Executive Summary
This report describes a case study of change management that occurred in Vodafone Qatar in 2018. The change occurred as a result of the poor financial performance of the company since its establishment. After years of failure and the start of Qatar’s blockade, Vodafone sold off its shares to Qatar Foundation, which initiated a culture change. The new owners of the business identified the problems and addressed them systematically using an appropriate change model, outstanding HR management, and exquisite leadership.
This report discusses the change under the lenses of Lewin’s Theory of Planned Change and Lewin’s Force Field Model. In particular, drivers for change and restraining forces were identified using external and internal analysis. After that, the Force Field model was applied to demonstrate the interaction between these models.
The analysis of the role of leadership and HR management revealed that communication practices were the key to reducing the resistance to change. Moreover, a clear understanding of the customs of the company and the influence of the national culture allowed the change management team to ensure the long-term success of Vodafone Qatar.
Introduction
The report aimed at analysing the organisational culture change that was conducted in Vodafone Qatar in 2018. After its establishment in 2009, the company experienced financial losses until 2018, which resulted in selling off Vodafone’s shares to Qatar Foundation (Holton, 2018). As a result, a significant culture change was implemented, which led to improvements in the financial performance of the company.
The culture change discussed in this paper allowed to identify the weaknesses of the current corporate culture and allow improvement on levels of operations. The new corporate culture was consistent with the company’s vision to be “a globally recognised brand with a deep understanding of the local market” (Vodafone Qatar, 2019, p.12). Additionally, the culture change was in line with Qatar Vision 2030, which allowed the government’s assistance and guidance.
Several objectives were identified to achieve the purpose of this report:
- Discuss the concepts of organisational change and change management.
- Describe organisational culture change in Vodafone Qatar.
- Conduct environmental analysis of the organisation.
- Assess the change process in light of change theories.
- Explain change outcomes.
This paper discusses the change based on Lewin’s Force Field Model and Lewin’s Theory of Change.
Background Information
Company Description
Since its establishment, the company has been known to deliver great value to its customers in Qatar. By 2018, the company had more than 1.4 million active customers that used a state-of-the-art network (Vodafone Qatar, 2019). In 2021, the company reported having more than 1.9 active customers, which demonstrates significant growth (Vodafone Qatar, 2022). Since 2019, all the sim-cards of Vodafone Qatar are 5G-ready, and the official stores of Vodafone Qatar sell several options of 5G-ready phones. Since 2018, 94% of Vodafone Qatar’s shareholders have been residents of Qatar, and the controlling interest of the company belongs to the government agencies. The company has a paid-up capital of QR 4.227 billion with more than 31,000 shareholders (Vodafone Qatar, 2019).
In 2018, the company’s mission was “to inspire everyone to live a better today and build a better tomorrow” (Vodafone Qatar, 2019, p.13). The company declared itself the most innovative digital company in Qatar. In the same year, the company declared a first-ever profitable year with 118 million QR in net profit (Vodafone Qatar, 2019). Despite the continuous blockade and the COVID-19 pandemic, the company continued to grow its profits in 2021, as it declared a net profit of 327 million QR (Vodafone Qatar, 2022). Thus, the company made significant changes in 2018, which resulted in acquiring a significant competitive advantage.
Change Description
Vodafone Qatar experienced a significant culture change, in 2018, along with several other changes that allowed the company to become profitable. After the company’s shares were purchased by Qatar Foundation, several crucial steps were made that created a platform for culture change. In particular, the company reduced its share capital from 8.454 billion QR to 4.227 billion QR (Vodafone Qatar, 2019). This allowed the company to extinguish the accumulated losses and start planning for the future. Additionally, the company prolonged its licence for 40 years, which allowed reducing annual amortisation costs from 403 million QR to 84 million QR (Vodafone Qatar, 2019). These changes led to swift results, allowing the company to focus on culture change.
