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International Power Company’s Organizational Behavior and Change Management

Introduction

International Power Global Developments is a private company. Keeping the current advancements of the world in mind, there is a need to understand the requirement of a horizontal/flat structure. Vertical hierarchies were very common in olden days, but with passage of time, more team based cultures are being explored. With increasing uncertainty in the business world and economy, some organizations are compelled to change the way they operate. In this continuously advancing world of today, managers have to act as the ‘change agents’ in the organization; it is their responsibility to exercise their role as leaders.

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Research Methodology

The culture and need for change was studied basically by keeping the structure under examination. Also, their vision was understood and analyzed to figure out their goals and what needs to be changed with the changing environment. The website and publications about this organization were of great help as secondary sources in order to judge how well the employees had been functioning under certain conditions and structures. Additionally, one on one interviews were conducted with the employees at different hierarchal levels. Primary sources were not really a hassle because being part of the organization; I could easily get access to them. Surveys were prepared but the questions were covered during interviews.

Organizational Background

Industry Background

The industrial sector that International Power belongs to is the energy sector. Not a lot of people, especially fresh graduates enter this industry; but to think of it, this is one of the most important sectors for a country. If this sector runs fine, then only the other sectors can survive. This industry is however, facing difficulties, because with increasing time, the resources are depleting. Therefore, many are trying to come up with sustainable ways to produce so that in the future, our supply does not turn into shortage.

Company Background

The Company: International Power, a private limited company, is one of the principal electricity generating company which has a network which is spread all over the world in 21 different countries, stretched over various continents. It’s headquarters is in London, and its branches are located in various cities and countries and within these cities there are further divisions and multiple locations for the power plants

The Product: International Power plc is an independent power generation corporation and the businesses it is involved includes:

  • production of fresh water through desalination of seawater;
  • production and dissemination of steam;
  • district heating via cogeneration;
  • coal mining using the method of open casting; and
  • transportation of gas and even the production of renewable energy

The Market: By doing business is different fields and geographical divisions; International Power plc plans to diversify risks. This portfolio management system helps the company to save themselves from specializing into one field because in case things do not work out in one field, the company can always diversify those risks and compensate for them by utilizing the profits gained in another field. Additionally, it provides the company with multiple opportunities to earn profits and try to work their luck in different playing fields; thus leading to value creation.

Vision

To ensure that the customers are receiving un-interrupted electricity services and that International Power Electricity Providers is adding value to their customers and employees’ lives along with contributing to national growth by reviving competition.

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Mission

International Power Electricity Providers has one major aim – to increase the efficiency and productivity of the organizations by reviving competition in the market. Additionally, it has a mission of providing a loyal customer service which is not only reliable but also affordable. Moreover, it also wishes to provide developmental opportunities and a platform for leadership and returns to its employees and stakeholders.

Importance of Culture and Values

Organizational culture is a collection of chief principles, philosophies, customs, functioning mannerisms, work morals, worker performance and fundamental business ethics on which the company depends. All the conduct and activities happening in the organizations are a manifestation of the culture at the office. Corporate culture then becomes a guideline for them and their behaviour. Values symbolize stable, long lasting beliefs about what is significant to us. They manipulate our choices and our understanding of what is ethical. Values have become more vital in organizations because of globalization, the need to restore command-and control systems and the rising strain for organizations to engage in good practices. Keeping in mind the fact that the mission and the vision of the organization hint towards constant environmental updates and keeping up with the pacing world, the culture should be of adaption to the external environment.

Internal Analysis and Findings

The internal analysis of the company is the internal strengths and weakness. The chart in the Appendix reveals that the company was running on obsolete machinery that was working beyond it useful life and thus wasn’t efficient. Furthermore the employees were least bothered about the working conditions and the only thing keeping them at work for a steady pay check rather than making an effort to earn the salary. The company in the past had requested for new machinery and funds from foreign investors but they have always declined due to stringent political forces in the market. However, rising demand of the products along with many local resources, show a favourable scenario for the company. And through its international affiliation and brand name, the company has the capacity to boost its image further and attract foreign investment.

Previous Company Structure

Organizational structure is the way the organization works and the way people are placed either in teams of departments; basically, the set up of the organization that ensures that the running of the operations is smooth.

