with regards to intending to work in line with the new procedures.

QA personnel are positive in their intention to work in line with the new supplier management procedures. The QA department has taken an initiative to create a document which specifies the supplier management procedures to the circumstances and demands of the business group Cheese & Butter. This shows a serious intention to work in line with the new supplier management procedures. Furthermore, all QA employees stated to intend to work in line with the new supplier management procedures. Therefore, all QA employees are categorised as intending to work according to the new supplier management procedures. However one remark has to be made. As one QA employee stated, not all situation is the same. Therefore he states, a deviation on the procedures has to be possible in special situations. He states that in these cases, the person accountable has to be informed. Although this QA employee generally intends to work in line with the new procedures, he possibly does not intend to do so in all situations.

Participation

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As stated in the theory section and described by Cotten e.a. (1988), participation knows various forms. Therefore, participants were asked to comment on the forms of participation defined by Cotten e.a. (1988). In table 2, an overview is given of forms participation and the extent to which they apply for the procurement department and the QA department. In table 2 the distinction between the procurement department and the QA department has been made, because there is a difference between these two departments in the participation process. The most important difference is that one QA employee of the business group Cheese & Butter was a member of the corporate workgroup making the new supplier management procedures. This corporate workgroup contained no members of procurement department of the business group Cheese & Butter.

Furthermore, the QA employees are more up-to-date with the new procedures than the procurement personnel. This is because the QA department has decided to create a document which specifies the supplier management procedures toward the situation in the business group Cheese & Butter. This is a document that further specifies tasks to the responsibilities laid down by the supplier management procedures. During the creation of this document, QA employees have been asked to give feedback on this document. Strictly, this exercise is no participation in the actual

Participation in making the corporate supplier management procedures Number of interviewed employees _Procurement

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corporate supplier management procedures. However, QA personnel may have experienced this as some form of participation.

Participation in work decisions

The new supplier management procedures describe the process for supplier management. These procedures describe responsibilities, accountabilities, demanded consultations of others and demanded informing of others. All supplier management procedures contain a table where these four elements are allocated. This means that these procedures describe who does what and with who they must work together. Therefore, these procedures affect work decisions described by Cotten e.a. (1988).

A procurement employee was of the opinion that participation in work decisions, together with consultative participation and employee ownership creates a basis for these new procedures among employees. However, none of the four interviewed procurement employees participated themselves in the making of the new corporate supplier management procedures.

The influence of the new corporate procedures on their work is also confirmed by the QA employees. However, from the four interviewed QA employees only one participated in the making of the new supplier management procedures.

Consultative participation

The procurement manager views his participatory role as giving input for the corporate supplier management procedures. For this input, he predominantly looks at the responsibilities, accountabilities, demanded consultations and demanded informing. From these four elements, he gives most attention to the allocated responsibilities. However, this has not been long-term and this has not been formal. Therefore this is insufficient to be characterised as consultative participation He is therefore categorised as low on consultative participation.

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categorised as low. In addition the other two buyers were also categorised as low in consultative participation, because they were not asked for their opinion and did not give their opinion on the new supplier management procedures.

For the QA department, the QA employee who was member of the corporate workgroup told that she did try to consult with others. This employee stated that these consultations were done formally during QA meetings. Furthermore, this employee stated that attempted to consult a number of times. This would make these consultations formal, long-term and direct and therefore in line with the characteristics of consultative participation. However when she tried to discuss the subject during QA meetings, others were not prepared for that and did not react much on this subject. This QA employee stated that people were okay with everything when the supplier management procedures were discussed. However, when the finalisation of the documents came near, they started to discuss and resist some aspects. This has lead to a couple of last amendments. Because one QA employee participated in the workgroup creating supplier management procedures, she was categorised as neutral for consultative participation. The other QA employees were consulted by the QA employee that participated. Because these employees did not respond to those consultations and did not experience a high consultative participation, they are also classified as neutral.

Short-term participation

Only one of the procurement employees mentioned a form of short-term participation. According to this procurement officer: ‘there was a sort of trainings-day at which these procedures were discussed. However, this was a big setting at which it was a little noisy. Therefore, the subject past by unnoticed to a lot of people’. Because this procurement employee stated that he knew it was discussed, but the content passed by with little attention, he and the other procurement employees are categorised as low with regards to term participation. They have not experienced short-term participation.

Furthermore, the manager of the procurement department of FrieslandCampina Cheese & Butter gives little importance to short-term participation. However, the employees of the procurement department do recognise importance of short-term participation.

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term participation not that relevant. Because none of the QA employees experienced short-term participation, they are all categorised as low for short-short-term participation.