The culture was described in the CARE initiative, which stood for Confident connection, Always receiving excellent value, Rewarding for customer loyalty and Easily accessing support. The company implemented customer-centric training and development programmes to promote CARE values. Additionally, the company put increased focus on innovation by investing in high-end analytics and a pipeline of innovative products. The centre of the company’s innovative endeavours was the adoption of 5G technology. The change was designed to be in accord with Qatar’s National Vision 2030. Along with the focus on customers, the change focused on employees. In particular, the change aimed at increasing personal competition among employees and eradicating discrimination along with several other changes. The company also started a Discover Graduate programme, which allowed to improve the company’s talent pipeline.
Discussion of Concepts of Change Management
This report focuses on three concepts that are crucial for understanding, including organisational change, change management, and workplace culture. Even though these concepts are very broad, this report will briefly introduce them to ensure the reader has a clear understanding of the context.
Above, it is crucial to explain the concept of organisational change. Bejinariu et al. (2017) define organisational change as “change in organisational structure, its system/sub-systems, employees and relation of between them in a planned or non-planned way” (p.322). Burnes (2005) differentiates between managed change within an organisation, which is described and implemented by the management team, and spontaneous self-organised change that is independent of the efforts of the managing personnel. All the companies experience constant change even though they may not be aware of the changes. However, all companies should be interested in managing change, as, without control, change may lead to unpredictable results, which may not benefit the firm.
Change management is a collective term that includes all the methods, tools, and techniques used to control organisational change. Moran and Brightman (2001) define change management as “the process of continually renewing an organisation’s direction, structure, and capabilities to serve the ever-changing needs of external and internal customers” (p.111). Change management usually includes all the ideas the company has to control the employees’ behaviour and business process to ensure that the desired outcome is achieved at the lowest possible cost in the shortest possible time. Change management is closely connected to project management, as every planned change may be seen as a project (Paton and McCalman, 2008).
Thus, project management tools are applicable to change management with some limitations. A change management project is usually guided by a theoretical framework specific to change management. There are numerous theoretical frameworks that are sued for managing change, including Lewin’s theory of change, Kotter’s eight-step model, and the ADKAR model (McCabe, 2020). The company utilised Lewin’s change model, as it appears to be the most reliable approach.
Workplace culture is a complicated concept that can be explained in a wide variety of ways. In general, workplace culture is understood as a collection of values, artefacts, behaviours, and underlying assumptions within an organisation (Sveningsson and Alvesson, 2015). Workplace culture is crucial for the success of a company, as it is directly connected to the company’s financial performance. For instance, Denison (1990) stated that the company’s competitive advantage is closely connected to how much the values are shared within a company. Workplace culture is not static, which implies that it changes every day. Therefore, it needs to be controlled, as it may change in an undesirable direction.
Organisational Structure
Organisational structure is of extreme importance to the success of change projects, as they help to identify the hierarchy of power within the project (Sandermoen, 2017). Organisational structure is usually represented in an organisational chart that defines the roles of different employees in the decision-making process (Sandermoen, 2017). Additionally, the organisational structure describes the responsibilities and employees and visualises the subordination within the organisation.
There are several theoretical approaches towards organisational structure that can be divided into four basic groups, including the classical theory, the neo-classical theory, the decision-making model, and the systems’ approach (Peltonen, 2016). The classical model focused on clear description of responsibilities of the employees in the organisational structure and the relationships between them (Peltonen, 2016).
In other words, the classical theory believed that maximum efficiency in the organisation power structure can be achieved by identifying the crucial roles that can facilitate the management of an organisation and building strong adequate relationships between those roles (Peltonen, 2016). However, the classical theory is impersonal, as it does not take into consideration the talents and preferences of the workforce. Instead, it believes that HR managers should look for employees suitable for the identified roles. The neo-classical theory is more conscious of the employees. The neo-classical theory acknowledges that the human factor affects the organisational structure, as people have unique sets of talents and needs that can by either exploited or ignored by the organisational structure (Peltonen, 2016).