Previous Company Structure

Earlier International Power used the functional structure. Functional structures are more departments oriented – different activities are divided into different functions, that is, we have a different function for accounting, marketing, finance and sales; and these functional departments excel at what they do individually but have no communication with one another, that is, department integration is missing.

New Company Structure

International Power shifted to a more complex is a cross-functional team based structure, which includes various kinds of teams which includes temporary teams, permanent teams, task forces etc. it is like a matrix structure where any member can form teams across the board as seen fit.

New Company Structure

When one works on a team, he is not restricted to just a few ideas and perspectives; in fact, on a team there are a number of individuals in different varieties. This leads to a number of different perspectives, ideas, skills and expertise3. This is the best suited option because it improves results and increases efficiency. Also, this is mostly accepted because when working in teams, the workload is also shared and different perspectives give you a better way to judge the situation.

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Effect on Culture at International Power

Earlier on, the functional structure at the company had a very rigid hierarchy, thus, the employees never got a chance to be at ease and be friendly enough to share their views openly and were never sure of the reactions and tolerance levels. Now with teams, the culture of friendliness has strengthened because everybody feels that they can share their perspectives openly without being judged. This is the structure that compliments that concept of having friendly relationships at the workplace.

Effect on Values at International Power

The other 7S’s of McKenzie such as shared values holds immense importance in an organization. The structure is something that helps to build upon the culture. Team structure is such that increases interaction between the members and encourages things to be produced by discussion and keeping all ideas in mind. Staff is another S – the staff is very comfortable working because in teams, everybody has equal rights unlike a strict rigid hierarchy; thus, again strengthening the culture of a friendly environment. Strategy is another S – however, this S is kind of dependant on the culture at times. International Power makes sure that the strategies they are devising are not in contradiction to the culture; this is when the culture acts like a guiding body.

Effect on Mission and Vision at International Power

With a change in the mission and vision of International Power, which focused on international competition based on efficiency, the structure had to be switched to the more modern team structure that is essentially a cross-functional structure. The reason for this was that the production and strategizing was more efficient, less time consuming and more effective this way. This will help to match the ‘externally’ fit in the environmental mission statement. This again directly and indirectly leads to a friendly environment. And keeping a friendly and an energetic environment is a part of starting a new part of the organization’s life where diverse workforce from across boundaries will help make the company a better proposition for the future.

Current Cultures

What is Organisational Culture?

“Organisational culture is a set of core principles, beliefs, customs, operational styles, work ethics, employee behaviour and fundamental business ethics on which the business is based”. All the conduct and actions taking place in the organizations are a manifestation of the organization’s corporate culture.

The Cultural Shift

The culture till a decade ago at the company was very functional and hierarchal. Today, employees work together with a flexible and friendly attitude; this was evident when we held a general discussion about this topic over lunch in a casual atmosphere where people shared their views. The culture is such that employees, who previously had ego problems, now are on friendly terms with all other employees. Earlier on, people focused more on their personal achievements. But with increasing global competition, they have all come to realize that there should only be healthy competition which should lead to the achievement of company goals so that the competition remains not between the members, but the company and its rivals.

Hybrid Culture – Individualistic and Grouped

The hierarchal structure had bred the employees as individualistic and self-dependant people, which is still visible in the upper echelons of the management structure. However at the lower level, the team-based and cross-functional structure is apparent. The organization takes pride of its hybrid mix culture where an outsider might consider such a culture as non-professional and non-standardized. The organization on the other hand feels that this sort of hybrid is necessary to get the work done. While at the upper levels work is more decision oriented and requires tough autocratic control therefore an individualistic culture, on the lower level a group based culture is required to keep the workers motivated.

Subcultures and Learning Culture

Having a subculture of a casual team-based approach to work, control tends to be difficult at times. And for this reason the team-leader is chosen is often the toughest employee of the lot that can command the team members and keep their attitudes within working terms. The important thing about this is that this way, the employees don’t feel under pressure from the team leader and the team leader can enjoy with the team till the time the work is being accomplished. Therefore learning and adapting to new things is easier and at times quicker. Although the organization cannot be regarded as a learning organization, the competition between the cross-functional teams make the teams go an extra mile and adopt learning style to become a better team.