Informal participation

According to one procurement employees, a lot of informal participation takes place. After a workgroup has had an important meeting, often there will be a discussion among colleges. These informal discussions form an important input for following workgroup meetings. Because he experienced this informal participation, he is categorised as high. However, this procurement employee found it desirable to build in more formal meetings where subjects as these new procedures are discussed. In doing so, people are sharper and better prepared on the subject. Furthermore, these formal meetings would prevent such subjects passing people by unnoticed.

The manager of the procurement department on his part gives informal participation little importance. However, the input he has given with regards to the supplier management procedures has been informal. Therefore, he is also categorised as high for informal participation. The remaining two buyers did not experience this informal participation and therefore are categorised as low.

For the QA employees, two found that informal participation is very important. One of which told that informal participation happens a lot. This QA employee gives great preference to discussing subjects verbally before they are officially covered. This corresponds with this employee view that the verbal agreements between the relevant people are more important than those written down. However, this employee does find that all agreements must be documented correctly. Because this employee also experienced this informal participation for the supplier management procedures, he is therefore categorised as high with regards to informal participation. On the other hand, another QA employee does not find informal participation important with regard to readiness for change. Because this employee participated formally in the workgroup making the supplier management procedures, she has been categorised as low with regards to informal participation. The other interviewed QA employees did not experience informal participation and are therefore categorised as low for informal participation.

Employee ownership

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could have asked to play a part in the making of the supplier management procedures, they did not want to.

The procurement employees give ‘employee ownership’ in relation to readiness for change great importance. One of procurement employees gave this importance to employee ownership with a slight resentment. He views employee ownership as responsibilities put upon someone. This is a negative way of viewing employee ownership. Instead of having the power to take control, this employee sees ownership as responsibilities to be rebuked upon. On the other hand, the procurement manager of FrieslandCampina Cheese & Butter values employee ownership most strongly. According to him, ‘when people feel responsible, they are more willing to act accordingly’.

For the QA department, the QA employee who is a member of the corporate workgroup experienced employee ownership for the supplier management procedures. Therefore she was categorised as high for employee ownership. The three other QA employees did not experience ownership over the supplier management procedures. Therefore, they are categorised as low for employee ownership. Furthermore, like procurement employees, QA employees find employee ownership important in relation to readiness for change.

Representative participation

The sixth form or participation defined by Cotten e.a. (1988) is participation by representation. The corporate workgroup for making new supplier management procedures was formed by several employees of different business groups of FrieslandCampina and was under the chairmanship of the corporate centre. Furthermore, this corporate workgroup contains one member of the business group Cheese & Butter. This is the ‘QA manager Suppliers and Third Parties’.

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procurement employees having experienced representation. Therefore, the procurement employees are categorised as high for their experienced representative participation.

In addition one procurement employee related the impact of representative participation to the person representing him. ‘When your superior represents you, this is fine because he or she is responsible. But when you are represented randomly by ‘Jantje’ or ‘Pietje’, this has no meaning’.

For his part, the procurement manager feels represented by other procurement employees from different business groups and procurement employees on corporate level. These procurement employees are member of the workgroup making the supplier management procedures. He is therefore categorized as high for representative participation.

Just like the procurement employees, QA employees feel themselves represented. Unlike the procurement employees, one of the QA employees actually was a member of the workgroup which make the new supplier management procedures. Another QA employee, who worked as a QA officer for butter activities felt represented by her superior. This can be seen as a result of the fact that she only works for the QA manager Butter. Thereby, she has little interaction with the other QA managers. For his part, the QA manager for Butter does feel represented by the ‘QA manager suppliers and third parties’ who is a member of the corporate workgroup who made the corporate supplier management procedures. The remaining interviewed QA employee feels represented by the QA employee in the workgroup making the procedures as well. Because all QA employees feel represented or experiences representing others, they are all categorized as high for representative participation.

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Link of participation to readiness for change

To test a link between participation to readiness for change, the interviewed employees were asked for their opinion on the influence of the various forms of participation on readiness for change. Table 3 contains an overview of the answers given by the interviewed employees.

Link of participation to readiness for change Number of interviewed employees _Procurement

High 4 4 8

Neutral 0

Participation in workdecisions to readiness for change

Low 0

High 2 2 4

Neutral 2 2 4

Consultative participation to readiness for change

Low 0

High 2 2 4

Neutral 1 1

Short-term participation to readiness for change

Low 1 2 3

High 2 2

Neutral 1 1

Informal participation to readiness for change

Low 4 1 5

High 4 4 8

Neutral 0

Employee ownership to readiness for change

Low 0

High 0

Neutral 3 2 5

Representative participation to readinss for change

Low 1 2 3

Table 3: Participation to readiness for change

Forms of participation which are found important by the interviewed employees, were not forms of participation which were experienced by these employees. Together with a lack of readiness for change, this could confirm the link with readiness for change. However, this discrepancy between the perceived participation and the forms of participation which are found important, does not explain that the employees of the QA department have a higher readiness for change than employees of the procurement department.