According to the decision-making model, the organisational structure of a company should depend on the decision-making points (Sandermoen, 2017). In other words, the key characteristic of every role in the organisational structure should be the decisions made by the employee (Sandermoen, 2017). The systems theory views an organisational as a dynamic entity. The organisational structure, is dependent on a large variety of inter-dependent internal and external variables. Therefore, the organisational structure is not a static matter and it should change according to the changes in the external and internal environments to preserve efficiency (Peltonen, 2016). Thus, the system’s approach believes that organisational structure should be adaptive. The organisational structure of Vodafone Qatar is provided in Figure 1 below.
The analysis of the organisational structure of Vodafone Qatar demonstrates that it uses the classical theory. The central roles defined in the organisational structure did not change, even though some people in the organisational structure were replaced with others after the change was implemented. The company was not successful financially before the change, and changes in the organisational structure may have positively affected the company’s performance. However, the new management decided that the was no need to alter the organisational structure, as it remained functional.
The organisational structure of the project, however, was more likely to be based on the neo-classical approach. Figure 2 below demonstrates a simplified organisational culture of the change management team derived from the description of change.
This organisational structure demonstrates that the roles were described based on the talents of the employees. In particular, the stakeholder manager was a talented communications manager. As a result, two functions were united in one position which supported the success of change.
Driving and Restraining Forces of Change
Drivers for Change
According to Lewin’s Force Field model, the identification of drivers for change is crucial to managing change effectively. There were internal and external drivers of change that affected the company’s decision to indulge in culture change. PEST analysis was conducted to assess external drivers for change. The PEST analysis is provided in Table 1 below.
In addition to the external drivers identified above, tense competition should be mentioned. Even though Vodafone Qatar operated in an oligopoly market with only Ooredoo as a competitor, Vodafone Qatar experienced significant pressure from the competitor, as it was ahead in everything, including coverage, customer service, and quality of connection. The only advantage of Vodafone was the pricing policy, which was one of the reasons for the company’s low gross profit margin (Vodafone Qatar, 2019).
There were also some internal drivers that were pushing for change. The central driver for change was the company’s inability to make profit since the company’s launch. The parent company sold all its shares to a Qatari organisation, and the new leadership team was trying to do their best to ensure that the company went over its financial problem. After the initial measures were implemented, such as reduction of the share capital and prolonging the license, a culture change was needed to sustain the financial success. Other internal drivers of change included growing dissatisfaction of shareholders with the corporate governance, declining performance of the company in the international arena, and the growing dissatisfaction of customers.
Restraining Forces
Several factors were identified that resisted change. First, the corporate culture of the company did not appreciate innovation. In particular, the organisational culture was very deeply connected with Qatar’s national culture. According to the theory of Hofstede’s cultural dimensions, Qatari culture is associated with high uncertainty avoidance and strong influence of collectivism (Hofstede Insights, no date). As a result, the company’s employees resisted any change due to the fear of ambiguity. Additionally, the tendency towards collectivism resulted in low individual competition among employees. As a result, the performance of employees was low, and they did not want to change.
Another significant factor that contributed to resistance to change is the financial risk associated with the change. The endeavour required significant investments, and the results were not guaranteed. Moreover, since the company was already struggling with trying to stay profitable, such a significant investment that was not immediately associated with increased profits was a significant risk to the company. Thus, stakeholders were worried about investing in the matter.
Force Field Application
Lewin’s theory is a framework that explains the decision-making process. The model assumes that there are two types of forces, including resisting or restraining forces and driving forces (Lewin, 2013). According to the theory, the current state of things is stable because the driving forces are weaker than the restraining forces (Lewin, 2013). However, when the driving forces become stronger than the restraining forces, change happens. Thus, the aim of a change manager is to increase the strength and the number of driving forces and decrease the strength and the number of restraining forces. The weaker the resistance, the more likely the change is expected to succeed.
The Force Field model requires to list all the restraining and driving forces and assigning scores. Figure 1 below provides Lewin’s Force Field analysis for this case. All the drivers for change were listed on the left side, all the drivers against change were listed on the right side and scores were assigned. The sum of scores on the left is 35, while the sum of scores on the right is 26, which implies that the drivers for change were stronger in 2018 before the change was implemented. Since the drivers for change were stronger than the restraining forces, the change process was initiated.