External Environment Analysis (PESTLE)

Political
There are a few countries that International Power operates in that are politically unstable like Pakistan; however, other places like Illinois, western Australia are all politically stable, thus, just one country does not make a huge impact to them. Plus, even in Pakistan, the political conditions do not really affect them because they keep away from any political involvement.
Economical
With the current economical downturn throughout the world, International Power is also facing problems – especially, when it comes to manpower. They cannot afford to hire new employees. They are also resorting to trainee programs now.
Sociological
With increasing globalization, International Power has actually gained a lot. This is because it operates in more than one country with different cultural backgrounds. But with rising travelling across continents and merging cultures, International Power does not face major cultural and settling shocks in new places.
Technological
The field that International power works in needs constant machinery upgrading because they need to be on top of the line and producing with the most efficient and optimal methods and machinery available. New machinery is coming up almost every day for this field but the economic crunch makes it tough on the company to spend so many finances on this.
Legal
The laws and regulations in all countries that International Power is operating in are different and the policies need to be changed everywhere. For example, the legal situation in Australia is different from that in the UK and Pakistan or maybe even Oman. Thus, the company has to amend a few practices depending on the legal situation in every country.
Environmental
International Power is environmentally very active in the sense that they make sure that their operations are not held in the main city because of chemical emissions. Their power plants are usually outside of the city. Normally also because the countries they operate in are a little environmentally conscious and have laws that restrict pollution.

SWOT Analysis

Strengths:
  • High demand for products.
  • Undiscovered and untapped ores etc.
  • International affiliation with the International Power group worldwide.
Opportunity:
  • Increasing population, urbanization; therefore, rising demand.
  • The funds that are already present can be used appropriately to make it an opportunity.
  • Increasing technology.
  • Due to expanding market and demand, people are willing to invest in this industry
Weaknesses:
  • Expensive instalment of power plants
  • Technology is too complex to be implemented because of lack of training and funds
  • Obsolete machinery
  • Non-committed employees
  • Stringent political forces
Threats:
  • No foreign funding because of political discrepancies
  • Economic recession worldwide
  • Spare parts of power plants have to be imported.

Identification of Change Options

To deal with the issues at hand, managers recommended seeking the help of professionals who can conduct a holistic research about the company and how the problems can be solved. This option although good, seems unfeasible to start due to the chances of company secret being exposed to outsiders and also because the cost involved are too high to expend at this time of economical crisis.

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To meet the need for hi-tech machinery and expertise, foreign help can be attained at low cost from China. However this would mean inducting Chinese staff on a temporary basis to train the local staff which in turn can be difficult due to cultural differences. Also the local staff would not want an outsider to take control of the operations especially at a time when job-security is of utmost importance.

The organizational structure is one point where the whole administration agrees to keep it cross-functionally team based. The organization is already reaping the rewards due to this new structure and would like to keep it this way where the employees are getting settled into.

Most of options identified require a lot of investment and money is a problem for the organization. To solve the company’s problems on a larger scale, the Build Operate and Transfer (BOT) plan of Chinese machinery looks seems most feasible financially, and is suitable for the company at this point in time. Although this plan may be acceptable for the local staff, the company has change strategies to make this option work for them.

Devising Change Plan

What makes an organization successful is its ability to keep evolving according to the needs of the organization. Once the organization knows at what level the change is taking place, and what kind, it can develop strategies in the view of that. Why do you need to strategize? This is because most employees are resistant to change just like in this case they are due to fear of job security. Employing effective strategies decreases their resistance to change.

Unfreeze- Change-Freeze

Usually one of the earliest methods that have been developed was developed by Kurt Lewis and it is a three stage ‘Unfreeze-Change-Refreeze’ process. The first step involves overcoming the practices and changing the inertia so that the new ideas and methods can be adopted. Then the change is brought about in the organization and is reinforced by using various methods. The third step involves reinforcing those practices so that the new ones become the practices of the organization.

ADKAR

Another model that is used is called the ADKAR model, which stands for Awareness, Desire, Knowledge, Ability and Reinforcement6. These steps are followed in line and the idea is reinforced in the end; but the awareness about the change and creating desire for that change is really important for the organization management. This can be done by linking the change practices directly with intrinsic or extrinsic rewards; whichever is more appealing to the respective employees.