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do whatever will be decided in the business group. The role of representative, who was a member of the workgroup making the new procedures and trusted by the others, could explain a higher readiness for change. On the other hand, the procurement manager who the procurement employees trust and feel represented by was no member of the workgroup. Furthermore, he resists aspects of the new procedures. This could explain a lower readiness for change of the procurement employees. The QA employees have a higher buy-in through the direct participation of one of its members, and the indirect participation by the others.

Merger characteristics

As explained in the literature section of this thesis, characteristics specific for merging organisations are likely to affect participation. FrieslandCampina is such a merger organisation and is a result of the merger between Friesland Foods and Campina.

Merging two organisations

Employees do find differences between former Friesland Foods employees and former Campina employees. All the interviewed employees fond there was a difference in organisational culture between former Friesland Foods and former Campina. Furthermore, FrieslandCampina is a merger of equals. Friesland Foods and Campina were relatively equal sizes. This leads to the situation where none of organisations was put under the umbrella of the other. Nor is one of the organisations absorbed by the other and in doing so change their culture to that other organisation. The merger of Friesland Foods and Campina is a merger where both organisations give up part of their culture to form FrieslandCampina. Therefore, this merger can be categorised as deculturation.This is perhaps best illustrated by locating the new central office in Amersfoort. This location is exactly in the middle between Meppel, where the former headquarters of Friesland Foods was, and Tilburg, where the former headquarters of Campina was located.

This relocation of FrieslandCampina has also lead to discomforts for many of the employees. The commuting time can rise to four hours per day for some of the employees. These long commutes have already leaded to several employees switching to jobs closer to their home. In addition, not all employees are very positive on the merger of the two organisations.

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Changes in Groups

For those of the business group Cheese & Butter who are affected by the new supplier management procedures, there is one prominent faultline. This faultline lies between the procurement department and the QA department. Because they are different departments, structurally they are different groups. Furthermore, the employees view themselves as different groups. Therefore they are also treated as separate groups in this thesis.

Furthermore, this faultine between the procurement and QA department is important with regards to the supplier management procedures. These procedures define the cooperation between those departments and these procedures assign tasks and responsibilities between those department.

Apart from this faultline between the two departments, there is a possibility of faultlines within the groups of the two departments. The groups are relatively new and created during the merger of Friesland Foods and Campina. This leads to the possibility of a faultline between the former members of Friesland Foods and Campina.

As has been established earlier, all employees stated that there was a difference in culture between Friesland Foods and Campina. The procurement department and QA department both contain former Friesland Foods and former Campina employees. This has lead employees to state that they experience differences in the style of working between former Friesland Foods and former Campina employees. Therefore, a faultline is present between employees of former Friesland Foods and Campina. Furthermore, an interim employee has been interviewed. That employee has no employment history with either of the former companies and is new to the organisation. This does not place him in a possible subgroup of employees of one of the former companies. However, it could be that new or interim employees form a subgroup of their own.

In table 4 an overview of the employment history of the interviewed employees is given.

Former employer of interviewed employees

_Procurement

Friesland Foods 1 2 3

Campina 2 2 4

Interim 1 0 1

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In table 5 an overview is given for the experienced faultline between former Friesland Foods and former Campina employees that were interviewed.

Experienced faultline between fromer Friesland Foods and former Campina employees

_{Former Friesland}

Foods Former Campina Interim Total

Experienced faultline

2 2 1 5

No experienced

faultline 1 2 3

Table 5:Experienced faultline on employment history

However, most who experience this faultline do not find it very strong and it apparently does not create subgroups within the two departments. Two employees, who currently do not experience the faultline, have experience it in the past. Furthermore, employees do not find that this faultline, on the basis of employment history, has an effect on participation for the creation of the supplier management procedures.

Many employees stated that they did experience differences between former Friesland Foods employees and former Campina employees. The others have stated that they have experienced this in the beginning, but now feel that they are part of one new team.

Multiple change process

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Experienced multiple change processes

_Procurement

Experienced multiple change processes 4 4 8 No experienced multiple change processes 0 0 0

Table 6: Multiple change processes

Apart from the employee who was a member of the workgroup making the new supplier management procedures, all interviewed employees stated they did not participated because of lack of time, due to multiple change processes. Therefore, the experienced multiple change processes by all of the interviewed employees, did have an effect on participation on the supplier management procedures.