Defining Success Factors
Role of Leadership
One of the critical success factors of change was leadership. First, the new governance addressed one of the central drivers against change, which was the financial uncertainty factor. After the leaders took care of the financial problem, the resistance to change decreased significantly, and change was implemented.
The success of change may be explained by the leaders’ use of change theory. The analysis of the change process revealed that it closely followed Lewin’s Theory of Change. This theory is one of the most frequently used frameworks in change management. According to the theory, all changes come through three phases, including unfreezing, changing, and refreezing (Shirey, 2013). During the first stage, the change manager aims at shaking the old ways of doing things using various techniques. These techniques usually include spreading the knowledge concerning the ineffectiveness of the current processes. Additionally, managers build a vision of a better future if the change is accepted and share this vision with the stakeholders. As soon all the stakeholders start to realise that the current practices are ineffective, the change manager can move to the second phase.
The second phase includes all the activities associated with change. This may include planning, implementing new procedures, introducing new quality measures, etc. This phase also includes assessing the new changes and making necessary corrections to ensure the best performance. The success factors of the second stage include wide and clear communication, empowering the stakeholders, and involving others (Shirey, 2013). The second stage is ended when all the activities are finished, and the organisation starts to operate in a new way.
The last stage aims at sustaining the achieved success. This may be done by tying the change to the workplace culture, creating new documents that regulate activities, and offering training and support to all the stakeholders. Additionally, the refreezing stage also includes celebrating the success of the change process, which allows for marking the ending of the project.
During the unfreezing stage, the leaders disseminated information about the cultural problems inside the company. In particular, the change managers demonstrated that the financial problems were partially associated with the organisation’s culture. The leaders drew attention to a decreased focus on the customers’ needs, which affected sales and employee satisfaction. The change leaders aroused dissatisfaction with the current practices, which was crucial for the unfreezing stage. Additionally, the leaders ensured to create a clear vision of the future after the change management. The leaders described the CARE initiative in detail and introduced new benefits for the employees in case improved individual performance. This encouraged the stakeholders to want the culture to change to the state described by the leaders.
During the change phase, new values were established, the change plan created, and the project implemented. The leaders communicated with all the stakeholders carefully to encourage active participation. Additionally, the leaders empowered and motivated all the employees to ensure that the final objectives were achieved. Finally, during the refreezing stage, the leaders assessed all the results, shared the outcomes, and documented the new norms to embed them in the workplace culture. The analysis of the change process according to Lewin’s theory is provided in Figure 2 below.
In summary, leadership was a success factor because the change managers utilised an appropriate change theory to ensure its success, communicated effectively with all the stakeholders, and controlled the implementation process.
Role of HR Management
Another critical factor that affected the success of change was adequate HR management. The Force Field analysis revealed that the central restraining force was the resistance of employees. The HR managers conducted an assessment of factors that affected the resistance to change and addressed these factors. According to Gaylor (2001), there are five central factors that affect resistance to change. They include participation in the change process, trust in management, careful communication, quality of provided information to employees, and level of competence of change leaders. Del Val and Fuentes (2003) mentioned that communication barriers, strong disagreement with the source of the problem, and a reactive mindset are the sources of resistance. Del Val and Fuentes (2003) also stated that perceived personal benefits and benefits for the company were significant factors that affected resistance to change.
The HR managers ensured that resistance of the employees was minimal. HR management focused on addressing the uncertainty avoidance of employees, which allowed to negate the reactive mindset. The employees were ensured that their current status would not be affected significantly. Moreover, the HR managers ensured that the change process was communicated effectively so that the employees had a clear idea of what was happening. The employees were encouraged to co-create change, which made them feel that culture change was their own project. In other words, HR managers allow the employees to participate in the change process, which is crucial, according to Gaylor (2001).
Another crucial factor that contributed to the success of change was ensuring that all the employees understood the urge for change. All the employees were aware that the source of the problem was the absence of an appropriate organisational culture, which negatively affected the profit margins of the company. HR management helped to ensure that the wide majority of employees understood that becoming customer-centric was the key to improvement and long-term success. The HR management team utilised the principles of strategic human resource management to decrease resistance from the employees.
