Leading Organizational Change: Dixons Group’ Case

Introduction

In the modern world, every organization needs at least some change to enhance its productivity and goal achievement. Since the world is changing very fast, every organization or institution, whether for profit or non-profit, needs to fit in a highly dynamic business, social, cultural and technological environment (Greenwood & Hinings 1996).

According to Coch, and French (2009), organizational change is a planned effort with the purpose of improving an organization’s capacity to ‘get the work done’ and serve its clients, market or people with optimum results. A number of theories have been developed with the aim of explaining and describing ‘leading change’ or change management. In this paper, some theories and models are reviewed. In addition, the paper attempts to apply some of these theories in the case of Dixon Group, a British multinational that deals with consumer electronics.

Review of literature

What is organizational change?

Several scholars and institutions have attempted to develop a number of approaches to the definition of change. Currently, it is agreed that organizational change concerns the efforts by organizational leaders in helping their institutions adapt to new environments. New environments are associated with a number of aspects such as economic, social, cultural, business and technological environment.

Adapting to these aspects will help the company avoid threats and to seize the opportunities arising from organizational change (Dunphy 2008). According to Kotter’s model, organizational change is a common thread that affects or runs through any organization, regardless of their type, size, industry, specialization and age. With a fast changing world, it has become evident that every organization must adapt to the changing environment in order to achieve its objectives.

Apart from organizational change, change management and change leadership are important aspects that have emerged within the last few decades. Change management encompasses a wide range of activities that organizational leaders must implement, enhance and maintain. These include such tasks as planning, coordinating, controlling executing and monitoring organizational change that affect the industry’s work, performance, goals and objectives. According to Wright (2010), change is a critical aspect of any business organization. The main role of organizational change is ensuring that an organization runs continuously in consistence with the changing business, technological and social environment (Tourish & Pinnington2012).

It aims at providing an organization with the ability to avoid or evade threats posed by dynamic nature of the business and socioeconomic environment, while at the same time tapping any opportunity that these dynamics present. For instance, every year, the world experiences change in strategies, services as well as technologies, which require individuals, companies and societies to adapt in order to fit in the changing environment (Greenwood & Hinings 2009). For example, technological change in the last two decades has proved that organizational and social models and strategies that were in use in the 1980s have changed significantly with an increasing need to apply these technologies (Stone, Russell & Patterson 2011).

Theoretical models of organizational change

In his book “Organizational change, theory and practice’, the renowned author Burke (2010), attempts to provide a comprehensive framework for understanding the term ‘change’ from an organizational perspective. In this book, the author outlines a vast array of theories and models on organizational change, which have become important in both practice and scholarly analysis of organizational projects that aim at producing effective and positive change (Cummings & Worley 2009). Burke’s arguments are based on an in-depth analysis of Lewin’s model, with application of modern schools of thought and evidence from practice (Burke & Litwin 2011). Thus, it is important to review some of the pioneer models and theories of organizational change as proposed by scholars such as Lewin, Kotter and others.

According to Wolf, Boland and Aukerman (2012), change is performed through programmed interventions in the modern processes in organizations. The author further notes that these organizational interventions are grounded behavioral sciences. According to Bennis and Thomas (2012) and Beer and Walton (2010), the central issues and activities associated with every form of organizational change are planning and systematic following of each sequential stage of change process. It is worth noting that the sequential path approach to the process of change is one of the main aspects that have been addressed intensively in the research work by Kurt Lewin (Cabanis-Brewin 2011).

In his work on group dynamics and change, Lewin one of the most studied and appreciated models of organization change. Lewin’s key theme in his model is the idea that changes at the psychological level is a long process, which he calls “Journey” (March 2010). He attempts to show that change is not a simple step or process, but a long process that involves various stages, tasks and activities. In his model, Lewin proposed a model based on a three-stage theory, which is known as Unfreeze, Change and Refreeze hypothesis (Beer, Eisenstat & Spector 2008). The ‘unfreeze’ state is the first step and involves transition of people from the state of “being unready to change” to a new process in which everyone is ready and willing to accept and implement change (Eisenbach, Watson & Pillai 2009).

The organization needs to change by freezing the equilibrium and breaking the prevailing stability to ensure that the current infective practices are “unlearned” while new ones are considered (Nadler & Tushman 2008). According to Lewin’s model, this step involves breaking open the existing self-satisfaction or gratification shell. It also involves removing the “self-righteousness” aspects from organizational culture, but it is likely to cause emotional stir up. According to Yukl (2011), this process of unfreezing involves breaking down the ‘status quo’ and creating room for a new way of practices. Yukl (2011) argues that the practice perspective of this step is to create the desired environment in an organization, which can facilitate the occurrence of change so that individuals can open their minds to allow new ideas (Roloff 2008).