For the process of change required at the organization, the classic Kurt Lewis 3 phase model of change will be applied.

Change Model Change plan
Unfreeze – Overcoming Old Practices It is best to keep the organizational structure cross-function and entirely team based. Where this aspect will remain the same, the organization will need to let go of old habits of taking it easy and start working as hard as they can. Motivation will be the key here to keep the employees on their toes all the time to achieve the required objectives.
Change – Implement the New Practices Team structure gives people a chance of working with various kinds of people which will be especially useful when the Chinese delegation starts working. The local employees would have to be educated about Chinese customs beforehand so that the foreigners could be welcomed and settled quickly.
Re-Freeze – Instil the new Practices A small change in the mission would also be required; the organization aims at bringing in competition in the marketing by its efficiency in production. Change at International Power is necessary because we need to keep in pace with the international standards and where the world is heading to. Therefore, the mission should state that the company wishes to compete in the global market on an international platform. This would bind the employees to the new change model.

Change Implementation Plan

The change implementation plan can be divided into several steps. They are broken down as:

Research the External Market – 5 Months

  1. Figure out what the international standards are; so that International Power can also move in this direction.
  2. Amend production methods
  3. Market in such a way to make the products stand out and beat the competing goods.
  4. Involve employees and explain the need for change
  5. Take feedback and integrate in the pan

Plan Concrete Steps – 5 Months

  1. Educate and clarify all misconceptions of employees and communicate to them the correct message. Once they understand the true essence of change, they are more likely to agree to allow change.
  2. Hold sessions discussing the entire plan with the employees. They should also welcome opinions and criticism and think over it
  3. Resisting employees can be dealt with rewards, force or termination

Implementation – 2 Months

  1. Opt for a session, a motivating speech and passion to take the company to the top.
  2. Willingness to remove hesitation of people and trying to make them understand the good and getting them on board, is needed.

The department responsible would be mainly administration and Human Resources. However, every department should ideally participate and help their departments in understanding the need for change. Also, every department head needs to be involved to see what changes are required in their department and whether all changes are cross functional and in alignment with each other. This will also help in avoiding the risk of implementing too many things at the same time because not a lot of change can be handled. A budget of $25,000 has been allocated for this task, bulk of which will be utilized on market research while about $10,000 will be spent on seminars, conferences and training.

Proposal of Recommendations

Dear Sir/Madam,

Change is vital and a major inclination towards success. However, if rightly implemented, then only can it result in something productive, or else, it can backfire and the settled system that was working earlier will also be ruined. Thus, it is important to keep certain important and critical things in mind. Personally, I have a few recommendations that I’d like to share:

  • Employees should be involved at all stages of change so that they feel a part of it and it does not come as a shock to them.
  • International standards should be met but local realities should also be kept in mind because not everything suits your organizations.
  • Feedback of changes should be timely, corrective, accurate, specific and relevant.
  • Mission and vision should be in line with the organizational culture.
  • Best case practices from other International Power countries should be used so that the credibility can be increased.
  • Reports of improvement and how the employees have benefited through change should be produced
  • Thorough external market research and environmental research should be conducted because without that the company can never know exactly what needs to be changed in the company
  • Estimation of growth and benefits should be calculated to show how much they can benefit – statistics are something tangible and in number so it maybe be convincing.

I hope that these recommendations may of some use to you and the organization as a whole. Thank you.

Conclusion

International Power is one of those organizations that keep up with the advancing world. They amend their vision and mission if needed; bring changes to their culture so that they can achieve a fit with the environment. As we can see, they changed not only their structure, but understood how important the values and cultures of an organization is and amended those too. Also, not always is change accepted by the organization but there are several methodologies to deal with this situation; first is to realize why there is a resistance, and then to adequately develop strategies to deal with it.

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Appendix

Internal Analysis

Strengths
  • High demand for products
  • Available but undiscovered and untapped ores etc.
  • International affiliation with the International Power group worldwide
Weaknesses
  • Expensive instalment of power plants
  • Technology is too complex to be implemented because of lack of training and funds
  • Obsolete machinery
  • Non-committed employees
  • Stringent political forces

Business Model

Business Model

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