Finally, HR managers monitored the needs of employees and kept them satisfied throughout the change process. According to stakeholder matrix, employees are the key stakeholders may be considered key stakeholders in some change management projects (Meredith and Mantel, 2011). As a result, employees may have both high interest and high influence on the success of the project. Therefore, according to the principles of stakeholder Mendelow’s matrix, employees needed to be managed closely to ensure that they do not becomes a significant restraining force. The HR department of Vodafone Qatar acknowledged the matter and acted accordingly to ensure the support of employees. However, it should be mentioned that the HR management team focused only on the key employees. Withdrawal of key employees may have had a significant negative impact on the success of the project. All other employees were kept satisfied, as they had low power to affect the success of the project.
International Management and Cultural Perspective
International management has become a matter of increased interest for Qatari organisation in recent years due to globalisation. According to PSA (2017), 88.4% of the Qatari population reported to be non-Qatari in origin, which implies that the majority of Qatari workforce is culturally diverse. According to Luthans and Doh (2018), when managing culturally diverse groups, leaders need to understand that representatives of different cultures may have difficulties communicating with each other due to differences in values, traditions, accepted behaviours, and underlying assumptions. Therefore, using the principles of international change management is central for leading the company to success.
The principles of international management are based on the ideas of cross-cultural management, which acknowledge the cultural differences of the workforce and the customers (Luthans and Doh, 2018). Instead of focusing on the negation of negative aspects of cultural diversity in the workplace, such as problems with communication and increased number of conflicts based on the cultural differences, the principles of international management aim at benefiting from cultural diversity (Luthans and Doh, 2018). Cultural diversity in the workplace is associated with increased ability of a company to serve its culturally diverse customers and innovation (Luthans and Doh, 2018). However, such an effect can be achieved only if cutlrual diversity is managed effectively (Luthans and Doh, 2018). Before the change was implemented, the management of Vodafone Qatar made efforts in taking advantage of cultural diversity; however, those attempts were ineffective.
Before 2018, the company management understood the company had a diverse workforce; however, it did not realise which cultures were present in the company. In other words, before change was implemented, top managers of Vodafone Qatar assumed that the cultural composition of employees in Vodafone Qatar was similar to that in Europe. The company leaders failed to adapt the communication patterns for the employees of Vodafone Qatar, which were Arab, Indian, Nepali, and Filipino. Arab (Qatari) national culture had the most influence on the corporate culture, as it was the national culture of the host.
Before the change was implemented, Vodafone Qatar was directed from outside the country. The managers of Vodafone’s central office were unaware of the cultural identities of the Qatari people. According to Hofstede’s cultural dimensions, people with the Qatari culture have a tendency toward collectivism, strict hierarchy, and traditionalism (Hofstede’s Insights, no date). The central office of Vodafone was unaware of such problems, and they tried to manage Vodafone Qatar similar to all the other subsidiaries. After Qatar Foundation bought the shares from Vodafone, the problems were acknowledged and addressed. Innovation and individual competition became the central driving forces of the company’s success. As a result, by 2021, Vodafone Qatar started to expand and perform well in the international arena (Vodafone Qatar, 2022). Thus, the company benefited from culture change, as the change affected the company’s bottom line.
The change modified the communication patterns within the company. In particular, the change encouraged active participation of employees in the decision-making process. Additionally, the change promoted the principle of open communication among employees. The idea of open communication is associated with employees being able to share their opinions to the leaders without the fear of ridicule. Moreover, the change in Vodafone Qatar encouraged leaders to listen to their employees and try attend to the employees needs to keep them satisfied.
Conclusion
Change happens all the time, regardless of whether the managers want it or not. Organisational change is a reaction to quickly changing external and internal environments. The case study presented in the paper demonstrated how a controlled change could help to improve the company’s financial performance and ensure competitive advantage in the long run. The keys to success were an in-depth understanding of the problem, a clear vision of the future, excellent planning according to a selected theoretical context, strategic HR management, and strong leadership.
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