Lewin’s second step, transition, involves making the people move towards change. It involves creating motivation to learn and accept new ideas, but not necessarily through controlling or predicting the direction (Long & Spurlock 2008). It ensures that individuals and groups move towards a set of behaviors that are acceptable within the current business dynamics. The third step in Lewin’s model, known as the refreezing model, involves stabilization of the individuals or group at a new state of equilibrium (Graetz & Smith 2010). The state is quasi-stationary. It is an important step because it allows individuals to adapt and apply new behaviors, which are not affected by regression (Keeley 2009).

John Kotter, a professor at Harvard School of Business, is considered the father of modern theories of change management. In the book “Leading Change, Kotter proposed an eight-step model of change that has been a major subject in academics and practice. In the first step, an organization must create urgency, which instills a sense that change is needed. Secondly, Kotter suggests that one must form a powerful coalition by convincing individuals and groups that change is an urgent need. It is followed by creating a clear vision for change in the organization, which helps individuals and groups understand the need for change (Katz & Kahn 2008). Once created, the vision is comminuted to the target groups or individuals. Obstacles must be removed in the fifth step.

Since most of the groups and individuals have already seen and understood the need for change, a number of obstacles hinder their involvement (Armenakis & Bedeian 2009). They must be removed. Kotter then suggests that creating short-term wins through motivation through success is likely to draw various individuals and groups into the change process (Gill, Levine & Pitt 2012). In addition, he argues that most change projects do not succeed because most organizational leaders tend to declare victory prematurely (Littau, Jujagiri & Adlbrecht 2010). Thus, one should be building on the change that has been implemented, even after the short-term wins. Finally, the organizational leaders are required to anchor the change in the company’s corporate cultures that every member follows the change, including new entrants.

Applying Leadership in organizational change: How did Change leadership find solutions at Dixons?

Dixons Group is the largest retailer of consumer electronics in the UK and one of the largest in Europe. It has a number of companies operating under it, including Curry’s, PC World, Curry’s Digital, Dixon Travel, Kotsovolos and Ekjob. It has more than 500 outlets in the UK alone and more than 300 in other parts of Europe.

A few years ago, the company was faced with a number of problems, especially due to change in technology and customer buying behavior associated with modernization, technological change and dynamisms in social and business environment. For instance, the company saw the need to diversify its markets, operations and activities in the euro region. It also wanted to improve its products and services to meet the demands for high and dynamic technology. It was clear that the business environment was quickly changing.

It was also evident that the company needed immediate strategies to adapt to the changing business and social developments and changes, else it moves out of business. Thus, two major alternatives were present. First, it has the option of going it alone and expanding internally, which required strategies to expand internally. Secondly, it had the option of external expansion, which required it to ensure that it acquired new business aspects to improve the overall effectiveness of its operations. The company went for a relatively new option that included elements of both internal and external expansion.

It involved internal development aspects such as the increase in the number of Dixon stores as well as external development elements such as acquisitions (Dolan & Garcia 2012). In particular, the company successfully acquired a number of organizations, including its former rivals in business. For example, the acquisition of Curry’s, PC World and Mastercare provides evidence of the group’s intensity of strategic decisions to enhance its position in the market place, performance and change implementation in business. It was also seeking to evade some of the risks and threats associated with technological and social dynamism. For example, it was clear that Dixons was not in a position to match or compete with the PC World in electronic innovation and technology. Thus, acquiring the company and its potential was necessary to evade these risks and threats.

In achieving this, the company ensured that the managers, partners, stakeholders, employees and customers were part of the new change. In particular, it convinced the line and unit leaders and their subjects on the need for change in the business practice and work. Thus, the company’s situation and solution to the problems provide a good example of how corporate leaders can employ various strategies in change management and leadership to obtain quality results.

Analysis of the case study: How Dixons Group applied the theories of change management

As organizational change became important in achieving competitiveness in a changing business and technological environment, a number of scholars carried out intensive work to provide models and explanations of change and change management (Whysall 2000). Currently, a number of models attempt to classify change into various categories depending on a number of factors.

Apart from the Lewis and Kotter models discussed above, a number of other theories and models have emerged to explain how change management and leadership takes place within successive organizations such as Dixons. For instance, Kolb developed a model that attempts to simplify the change management into four stages (Gersick 2001). It involves a circular lifecycle that incorporates thinking, theorizing, testing the changing. In this case, the organizational leaders tend to view the current problem and attempt to think how they can use their knowledge and experience to find solutions.

Here, they tend to ‘Thinking’ about the problem by asking questions such as ‘why’, ‘how’, ‘which’ and ‘when’. In the ‘theoretising’ stage, the leaders tend to have some options for implementing change or new strategies to solve the problem. They attempt to find “What” within their minds. Then, they enter the testing stage that aims at testing some of the chosen options to find their worthiness or capacity to solve the problem. They discover the ‘how’ of their choices. After implementation, the leaders tend to look at the outcomes by looking at the short-term outcomes or wins against short-term losses.