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Discussion

Readiness for change has not yet been fully established at FrieslandCampina Cheese & Butter. Although some appear to be ready for change, six of the eight interviewed employees do not have all the three characteristics of readiness for change. These characteristics based on the definition of Armenakis e.a. (1993) are the belief that change will occur according to the new supplier management procedures, the attitude towards these new procedures and the intentions to change according these new procedures. There is a notable difference in readiness for change between the employees of the procurement department and the employees of the QA department. The QA department scored more positive on the three characteristics of readiness for change defined by Armenakis e.a. (1993). Therefore, the QA department appears to be more ready to change in than the procurement department.

Employees of the procurement department are not ready to change in line with the new supplier management procedures. This is shown in the neutral to negative responses toward the three characteristics of readiness for change. In addition, this lack of readiness for change is illustrated in the debate on these procedures on business group level and the demands for extra FTE’s by the procurement manager. This can be viewed as a form of resistance towards the new supplier management procedures.

The difference in readiness for change between the two departments seems to correspond with the difference in participation in the creation of the new supplier management procedures. The procurement employees of the business group Cheese & Butter have participated very little in the making of these new procedures of FrieslandCampina.

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However, this mismatch presents itself for nearly all of the employees and it does not explain a higher readiness for change among QA employees.

Although all employees experienced representative participation, there are great differences in the representative participation between the procurement department and the QA department. The procurement employees feel represented by their supervisor who was not a member of the workgroup making the new supplier management procedures. He participated by giving his input informally to other members of the workgroup making the new procedures. Furthermore, the experienced representation by the procurement department is partly in relation to the debate on business group level for the implementation of these procedures. This means that the procurement employees feel represented for their interests, but do not have a direct or indirect buy-in in the new supplier management procedures. According to Conger (2000: 100) this buy-in is “essential to most successful change efforts”. The experienced representation of the procurement department can even be seen as resistance to the new procedures by debating them and demanding extra FTE’s. Therefore the procurement manager did not fulfil a role of a change agent as expected for representative participation by Gill and Krieger (1999).

On the other hand, the representative employee of the QA department was a member of the workgroup making the new supplier management procedures. This resulted in a certain amount of buy-in for this representative and those she represented. Furthermore, her role as a representative additionally developed into a role of a change agent as expected by Gill and Krieger (1999). By acting as a change agent, this representative is likely to have added to a higher readiness for change in the QA department. These effects did not spread to the procurement department and therefore the whole business group. This is due to a strong faultline between the procurement and QA department.

This case of FrieslandCampina suggest that mere experienced participation without the representative participating extensively and taking on the role of a change agent and the accompanying buy-in, does not create a higher readiness for change. Therefore, when representative participation is used, the representative who participates for a group should take on the role of a change agent in order to create a higher readiness for change.

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by the merger as a whole and subgroups created by employment history at merger organisations. It could also be the case that participation was already so limited by multiple change processes, the effects of the merger and possible subgroups on participation had no room to manifest themselves.

Both the procurement department and the QA department experienced time constraints. The procurement department experienced the time constraints due to multiple change processes very strongly. Furthermore, they all claimed this to be the major reason for them not participating. On its part, the QA department also experienced time constraints due to multiple change processes. However, this did not impede one of the employees of this department to participate as a member of the workgroup making these new supplier management procedures. In order to create enough time for her to participate, an intern was hired. This is in line with one of the solutions of Meyer and Stensaker (2007) to hire temporary personnel create time for employees to participate in changes an organisation makes. However, these time constraints did hamper her in include others and discuss the procedures among other QA employees. Therefore, multiple change processes did have an effect on the participation process for the QA department. Because multiple change processes have a negative effect on participation, it can indirectly influence the readiness for change.

Choosing for the form of representative participation is a logic one to cope with the time constraints due to multiple change processes. Due to the time constraints as a result of the multiple change processes, as described by Meyer and Stensaker (2007) and experienced by all interviewed members of FrieslandCampina, more intensive forms of participation are unfitting for a case with these merger characteristics.

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Recommendations

To create a higher readiness for change for the procurement department, the QA department and the procurement department need to agree on how to implement the new supplier management procedures. Furthermore, to increase that readiness for change, the procurement manager should take on a role of a change agent. In order for him to take on the role of a change agent, he should participate in the decisions on implementation of the new supplier management procedures. However, this participation is no guarantee for him to take on the role of change agent. And because the procedures have already been finished, the room for making decisions is limited.