At Dixons, the options of going alone and implementing internal growth or going for external growth through acquisitions posed serious challenges to Kalms and his team. It is clear that the company leadership wanted some change. They wanted to cope with the problems posed by technological dynamism. Thus, they made an additional theory- using a mixed growth model would produce better results than going for one of the presented solutions (Sarros, Cooper & Santora 2008). This theory was backed with evidence from practice and theory, given that it would allow the company to test the short-term wins of each element from both options.

According to John Fisher’s model, organizational leaders tend to assume the common behaviors that an individual expresses when undergoing testing moments in life, which need adequate measures and strategies to solve. The theory follows the death and dying model developed by Kubler-Ross in 1970s (Hannan & Freeman 2008). In Fisher’s model, a challenging problem presents a major psychological problem, which causes anxiety.

A person wonders what to do or evade the problem. After some possible solutions are obtained, but within the minds, an individual develops some happiness, but is soon followed by fear when the actions are taken to solve the problem. In this case, a person faces the threat of failure. Once completed, people tend to develop a sense of guilt, especially of the short-term results are not yet available. This leads to a state of depression. However, there is a gradual acceptance, especially if the process has failed to provide short-term wins. Nevertheless, whether there are wins or loses, a person finally moves forward.

At Dixons, one cannot tell whether Kalms and his team went through these stages. Nevertheless, it is evident that the company leadership had come to a pint at which the thought of taking risks was a major problem. Possibly, Kalms and his team were aware that their actions would cause either heavy losses or long-term benefits to the company. Human behavior patterns developed over the last five decades provide evidence that most people undergo these stages, especially when coping with serious problems. Finding a solution involves threats of failure, psychological involvement and possibility of walking away from the situation (Crawford 2008). Nevertheless, individuals tend to keep trying until there is success or solution is found. This must have been the situation at Dixons.

A number of theories have shown that change management and process of transition require the role of an individual acting as the sponsor or change agent. Change becomes possible where sponsors or agents acting as mentors provide guidance and leadership in implementing change. According to Bass and Steidlmeier (2009), the sponsor is responsible for building consensus with teams in an organization in order to help individuals see the problem for a common perspective.

In addition, the sponsor provides support in terms of financial, verbal and equipment. This also includes ideas and communication of vision. Sponsors also represent change at all levels. They also facilitate communication between the management and staff or subordinates, which allows both parties to understand each other. In addition, sponsors incorporate performance objectives using key measures, recognition and rewards to best performers, which motivate individuals to accept and implement change.

At Dixons, some individuals such as Sir Stanley Kalms and his team acted as sponsors. Although the company did not attempt to hire external or internal sponsors, the company’s top leadership attempted to bring together their subordinates, especially line managers, to communicate their vision about the expansion projects such as acquisition and establishment of additional outlets. Kalms and his team were responsible for the development of vision and sponsoring task teams to explore their potentials and threats posed by both external and internal growth.

The technology of leading sustainable change in an organization is an important aspect of change leadership, which is also applicable in the Dixon case. Theoretically, it involves three stages- coming to grips with the issue, working through change and attaining and sustaining improvement. In each of the three stages, individuals involve three aspects in taking tasks- the mindset, motivation (emotional dynamics) and behavior expression (Lok & Crawford 2009).

When coming into grips with the problem, individuals tend to use their mindset component to gather data and confront myths and beliefs. The emotional component increases dissatisfaction but increases confidence (Denis, Lamothe & Langley 2011). The expressed behaviors include formation of teams to gather data, discussion of the problem and assessment of individual readiness to tackle the problem. When working through change in the second step, individuals tend to use their mindset in creating visions, understanding the problem and communication the purposes and potential benefits.

The emotional component tends to hold reality check meetings within an individual mind and heart and assess losses and gains (Beerel 2009). The expressed behavior set includes development of new leadership profiles, evaluation of management levels and involvement of subordinates. It also involves rewarding of successes and driving behavior change. In “attaining and sustaining improvement” stage, the leader tends to update the desired teamwork (Dyer 2010). It is also involved in creating forums for continuous learning and feedback and articulating questions about the benefits of change. The emotional component tends to celebrate success. The expressed behavior set includes rewarding for success, training of new entrants, dealing with feedbacks. In addition, it involves coaching individuals (Kipley & Lewis 2008).

Conclusion

In the case of Dixons, some aspects of this model are observable, though not at all stages. For instance, the need for new strategies to enhance growth and development presented a major problem to the corporation leaders. In their first stages, leaders at Dixons were coming to grips with the problem. The idea was to gather data about the market and possible solutions, including the impact and process of external and internal growth (Kanter 2009). They were also attempting to use this data to confront myths such as the perceive benefits and risks of acquisition and external growth, including the possibility of losing out clients. In addition, they were also assessing their readiness to take options, either by external or internal growth.

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